Buyers of the “greenest” new electric cars priced at less than £37,000 will be able to get a discount of up to 10% under a UK government scheme, a move that means Tesla fans will still face having to pay the full price.
The Department for Transport has reintroduced a grant, previously scrapped in June 2022, to encourage more drivers to switch from petrol and diesel to electric vehicles.
The £650m electric car grant will offer a discount of up to £3,750 for vehicles based on sustainability criteria, with a second band offering a discount of up to £1,500.
Teslas will not be eligible for the discount, as prices of new cars built by Elon Musk’s company start from about £40,000, and neither will Chinese-made cars from makers such as BYD.
Vehicles made in China do not make the eligibility criteria for being the greenest EVs because they do not pass the government’s rules on environmentally sustainable manufacturing practices.
These rules are based on carbon emissions of the electricity grid in production stages including vehicle assembly and battery production, and China still has a significant dependency on coal for power generation.
While the full list of eligible models and makers is not yet known, Nissan and Renault – makers of the popular Leaf and E5 models – do pass the rules and could benefit from the new discount programme.
John Lewis, the chief executive of the infrastructure company char.gy, said the reintroduction of the grant brings the UK closer to a point where “driving electric is accessible to everyone, not just the privileged few”.
The DfT said 33 new electric car models are available for less than £30,000. The government has pledged to ban the sale of new fully petrol or diesel cars and vans from 2030.
“We are making it easier and cheaper to own an electric car,” said Heidi Alexander, the transport secretary. “This grant will not only allow people to keep more of their hard-earned money – it’ll help our automotive sector seize one of the biggest opportunities in the 21st century.”
The Conservative government under Rishi Sunak brought in the zero-emission vehicle mandate to force carmakers to sell an increasing proportion of electric cars or face steep fines of up to £15,000 for every vehicle above their fossil-fuel quota.
However, in April the business secretary, Jonathan Reynolds, confirmed the Labour government would relax the rules after an intensive lobbying campaign by the UK car industry against the policy. Carmakers argued they were being forced to make unsustainable discounts in order to attract buyers, although environmental campaigners had called for the government to hold firm.
“This new scheme could be just the shot in the arm needed to help more drivers go electric,” said Simon Williams, the head of policy at the RAC motoring organisation. “Within weeks discounted cars should start appearing at dealerships across the country. And, as the biggest savings will be given to cars with the strongest ‘green’ manufacturing credentials, drivers will be picking models that are not only better for their wallets but better for the planet too.”
However, this month figures showed that carmakers are on track to meet existing UK electric car sales targets despite the successful lobbying push.
Some buyers have been wary of going electric for a number of reasons, with higher upfront vehicle costs a key concern. “Range anxiety” caused by an inconsistent and sometimes expensive array of public charge points has also been a factor, although it is diminishing because of the rapid pace of public charger installations.
The government said there are now 82,000 public charge points available across the UK.
• This article’s subheading and text were amended on 15 July 2025. An earlier version said that Chinese brands might benefit from this scheme; however, Chinese cars will not be eligible as they do not pass the government’s sustainability rules. Also, owing to an error in text provided by an agency, 33 new EV models will be available for less than £30,000, not 23.
