Electric car grant branded 'short-sighted' as drivers face high costs after major vehicle tax hike

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WATCH: Roads Minister Lilian Greenwood speaks to GB News about the new Electric Car Grant

Felix Reeves

By Felix Reeves


Published: 15/07/2025

- 09:57

Drivers are set to see the benefits of the Electric Car Grant in the coming weeks

A number of motoring experts have criticised Labour's new flagship policy of offering almost £4,000 to drivers who are looking to buy an electric vehicle.

The new Electric Car Grant has now launched, with drivers buying a zero emission vehicle able to save up to £3,750 if the car costs less than £37,000.


The £650million scheme will see manufacturers apply to be considered eligible for funding on a first-come, first-served basis.

All administrative details will be handled by vehicle manufacturers, dealerships and the Government, with motorists set to benefit in the coming weeks.

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Electric car charger and a vehicle tax reminder

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An expert has warned that the Electric Car Grant may only be 'good for headlines'

It comes as the Government looks to boost the number of electric vehicles on the road to meet targets outlined in the Zero Emission Vehicle (ZEV) mandate.

The mandate states that manufacturers must have at least 28 per cent of sales come from electric vehicles by the end of the year, before rising to 100 per cent in 2035.

From 2030, the sale of new petrol and diesel cars will be outlawed, with only electric, hydrogen fuel cell and hybrid vehicles being allowed on sale until 2035. After that deadline, only zero emission vehicles will be on sale.

It is hoped that the new Electric Car Grant will help thousands of motorists access cleaner vehicles in the coming months and years.

READ MORE: Electric car owners to save £1,500 every year with new support for 'innovative' home charging scheme

However, Stuart Masson, editorial director of The Car Expert, said the Electric Car Grant "looks good in a headline", but seems as if it will prioritise the needs of manufacturers, rather than drivers.

Grants will be made available in two separate bands, depending on how environmentally friendly they are. Band one vehicles will receive up to £3,750, while band two vehicles will receive up to £1,500.

Masson said the scheme was "short-sighted" as an overwhelming majority of households buy used cars, rather than buying them new.

He added: " There's nothing here for used EV buyers - no support for those looking to switch from older, higher-polluting petrol and diesel cars to more affordable second-hand electric vehicles.

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"If cutting emissions is the goal, wouldn’t helping these drivers make the most difference?"

He also questioned whether the grant funding would actually be passed on to drivers, noting that previous grant schemes, alongside solar panel incentives and stamp duty cuts, saw manufacturers hike prices.

Electric car owners have also been forced to pay tax for the first time this year, after former Conservative Chancellor Jeremy Hunt announced that EVs would need to pay Vehicle Excise Duty from April 2025.

In addition to this, electric vehicles are now required to pay the Expensive Car Supplement if they cost more than £40,000, which charges motorists £425 for five years of ownership after the first year of registration.

Tesla electric vehiclesGETTY |

Drivers can access a £3,750 discount on electric vehicles under £37,000

Masson described the Government's approach as "inconsistent" alongside the launch of the Electric Car Grant, noting that it risked undermining public confidence in EVs.

The expert continued, saying: "Perhaps most frustrating of all, today's funding could have tackled the UK’s biggest EV challenge: infrastructure. Poor public charging access remains the single biggest barrier for many would-be EV owners.

"Investing £650million into charging stations across the UK would have benefited every EV driver - new and used - and accelerated adoption in every region."

Grants are expected to be offered to customers from August 11, 2025, when the digital system for manufacturers to log eligible vehicle sales opens. The grant funding will be available until 2028-2029.