The Electric Car Grant has become an important part of the UK new-car market in 2026, offering buyers a discount on approved electric models and putting extra competitive pressure on EV pricing.
Government guidance sets two grant levels. The highest band is worth up to £3,750, while the second band offers £1,500. Eligibility depends on the vehicle being approved under the scheme and meeting the relevant sustainability, technical and price requirements.
Which cars qualify?
Not every electric car qualifies automatically. Manufacturers apply for individual vehicles to be approved, and the scheme uses criteria covering vehicle type, sustainability and price.
The current guidance states that qualifying vehicles are subject to a base price threshold of £37,000, with detailed rules applying to approved models and variants. Buyers should therefore check the official eligible-vehicle list rather than assume a car qualifies simply because it is electric.
How does the discount work?
The grant is designed to reduce the purchase price of an eligible new vehicle. In practice, buyers should confirm with the supplying retailer that the grant applies to the exact model and specification they are ordering and that the quoted price already reflects the support.
Why does a new-car grant matter to used-car buyers?
New-car incentives can influence the used market. If a grant reduces the effective price of a new EV, nearly-new used examples need to remain competitively priced. That can affect depreciation and the price gap between new and used vehicles.
Over time, stronger new-EV sales also create more future used stock. Today's grant-supported new car may appear on the used market in two, three or four years.
Should you buy new or used?
The grant does not make a new EV automatically better value. A used EV can still offer a much lower purchase price, and much of the initial depreciation may already have happened.
Compare:
- the actual new-car price after any grant and manufacturer discount
- the price of one- to three-year-old used examples
- battery warranty remaining
- insurance
- charging speed and equipment
- finance cost, not just monthly payment
Check the current list before buying
Eligibility can change as models are approved or updated. The safest approach is to check the latest information on GOV.UK before making a decision.
You can compare used electric cars alongside petrol, diesel and hybrid alternatives at Motavo.
