Drivers offered up to £3,750 discount to buy electric cars

The cost of some new electric cars will soon be reduced by up to £3,750 under grants being introduced by the government to encourage drivers to move away from petrol and diesel vehicles.

The discounts will apply to eligible vehicles costing up to £37,000, with the most environmentally friendly vehicles seeing the biggest reductions, the Department for Transport (DfT) said.

Carmakers can apply for funding from Wednesday, with the RAC saying discounted cars should start appearing at dealerships "within weeks".

But some drivers have previously told the BBC that ultimately, the UK needs more charging points to spur people to buy electric vehicles (EVs).

The government has pledged to ban the sale of new fully petrol or diesel cars from 2030.

Under the scheme, discounts will range between £1,500 and £3,750. Manufacturers apply for individual models to be considered eligible for funding, which is allocated on a first-come, first-served basis.

Once models are approved, the company will then take the money off the price of the car, so customers will just see a reduced price in dealerships and will not have to do anything themselves to get the discount.

It is understood the government will publish a list of eligible vehicles in the coming days.

The grants to lower the cost of EVs will be funded through a £650m scheme, and will be available for three years.

There are around 1.3 million electric cars on Britains roads but currently only around 82,000 public charging points.

At the weekend, Transport Secretary Heidi Alexander said the government would invest £63m to fund EV charging points.

The up-front cost of EVs is higher on average than for petrol cars.

According to Autotrader, the average price of a new battery electric car was £49,790 in June 2025, based on manufacturers recommended prices for 148 models.

The equivalent for a petrol car was £34,225, although it is important to remember that the averages cover a broad range of prices.

EVs can be also cheaper to run and a number of lower-priced models have recently come onto the market.

Charging an EV on the public charging network cost an average of 15p per mile for a slow or fast charger in June, and 23p per mile for a rapid or ultra-rapid charger, according to figures collected by charger locator business Zapmap.

Charging an EV at home is generally cheaper. According to research by car finance company Carmoola, the average cost per mile using a slow or fast charger at home is between 6p and 9p per mile for a 60kWh battery car, depending on the efficiency of the car.

Steve Catlin, managing director of Vauxhall, told the BBCs Today programme his company welcomed the governments action but increasing consumer demand and creating more charging points were two areas that needed action.

In terms of the amount of electric vehicles sold, he said: "The target this year is 28%. At the moment were running at 21.6% as an industry."

Mr Catlin also highlighted the governments target of going from 82,000 charging points to 300,000 by 2030.

"So, 40% of households in the UK dont have a driveway, therefore, theyre less likely to have a home charger and, therefore, theyre less likely of course to buy an electric car on that basis."

Announcing the new support, Alexander said: "This EV grant will not only allow people to keep more of their hard-earned money, itll help our automotive sector seize one of the biggest opportunities of the 21st Century."

But shadow transport secretary Gareth Bacon said: "Labour are forcing families into more expensive electric vehicles before the country is ready," adding that EVs were "a product people demonstrably do not want".

"Labour are putting net zero ahead of common sense and ahead of the family finances," he said.

The government said: "The discount means that zero emission cars are now cheaper to buy and run than ever before, and comes on top of preferential tax rates, delivering real savings for working families."

Jimmy Kim, a 43-year-old from London, has been weighing up whether or not he can afford to move to electric.

"The financial argument for an EV compared to an efficient petrol or hybrid vehicle doesnt add up at all," he said.

He added that the long-term cost of EV ownership, "coupled with the fact that cars devalue after 10 years", mean it "doesnt make any logical sense to buy one in the current economic climate".

But Paul Cole, 38, also from London, said he wouldnt go back to a petrol car.

"I would say having made the switch that it is brilliant and you should do it if you have the infrastructure to do so," he told the BBC.

"We had recently moved house and there was a charging point already in the driveway when we moved in. We had since had solar panels installed as well, so an electric car made perfect sense," he added.

He adds that to save money on the electricity needed to charge the car, he charges the car overnight when electricity is the cheapest.

"Weve now had it two years, and we havent regretted getting it for a moment."

Carolyn Hammond, 49, from North Devon, would like to buy an electric car but - due to living in the countryside - says she has a lower electricity supply than some more standard properties.

She says she has spoken to National Grid about upgrading their supply, but was quoted a price of £16,500 plus VAT.

That makes it "sadly, too pricey", she says.

Drivers buying electric cars can get tax breaks if their employer has a company car scheme.

Grants for EVs have previously been available, but were scrapped in 2022 under Conservative leadership.

First started in 2011, the grants were designed to make buying new electric vehicles more affordable by providing a discount for plug-in cars. The grants were originally £5,000 per vehicle, but by the end of the scheme had been reduced to £1,500.

When the scheme ended, the Department for Transport said funding would be "refocused" towards the main barriers to the electric vehicle transition, such as public charging, and supporting the purchase of electric vans, taxis and motorcycles.

Additional reporting by Your Voice, Your BBC and Connie Bowker.

Update 15 July: An earlier version of this article referred to a potential EV car buyer having "single phase electricity". We have now amended the article to make clear that upgrading her electricity supply was not economically feasible.

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