Buyers of new electric cars priced at less than £37,000 will be able to get a discount of up to 10% under a new UK government scheme, a move that may benefit some cheaper Chinese models but leave Tesla fans still having to pay the full price.
The Department for Transport has reintroduced a grant, which had been 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 the “greenest” vehicles based on sustainability criteria, with a second band offering a discount of up to £1,500.
The move may benefit cheaper electric vehicle makers such as BYD, which has overtaken Tesla in sales in the UK. Prices of new cars built by Elon Musk’s company start from about £40,000.
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 23 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. Chinese EV brands have seized a growing slice of the European market, undercutting western marques to achieve more than 10% of European battery EV sales in some months of 2024.
“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.”
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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.