The UK government offers various incentives for electric vehicle adoption and this article will examine what is currently on offer as of February 2025:
Current UK incentives for electric vehicles
Plug-in vehicle grants
Dealerships and manufacturers collaborate to help buyers take advantage of the grants still available for low emission vehicles. The buyer need not apply. Instead, the dealership discounts the purchase price, and the grant amount is refunded by the government.
The Plug-in Car Grant was discontinued in 2022 but some grants still apply to the following vehicles:
- Wheelchair accessible vehicles: £2,500 available (price cap for eligible vehicles is £50,000) with 200 grants available per full year. Available until 31 March 2026.
- Motorcycles: The plug-in motorcycle grant continue until at least April 2025 for L3 motorcycles only.
- Vans: Plug in Van Grant (PiVG) available until 31 March 2026, this offers £2,500 for vans up to 2.5 tonnes and £5,000 for vans from 2.5 tonnes to 4.25 tonnes.
- Trucks: The maximum discount available for some small trucks (4.25 to 12 tonnes) is £16,000
- Taxis: Plug in Taxi Grant is available until 31 March 2026 (or when funds are exhausted) and will offer £4,000.
These grants are particularly helpful in providing business incentives for the transition to electric vehicles.
Charge point grants
The workplace charging scheme subsidises the cost of electric vehicle charge points at workplaces. Each applicant is eligible for a 75 percent subsidy with a cap of £350 per chargepoint. A business entity may receive this incentive for the installation of a maximum of 40 sockets.
Renters and flat owners are eligible for a similar grant provided they own an eligible vehicle and have private, off-street parking.
Congestion Charge and Ultra-Low Emission Zone (ULEZ) benefits
Currently, owners of electric vehicles can apply for exemption from congestion and ULEZ charges. However, London will be discontinuing congestion charge benefits for electric vehicles from December 2025 and other cities may follow suit. ULEZ will be unaffected.
Together with grants for electric trucks and vans, ULEZ benefits are the primary company incentives for electric vehicle adoption. If introducing congestion zone charges for electric vehicles in London goes ahead and other cities follow suit, there will be an additional cost burden for companies using zero emissions vehicles in major central business districts.
The LEVI Fund
Local Electric Vehicle Infrastructure (LEVI) funding is available to local authorities that wish to install on-street charging infrastructure in areas where residents do not have access to off-street parking. To receive funding, they must first undertake an application process.
Company car tax
When employees have a company car that they can use in their private capacity as well as for work purposes, the benefit is subject to taxation. The taxation is based on the value of the car. However, if it is an electric vehicle, the taxable value is reduced.
Auto Industry Calls For More Zero Emission Vehicle (ZEV) Incentives
The UK government hopes to speed the transition to emission free vehicles by setting sales targets for auto manufacturers. However, manufacturers are struggling to meet these targets despite their massive investment delivering a huge choice of electric vehicles to market – and then subsidising their sale through discounting.
The reason for this is straightforward. The automotive industry cannot force consumers to buy zero emission vehicles, which because of their higher production costs, are naturally more expensive than petrol or diesel vehicles.
Without significant government incentives for electric vehicles, many buyers will still choose vehicles with internal combustion engines. The message is clear: to achieve its aims, government must collaborate with the automotive industry – and provide consumers with the financial encouragement to switch.
Reduced VAT on ZEV purchases and public charging likely to stimulate market
Market modelling indicates that reducing VAT on new ZEV purchases over a period of three years would increase the number of emissions free vehicle registrations to more than 2 million by 2028. In addition, the high rate of 20% VAT on public charging should be reduced to align with the 5% VAT levied on home charging. The present state of the auto market can be assessed using our Electric Vehicles Data Page.
Joining the SMMT: benefits for industry players
Interested parties who are active in the UK automotive industry are invited to join the SMMT, adding to our influence as industry representatives. Associate and Affiliate memberships are also available. In addition to representation, members benefit from industry-critical members-only data as well as opportunities to interact, learn, network, and collaborate at our motor industry events.
