By Niamh Roberts
The Department for Transport have announced a £650 million investment into the promotion of electric car sales in the UK. The discounts are directly from the car dealerships with manufacturers applying for the grants rather than the customers.
The grant is for electric vehicles priced at or under £37,000 though the amount of discount is determined by the sustainability of the car’s production. Models with the most sustainable productions can be discounted by £3,750, the maximum grant allocated. Whereas cars that meet only some of the sustainability criteria have a discount of £1,500. The criteria factors in the emissions released in battery and vehicle production as well as the grid carbon intensity in manufacturing countries.
The aim of the grant scheme is to make the UK’s roads greener and make EVs more affordable for the everyday people, a move that confronts the arguments about upfront costs of EVs.
This announcement is the latest development in the government’s greater investment in transport. It not only aligns with their election manifesto and ‘Plan for Change’ which centres around promoting economic growth and supporting the working people. It is also is in line with the ZEV mandate which requires car manufacturers to promote the sales of EVs by meeting increasing yearly targets until 2035. A record £1.6 billion is being invested in transport to support all things from tackling potholes to freezing the fuel duty. The government is also planning to make running an EV more accessible with a £63 million package covering charging points at businesses and households without driveways.
EV grants, however, are not a new thing; they have been implemented in the UK before under the Conservative government in 2011. Initially, the Conservatives introduced the Plug-in Car scheme offering a £5,000 discount on EVs. This was later reduced to £1,500 in 2021 and then scrapped altogether in June 2022. Their reason behind the cancellation was instead to invest in electric vehicle charging, a decision that was widely criticised by motoring industry groups.
EV grants and programmes have also been implemented worldwide. In Canada, the iZEV (Incentives to Zero Emission Vehicles) programme offered discounts on new ZEVs priced at C$55,000 or less (£29,693.40) and for upgraded models priced at C$65,000 or less (£35,092.20). Eligible vehicles were listed on the Transport Canada website. Unlike the UK’s scheme, the grant offered was determined not on the sustainability of production but on the amount of time the EV would be in use. The maximum grant was C$5,000 (£2,700) for those purchasing or leasing for 48 months. This discount decreased as per the length of the lease on the EV. Some provinces also offered installing residential chargers and covering shipping costs.
Canada’s programme’s duration was dependent on funding. This meant that an influx of purchases resulted in the exhaustion of funds and the premature closure of the scheme. Due to close at the end of March 2025, the programme instead was paused on 12th January 2025. Some manufacturers like Ford and Hyundai covered the rebate amounts to mitigate the financial impact on customers.
Policy Driven – Driving Change in the Automotive Sector
In the second episode of “Policy Driven,” co-hosts Mark and Tom are joined by Julia Poliscanova, Senior Director for Vehicles & Emobility Supply Chains at the Green NGO Transport & Environment in Brussels. The conversation explores Julia’s journey in transport and mobility, her academic and professional experiences in the UK, and the role Western markets like the UK and Canada play in influencing global transport decarbonisation policy.
The episode delves into the EU’s Strategic Dialogue on the Automotive Sector and the subsequent Action Plan, highlighting how current EU legislation has fallen short in incentivising gradual decarbonisation. Julia explores the pressures facing the automotive sector and emphasises the need for a comprehensive and robust approach to decarbonisation by securing and supporting the EV supply chain.
There have been mixed responses to the UK Government’s announcement. Steve Walker of Auto Express states that ‘around 70 per cent of new EVs still cost more than £40,000 so they won’t benefit from this grant at all’. Additionally, some believe that the majority of cars purchased under the scheme would have been sold even without the discount.
Regardless, the track record of such programmes elsewhere as well as previous success in the UK suggests that the EV grant will have a positive impact. During the 10 years of the Conservative government’s scheme being active, nearly 500,000 cars were purchased using the discount. Furthermore, the programme is expected to add 47,000 electric cars to the UK’s roads each year as stated by the SMF. According to academic research, ‘purchase incentive policies positively influence’ the sales of EVs.
