Electric Car
Electric Car Grant UK 2026: ECG Amounts and VED Rules
Updated 27 July 2026 · 8 min read
The old Plug-in Car Grant for cars closed in 2022. Since 16 July 2025, a new Electric Car Grant (ECG) applies an incentive directly at the point of sale — the manufacturer deducts it from the price, you don't claim it yourself, and it runs to FY2028-29 subject to funding.
Start a 2026 comparison with £0 of grant, then only add it back once you've checked the specific model is on the eligible list and the dealer has confirmed the price already reflects it.
The Electric Car Grant (ECG)
| Sustainability tier | Maximum grant | Core conditions |
|---|---|---|
| Highest tier (battery supply-chain criteria met) | £3,750 | New, fully electric, list price £37,000 or less |
| Lower tier | £1,500 | New, fully electric, list price £37,000 or less, doesn't meet the top tier's criteria |
| Plug-in hybrid or used EV | Not eligible | ECG applies to new BEVs only |
Unlike the old grant, this one is applied automatically by the manufacturer when the car is built to order — it isn't something a dealer bolts on after the fact, and it isn't available on every electric model even under the £37,000 cap.
Vehicle Excise Duty (VED): an annual cost, not a purchase incentive
VED is easy to confuse with a purchase-time cost because the first year's rate is paid when the car is registered, but it is still an annual road tax, not a one-off acquisition fee — it belongs in this calculator's ongoing running-cost fields, not the acquisition-fee section.
| VED component | 2026 rate | Applies to |
|---|---|---|
| First-year rate, zero-emission | £10 | New EV, first registration |
| First-year rate, highest CO2 band | up to £5,690 | New high-emission petrol/diesel car |
| Standard rate (year 2 onward) | £200/yr | Petrol, diesel, and electric cars alike |
| Expensive Car Supplement | +£440/yr for 5 years | List price over £40,000 (ICE) or £50,000 (EV, threshold raised 1 April 2026) |
An EV no longer gets blanket VED exemption the way it did before April 2025 — it pays the same standard rate as a petrol or diesel car, and can trigger the Expensive Car Supplement on a higher-priced model. The only place a new EV still comes out ahead here is the £10 first-year rate versus a high-CO2 ICE car's first-year charge.
Other indirect costs and benefits
DVLA charges a flat £55 first-registration fee regardless of powertrain — there is no French-style ad valorem registration tax in the UK. Workplace charging support (the Workplace Charging Scheme) and some local or employer salary-sacrifice schemes can still reduce the effective cost of an EV, but these depend on your employer and location rather than a single national figure, so this guide doesn't quote one.
How to fold incentives into your comparison
For cash or an auto loan, subtract only a confirmed ECG amount from the price before calculating depreciation — the used-car market sets resale value later, it doesn't "repay" the grant.
| Situation | How to handle it in the calculator |
|---|---|
| Cash or auto loan | Net price = list price − confirmed ECG amount; depreciation calculated from there |
| PCP (Lease-to-Own) or PCH (Lease) | Check whether the grant is already baked into the advertised monthly payment |
| VED | Enter under annual running costs, not the one-off acquisition fields |
| Workplace or salary-sacrifice benefit | Only include it once your employer has confirmed the actual amount |
Sources and method
Data and rules checked 27 July 2026.
Run the numbers for your own project
The AutoClair simulator compares the net cost of paying cash, an auto loan, a lease-to-own, and a lease over the same term, depreciation included.
Open the simulator →This article is provided for informational and educational purposes. The amounts, rates, and incentives mentioned are indicative and change regularly: verify them with official sources before making any decision. It does not constitute financial advice.