A Guide to the Current UK Government Grants for Electric Cars

Rowan Harris 7 minutes Published: 24/03/2022

“I’m going to hold off getting an electric car for a while - they’re way pricier than petrol!”

Does this sound familiar? It is often true that electric variations of car models are more expensive than their ICE counterparts, but not for long.

Earlier this year, BloombergNEF predicted that electric cars would be at price parity with internal combustion engines by 2027

UBS are more optimistic - they believe that point will come in 2024. Regardless of the timeline, both agree that EVs will eventually be cheaper to produce (and get your hands on) than ICEs. 

While it's still a few years until EVs can compete with petrol or diesel cars on RRP, there are a number of Government grants available that can help bridge the gap. We explain more in this article.

Plug in Car Grant (PiCG)

The UK Government currently offers grants towards the purchase/lease of low emissions vehicles from the following eight categories:

  • cars
  • wheelchair accessible vehicles
  • motorcycles
  • mopeds
  • small vans
  • large vans
  • taxis
  • trucks

Not all low emissions vehicles are eligible for a grant, and the amount that can be claimed will vary depending on the category of vehicle you are looking to purchase/lease.

It’s worth noting that if you decide to lease, the savings will be spread over the duration of your lease. This means you can’t just use the grant as a lump sum to pay off a larger initial rental. 

How much is the Plug in Car Grant?

The maximum amount you can claim using the Plug in Car Grant is 35% of the purchase price, up to a maximum of £1,500.

This was reduced in December 2021 (it was previously £2,500). It was reduced as it was claimed that this would allow the Government budget to spread to more people, making more affordable EVs more accessible to those on lower incomes.

Which cars are eligible for the Plug in Car Grant?

To be eligible for the Plug in Car Grant, your car must cost less than £32,000 (RRP), including all VAT and delivery fees. 

Currently, the list of eligible vehicles include those with zero CO2 emissions that can travel at least 112km (70 miles) without any emissions at all*:

*The full list of cars, wheelchair accessible vehicles, motorcycles, mopeds, small vans, large vans, taxis, small trucks, and large trucks, can be found on the Government website.

Charging Point Installation Grant

Charging an electric car works out significantly cheaper than refuelling at the petrol station -  but if you want to really maximise those savings, you’ll also want to consider getting a chargepoint installed.

The thought of laying down another few hundred pounds on top of your initial rental or finance deal deposit might make you wince - but you’ll be glad to know that there are several generous Government grants available for the installation of electric car charging points.

Electric Vehicle Homecharge Scheme (EVHS)

The Office for Zero Emission Vehicles (OZEV) provides a Government grant towards up to 75% of the total cost of an EV chargepoint installation. The amount you can claim is capped at £350 (including VAT) under the Electric Vehicle Homecharge Scheme (EVHS)

IMPORTANT NOTE: As of April 2022, this scheme will only be available to homeowners of flats and people who live in rental accommodation (flats and single-use properties). All other homeowners must have their applicatins in by 31st March 2022.

To be eligible for the grant, you must ensure that you:

  1. Select an authorised EVHS installer. You can find the full list of these on the government website.
  2. Purchase a qualifying ‘smart’ EV charge point that meets the minimum technical specifications. You can find out more about the EV charger types here. 
  3. Own, lease, or have on order a qualifying plug-in hybrid or electric vehicle. This includes any new or second hand eligible vehicles and eligible company cars assigned for at least 6 months.
  4. Own, or have sole legal right to the parking space. Rented spaces, or those which are shared with other properties or provide access to other properties are excluded.

If you have previously used the scheme, or its predecessor, the Domestic Recharge Scheme (DRS), you may not use the scheme again unless you own a second qualifying electric vehicle at the same time. This is also the case if you are moving house (whether replacing or bringing your chargepoint with you) or upgrading your chargepoint.

Energy Saving Trust Home Chargepoint Funding

In addition to the £350 provided by OZEV under the Electric Vehicle Homecharge Scheme, Scottish residents can claim a further £250 towards the cost of an EV charge point installation. This rises to £350 for those in the most remote parts of Scotland. 

Unlike the EVHS, this grant is claimed retrospectively from the Energy Saving Trust. All you need to do is fill in a short form, providing a quote from your chosen supplier and proof of purchase or lease of an electric vehicle. The Energy Saving Trust cannot provide a grant if the installation has already been completed.

Workplace Charging Scheme

The Workplace Charging Scheme (WCS) provides a generous discount on the purchase and installation of electric car charging points for business. If your organisation is eligible, it will be entitled to claim 75% of the costs, up to a maximum of £350, for each charging point installed by an OZEV-approved chargepoint installer

Eligible organisations include registered businesses, charities or public sector organisations in England, Wales, Scotland and Northern Ireland. In addition, they must either:

  • Have dedicated off-street parking for employees or fleet vehicles. 
  • Own the property or have consent from the landlord for electric vehicle charging equipment to be installed at all the sites listed in the application. 

If eligible, organisations are able to claim for up to 40 chargepoint sockets. That’s a whopping £14,000 saving on installation costs! 

On-Street Residential Chargepoint Scheme

The On-Street Residential Chargepoint Scheme is designed to increase the availability of on-street chargepoints in residential areas, particularly where off-street parking is not available. This will ensure that there is no barrier to anybody who wishes to drive and save with an EV. 

Although the application process is open to local authorities in the UK, many local authorities allow residents to apply to have an EV chargepoint installed on their street. If you live in London, you can find a complete list of relevant contact details and application forms on the LondonCouncils website. 

Employee Incentives

Whether you drive a company car, or your workplace has its own charging points installed, there are some great incentives if you’re considering making the switch. 

Lower BIK Tax Rates

Company car tax rates are designed to encourage company car drivers to choose cars with lower emissions. Both the company and the employee are offered incentives for choosing vehicles with lower CO2 and NOx emissions. 

Employees will be eligible for lower BiK tax bands if they opt to drive an electric car. BiK tax rates are calculated based on the list price, or P11D value, of the car (including VAT and delivery charges), the car’s CO2 emissions, and the employee’s income tax band. 

In 2022-23, the BiK tax band for electric (0 emissions) vehicles is 2%. This is multiplied by the P11D value and the employee tax rate. 

For example, a Volkswagen ID.3 starts at around £30,000 RRP. If we multiply this by 2% (BiK tax rate) and 20% (lowest band of employee tax rate), we have an annual BiK tax rate of £120. 

BiK Exemption On Charging At Work

Charging at work can be a convenient way to top up if you don’t have the luxury of a driveway for electric car charging at home. And that’s not all. If your employer decides to offer free workplace charging for employees, you won’t have to pay any Benefit-in-Kind taxes for any electricity used!

Ready To See What You Could Save? 

Whether you’re a business looking to electrify your fleet, an employee hoping to reduce your BiK rates, or just looking to cut down on your carbon footprint, there are lots of ways to save with Government grants. 

If you’re new to EVs, why not check out some other ways you can save with our posts on EV tariffs or electric car charging cable theft? Alternatively, check out our electric car lease deals to find the best EVs on offer right now.