What cars are eligible for the EV grant?

On the 15^th July, the UK government announced that it would be setting aside a hefty £650 million to fund their new Electric Car Grant (ECG) for EVs under £37,000 to revitalise floundering uptake and encourage manufacturers to shift towards more affordable pricing. Unlike its predecessor (the Plug-in Car Grant), the ECG obligates manufacturers to register their vehicles for the subsidies being offered by the government, rather than having the driver apply. Additionally, the scheme is divided into bands, with the discount varying depending on which band a vehicle is allocated. Models in Band 1 are entitled to the maximum £3,750, while those in Band 2 can claim a lower £1,500.

The government determines eligibility by analysing manufacturers’ Science Based Targets (SBTs), which outline their goals for reducing carbon emissions in all stages of the production cycle. In particular, the checklist drawn up by the government focuses on battery and vehicle assembly, although the grid efficiency in the country where production occurs is also scrutinised.

Due to the time taken for the government to approve these applications, and the small proportion of EVs priced below the threshold, the list of models that have satisfied the criteria for the grant remains short. However, as more vehicles are accepted, and firms respond to the new legislation, the whitelist will undoubtedly grow.

Band 1 Cars - £3,750 discount.

Band 2 Cars - £1,500 discount.

On the other hand, Band 2 has received multiple additions from a handful of brands.

These include:

The nature of the restrictions means that some of the most popular EVs in the market have been excluded from the grant scheme. Moreover, the ZEV mandate, which sets targets to incentivise the phasing out of combustion engine vehicles, requires 28 percent of all automakers’ sales in the UK to be electric, with financial penalties facing those who do not comply.

Combined, these two factors have exerted pressure on brands to veer away from premium offerings and boost volume by releasing more economical models. For those who are unlikely to qualify for the ECG, even more drastic measures have been taken, such as price cuts and in-house incentives under various guises and monikers to remain competitive.

Competitor Response

It is the Chinese brands that have exploded into the UK market who are most impacted by the scheme, as they do not meet the government’s stringent sustainability demands. In response, several of them have launched like-for-like concessions. Newcomer Leapmotor have shaved £3,750 and £1,500 off the price tags of the C10 SUV and T03 city car, respectively. Furthermore, the Chinese owned MG have deducted £1500 from privately owned MG4 and MGS5 models, and GWM have introduced their “Green Grant” to subtract £3,750 from the ORA 03 (previously dubbed the Funky Cat).

Not to be left behind, the burgeoning BYD, despite abstaining from price reductions, has extended its battery warranty to eight years and 155,342 miles for all electrified models. The Atto 3, Dolphin, and Dolphin Surf are also entitled to up to five years of servicing free of charge.

More recognisable names have also walked the same paths to ensure their customers are not denied the benefits provided by the ECG, including brands who are traditionally confined to the upper echelons of the EV market. Volvo is using the PCP (Personal Contract Purchase) avenue to deliver savings on the EC40 and EX40. The EX30 and EX30 Cross Country models are also being furnished with £1500 discounts and free Ohme home chargers.

Likewise, Volkswagen and its various subsidiaries have decided to swim with the tide and slash £1,500 from a slew of models north of the £37,000 ceiling. These include certain variants of the Volkswagen ID.3 and ID.4, Skoda Enyaq and Elroq, and Cupra Born.

Following in Volvo’s footsteps, Kia is knocking £3,750 off EV4 and EV5 vehicles, which are purchased with a PCP scheme. However, this only applies to trim levels below the £37,000 threshold and will not extend to models exceeding this, such as the flagship EV9 and popular EV6 SUV.

Going further than their South Korean counterparts, Hyundai are unfurling price reduction across their entire electric family, with the Ioniq 5, Ioniq 6, Ioniq 9, and Kona Electric being allocated a £1,500 discount, while the Inster receives the higher £3,750 reduction.

At long last, government action is compelling companies to make the necessary sacrifices to facilitate the transition to sustainable motoring. In just under a month since the ECG was unveiled, numerous automakers in addition to those discussed here, have initiated their own internal discount schemes, and it is certain that more will follow suit in the short term. Looking to the future, the ECG is hopefully the first domino in a chain that will force manufacturers to lower prices and help realise the ambitious 2030 deadline.