Going Green With Grants: Your Guide To Electric Car Government Grants
This image is sourced from FleetNews
Climate change is a major concern, with 70% of people surveyed in 2020 saying it is having at least some impact where they live. Around half of those surveyed see it as a very serious problem. Since then, things have only worsened. 2024 is on track to be the hottest year on record.
It’s easy to feel deflated and powerless, but small changes - like eating less meat, using renewable energy, reducing waste, and rethinking how we travel - can make a real impact. In the UK, domestic transport emits 99 million tonnes of CO₂ equivalent, with road travel accounting for 91%, making it the largest source of greenhouse gas emissions. With this information and the ban on buying new ICE vehicles (internal combustion engine, i.e., petrol and diesel cars) from 2030, more people are looking to make the switch to an electric car.
This article explores the UK government grants in place available for electric cars and charging to make the switch easier and cheaper.
How Do Government Grants Work?
The UK government offers grants to support the purchase or charging of electric vehicles as an incentive for more people to switch their petrol or diesel cars for an eco-conscious alternative. There are important things to consider, like eligibility, the application process, what grants are available and any updates to smaller, regional schemes.
The Electric Vehicle Chargepoint Grant (EVCG)
The Electric Vehicle Chargepoint Grant encompasses business and home charging points and was designed to encourage more people, especially those who rent, to transition to an electric car. It replaced the Electric Vehicle Homecharge Scheme (EVHS) in April 2022.
How Does The EVCG Work For Residential Charging?
The EVCG can be broken down into the following residential grants:
Residential Landlords: Grants of up to £350 per socket for existing property that the application owns or manages but does not live in. This can include housing estates, apartments, private social housing or public sector organisations.
Residential Carparks: Grants of up to £30,000 off the cost of the infrastructure needed to install charge points in residential carparks.
Flat Owners & People Living In Rented Properties: Grants of up to £350 for EV drivers who live in a flat or rent any residential property.
How Does The Workplace Charging Scheme (WCS) Work?
This is a voucher-based scheme, designed to provide organisations with support towards the upfront costs of purchase and installation of EV chargers. Successful applicants are given an identification voucher, which can be used to install multiple chargers.
Who Is Eligible For WCS?
The applicant must be a registered business, charity or public sector organisation that meets the following criteria:
Located in England, Wales, Scotland and Northern Ireland,
Have dedicated off-street parking for staff,
Have a current or future need for charging EVs,
They own the business premises or have the landlord’s permission to install the chargers,
They use an OZEC-approved installer to install the chargers.
How Long Will The EVCG Last For?
Funding for the EV Charging Grant has been confirmed until the 31st of March 2025. As with any grant, the government have the right to end or change it at any point. For example, the ORCS grant (mentioned later on in this blog) has now ended for new applications.
Local Electric Vehicle Infrastructure (LEVI) Funding
The LEVI fund was designed to support local authorities in England to plan and deliver charging infrastructure for residents without off-street parking. This is different to the On-Street Residential Charge Point Scheme (ORCS), which is now closed to new applicants.
How Does LEVI Work?
The LEVI fund has two main objectives: to deliver a change in the deployment of local and primarily low-power on-street charging infrastructure across the UK and to commercialise and invest in the local charging infrastructure. It includes capital funding, which helps to cover the costs of installing charge points, and capability funding, which helps local authorities develop the skills and resources needed to plan and implement these projects.
Who Is Eligible?
The LEVI fund aims to help local authorities. To access capability funding you must be either a tier-one local authority or a combined authority in England.
When Does The Levi Fund End?
The LEVI fund has different application deadlines and funding tranches. Here’s an outline of them:
Tranche One: The deadline for stage two application for the 2023/4, funding was November 30th 2023,
Tranche Two: The application deadline for the 2024/5 funding was July 19th 2024.
By that assumption, the next Tranche will be in the next financial year, so keep an eye out on the Government website on the dedicated Levi fund page.
Tax Incentives For Electric Cars
There are some tax incentives for electric cars, making them more appealing than their petrol or diesel counterparts. These include:
Vehicle Excise Duty (VED) Exemption
Pure electric vehicles are currently exempt from VED, which is otherwise known as road tax, which reduces the cost of ownership significantly. However, from the 1st of April 2025 rates will change for EVs and all other cars. Here’s what was laid out in the Autumn Statement:
Zero-emission cars will pay the lowest first-year rate at £10 until 2029-30,
Rates for cars emitting 1-50 g/km of CO2 including hybrid vehicles will increase to £110 for 2025-26,
Rates for cars emitting 51-75 g/km of CO2, including hybrid vehicles, will increase to £130 for 2025-26,
All other rates for cars emitting 76 g/km of CO2 and above will double from their current level for 2025-26.
Benefit-In-Kind (BiK) Rates
Employees receiving an electric company car benefit from lower BiK tax rates, set at 2% of the vehicle's list price for the 2024/25 tax year and then it will rise by 1% every year thereafter until it reaches 5% in 2028.
BiK rate for electric vehicles will increase by 2 percentage points per year in 2028-29 and 2029-30, rising to 9% in 2029-30.
BiK rates for hybrid vehicles or cars with emissions of 1-50g of CO2 per kilometre will rise to 18% in 2028-9 and 19% in 2029-30.
The rates for all other vehicles will increase by 1 percentage point per year to 38% in 2028-29 and 39% in 2029-2030.
Where Could The Government Improve?
Overall, the UK government has actively supported the provision of grants and incentives to help people make the switch to electric vehicles. However, there are still opportunities for further improvement or development.
More Consistent Policies
Government policies vary due to shifting political priorities, industry influence and regional disparities which can lead to inconsistencies.
