Last month, the Department for Transport (DfT) confirmed the extension of the Plug-in Van Grant for another year until April 2026, which will help more fleets and businesses switch to zero emission vans (ZEVs).
The £120 million fund will offer receive grants of up to £2,500 for buying small ZEVs up to 2.5 tonnes, and up to £5,000 for larger ZEVs up to 4.25 tonnes.
This extension forms part of a broader £2.3 billion package to decarbonise road transport, around half of which will support zero emission bus rollout which is already advanced in its transition.
Given the UK has a world-leading timeline to end the sale of new ZEVs by 2035, with the very greenest models required to make up 16% of all new van registrations this year, incentives are crucial to sustain such an ambition – one that is significantly ahead of natural market demand.
Mike Hawes, SMMT Chief Executive, said: “Zero emission uptake is positive but still struggles to match the ambition of regulation. The ongoing Plug-in Van Grant provides a lifeline, although we still need support to bolster operator confidence, boost demand and deliver decarbonisation.”
The Plug-in Van Grant is having a positive impact by supporting the purchase of more than 80,000 ZEVs since its launch in 2012. The funding helps bridge the price gap between diesel vans and ZEVs, which remain stubbornly more expensive to make and therefore buy, with the significant benefit of cutting carbon emissions.
Future of Roads Minister, Lilian Greenwood, said: “We are making it easier, faster and cheaper for people to switch to electric vehicles. By making the transition to zero emissions a success, we’re helping to drive growth all over the UK, putting more money in people’s pockets and rebuilding Britain to deliver our Plan for Change.”
Eurig Druce, Managing Director, Stellantis UK said: “The extension of the Plug-in Van Grant to 2026, and the removal of the unnecessary red tape around additional driving licence requirements for electric vans, is welcome news for UK businesses looking to take advantage of the environmental and cost benefits of electric vans.”
The Plug-in Van Grant offers different levels of financial support based on the size and specifications of the electric van:
Small Vans: Eligible for a grant covering 35% of the purchase price, up to a maximum of £2,500. To qualify, these vehicles must:
- Have a gross vehicle weight (GVW) of less than 2,500 kilograms.
- Emit CO₂ emissions below 50g/km.
- Be capable of traveling at least 60 miles without any emissions
Large Vans: Eligible for a grant covering 35% of the purchase price, up to a maximum of £5,000. Eligibility criteria include:
- A GVW between 2,500 kg and 4,250 kg.
- CO₂ emissions below 50g/km.
- A minimum zero-emission range of 60 miles.
Heavier Vehicles: Certain electric trucks and vans with a GVW exceeding 4,250 kg may qualify for a grant of up to £16,000, capped at 20% of the purchase price.
- To benefit from the grant, vehicles must meet specific standards. With regards to emission standards, vehicles must produce CO₂ emissions below 50g/km and have a zero-emission range of at least 60 miles.
- On the issue of weight specifications, depending on the vehicle category, weight limits range from under 2,500 kg for small vans to over 4,250 kg for heavier models.
Only vehicles approved by the government are eligible and aftermarket conversions do not qualify. Also, the vehicle must be manufactured or converted to electric power before its first registration.
The grant is typically applied directly at the point of purchase, reducing the vehicle’s upfront cost, and dealerships and manufacturers handle the application process on behalf of the buyer.
In addition, buyers must check that their chosen vehicle is listed among the eligible models to qualify for the grant.
Christopher Thorneycroft-Smith, Co-founder of Aegis Energy, a provider of energy transition infrastructure for vans and commercial vehicles, said: “We are delighted that Government has decided to extend the plug-in grant for electric vans and remove additional training requirements, making the switch to zero emission vehicles more accessible for fleet operators.
“It’s a definitive move for the sector which many industry bodies have lobbied hard for over the last year.
“However, we also know how important it is that we address the gap in reliable, accessible charging infrastructure for fleet operators.
“Alongside reducing upfront vehicle costs, this is another key barrier which must be tackled to truly accelerate the transition.”
Also, the Plug-in Wheelchair Accessible Vehicle Grant cap is being increased from £35,000 to £50,000, opening up the choice of models and removing barriers for disabled passengers to travel with greater peace of mind.
Fleet management and leasing specialist Ayvens provides a Total Cost of Operation + Insights tool that can help fleets identify the most suitable vehicles for electrification, taking into account drivers and journey patterns so they can make informed, strategic decisions for their operations.
Matthew Dillon, Head of Commercial Vehicles at the company said: “The government’s confirmation of a one-year extension to the Plug-in Van Grant is a positive step, reinforcing the crucial role financial incentives play in helping commercial vehicle fleets transition to zero-emission alternatives.
“The grant extension sends a strong signal to fleet operators running the UK’s most mission-critical fleets that the Government is committed to supporting their decarbonisation efforts.
“As fleet decarbonisation is happening in gradual stages, businesses must adopt EVs where feasible while also exploring ways to improve journey efficiency and minimise downtime.”
Meanwhile, the DfT is also making it easier for businesses to switch to zero emission vans – which can be heavier than their petrol and diesel counterparts despite being of the same size – by removing the requirement for additional training that is currently in place only for zero emission vans but not their petrol and diesel equivalents.
The move is designed to help businesses by taking away training costs, cutting red tape and making it easier to hire drivers when operating electric vans.
Dillon added: “Another welcome announcement is the removal of the additional driver training hours required to operate heavier alternative-fuelled vehicles.
“This is a step in the right direction, addressing some of the uncertainty in the industry and giving fleet operators greater confidence to explore the operational capabilities of electric commercial vehicles up to 4.25 tonnes.”
The extension of the Plug-in Van Grant to April 2026 means operators can still benefit from an incentive to go electric with their van fleets.
By understanding the eligibility criteria and benefits, businesses and individuals weighing up the transition to electric vans can continue to take advantage of this opportunity.