A key example is from September 2023, when Prime Minister Rishi Sunak announced that the ban on pure petrol and diesel cars would be delayed from 2030 to 2035. Labour has moved the ban back to 2030 since coming into power.
Make Grants More Accessible
Ensuring government grants and incentives benefit people of all income levels can still be a challenge. Some may still find electric cars out of reach because EVs can have a higher upfront cost compared to petrol cars.
Expanding The Charging Infrastructure Further
Continued investment into the UK charging infrastructure is important for the future of electric cars. EV owners need to have access to charging points across the UK.
More Support For Used EVs
Government incentives primarily target new electric cars. Soon, we might see a broader plan that includes support for used electric cars. This could make electric cars even more accessible for the average person.
Expired EV Government Grants
Many EV government grants have now expired - here, we will list the ones that are no longer available but were able to play a crucial role in getting more people into electric cars.
The Plug-In Car Grant
The plug-in car grant stood as one of the UK's initial substantial grants for electric cars because it offered funding towards the purchase of an electric vehicle. In June 2022 it unfortunately ended.
What Was It?
As previously mentioned, it was a financial incentive that gave buyers of an EV a discount - 35% of the car’s purchase price, up to a maximum of £1,500. It was first made available in 2011 and the amount offered was cut back numerous times. The grant facilitated support for nearly half a million EVs over a decade, and sales surged from less than 1,000 in 2011 to almost 100,000 within the first five months of 2022.
Why Was It Discontinued?
There was a surge in public adoption of EVs in 2022. But the government stated that they needed to focus “moves to improving EV charging” and to “concentrate funding on expanding the public charge point network as well as electric taxis, vans, trucks, motorcycles and wheelchair accessible vehicles.”
On-street Residential Chargepoint Scheme (ORCS)
This scheme allowed local authorities to request funds for installing electric car chargers on residential streets. This is helpful for people who do not have private parking but still need access to an EV charger.
What Was It?
ORCS grants could be used to fund up to 75% of the capital costs of installing residential EV chargers. The OZEV would provide a maximum of £13,000 per EV installation. For charge points that cost more than £7,500 to install, evidence of high connection costs is required.
For every successful grant application, the OZEV issued 75% of the cost upfront with the remaining 25% to be claimed once the installation was complete. Councils were eligible to apply for this grant.
The ORCs funded 8,354 public charging devices since the scheme was established in 2017, which represented £31.1 million of grant funding across 146 councils.
Why Was It Discontinued?
The scheme is now closed to new applicants and still covers devices installed under the scheme and the devices proposed for installation under the ongoing ORCS projects. All projects must be finalised before March 2025. It was discontinued as it wanted to expand the public electric charge point network.
The Electric Vehicle Homecharge Scheme (EVHS)
The EVHS is no longer open to new applicants and was replaced with the EV Chargepoint Grant.
What Was The EVHS?
It was designed to give funding up to £350 on the cost of installing EV charging devices at domestic properties across the UK. 340,222 domestic charging devices were installed under the EVHS, with a grant total of £140.8 million. It was first launched in 2014 and was available to any property owner who has an EV.
Why Was The EVHS Discontinued?
It was confirmed that from the 1st of April 2022, the scheme would no longer be available to homeowners. In its place came the EV Chargepoint Grant, which is only available to those who live in a flat or rent a property which represented a much smaller pool of EV owners.
Where Does Electric Car Salary Sacrifice Fit Into This?
The UK government introduced electric car salary sacrifice to help drivers access better savings on their journeys to net zero. This is an employee benefit where a company is able to lease an electric car on their employee's behalf. On a typical lease, the employee would pay with their net salary (salary after tax). Salary sacrifice allows the employee to deduce this from their gross salary (before tax) to allow them access to bigger savings.
Salary sacrifice is currently the most affordable way for anyone to get an electric car.
Image sourced from: Official MG Website
If you choose to lease an MG4 Trophy Long Range 64kWh, you would save £172 on income tax and £9 on national insurance contributions every month, bringing your monthly overall lease cost down from £431 to £260. As you can see in the table below:
| MG4 Trophy EV Long Range 64kWh | Amount (£) |
|---|---|
| Average Monthly Salary Sacrifice | £431 |
| Employee Income Tax Savings | -£172 |
| Employee National Insurance Savings | -£9 |
| Average Benefit-in-Kind Tax Over Term | +£40 |
| Net Cost/You Pay | £290 |
Making EVs More affordable
Salary sacrifice saves 20-50% on the cost of any electric car by paying from salary before tax. Affordable electric cars and clear sustainable options can motivate more people to speed up the shift towards net zero.
Lower Maintenance And Running Costs
Driving an electric car has lower maintenance and running costs because of the absence of oil changes, spark plugs, timing belts or exhaust system repairs. Regenerative braking systems reduce wear on the brake pads and discs, elongating their lifespan significantly. This makes EVs extremely attractive over their petrol or diesel counterparts.
Corporate Social Responsibility Goals
Businesses promoting electric cars reduce their environmental impact. It also improves air quality and demonstrates their commitment to being eco-friendly leaders. This aligns with CSR objectives related to sustainability and employee engagement. When businesses are trying to have a more positive impact on the environment, salary sacrifice is a powerful tool.
Make The Switch From Petrol To Electric With The Electric Car Scheme.
Switching to an EV through an electric car salary sacrifice scheme is a great way to save money whilst doing your bit for the environment. Browse the best cheapest used electric cars available now, by reading our latest blog.
Note: Pricing shown is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; 10,000 miles pa, 36 months, £70,000 salary per annum and are inclusive of Maintenance and Breakdown Cover. Images on this site are sourced from third-party websites as listed below each image and are the property of their respective owners. If you believe any content infringes your copyright, please contact us at marketing@electriccarscheme.com.
Last updated: 17/12/24
