What is the Plug-in Car Grant?

  • Plug-in Car Grant runs to 2023
  • Amount reduced from £3,000 to £2,500
  • EVs costing more than £35,000 now not included

New Plug-in Car Grant rules came into effect on 18 March 2021, meaning the scheme now provides a £2,500 discount on fully electric vehicles priced below £35,000.

Sales of electric vehicles are flying. Despite car registrations hitting a 28-year low in 2020, sales of electric vehicles (EVs) shot up to 108,205, representing a 180% year-on-year rise.

People are really buying into an electric future. But back in 2011 electric car sales were still low. To encourage the adoption of EVs the government created the Plug-In Car Grant. The scheme then provided £5,000 off the list price in a bid to help reduce emissions and improve air quality.

The latest Plug-in Car Grant cut by the government will allow the grant to last longer. While the government also says the new £35,000 price cap is in place because higher-priced vehicles are 'typically bought by drivers who can afford to switch without a subsidy from taxpayers.'

Keep reading to find out if you qualify for Plug-in Car Grant, how you apply for it, and what cars are eligible.

Do I qualify for the Plug-in Car Grant?

The new vehicle you're buying must have a zero-emissions range of at least 70 miles, and quoted CO2 emissions of less than 50g/km. Vehicles qualifying for this are eligible for the full grant –  up to a maximum of £2,500. Though it’s not specified as such, the requirements to meet this category realistically only apply to fully electric vehicles – as well as the few hydrogen-powered models on sale.

>> Plug-in Van Grant cut

Plug-in Car Grant cars

Plug-in Car Grant eligible cars

How do I get the UK Plug-in Car Grant?

Thankfully, there’s no legwork needed to apply for the PiCG. If you purchase an eligible car, the dealer you’re buying from will sort out all the paperwork and the grant will be deducted from the car’s list price. The PiCG only applies to new purchases – it’s not possible to get cash off the price of a used vehicle.

The government has committed to keeping the PiCG in place until at least 2023. After this, however, it’s unclear whether it will be reduced further or perhaps removed altogether.

What about other vehicle classes?

Motorcycles, mopeds, vans, taxis and trucks all have their own classifications and are eligible for various grant amounts under the scheme. You can find out more about the electric van grant here.

Plug-in Car Grant history

In 2011 the government introduced the scheme. It provided a £5,000 cash incentive off the list price of a qualifying vehicle, and aimed to help reduce emissions and improve air quality through increased takeup of zero-emissions vehicles.

With greater numbers of EVs (electric vehicles) and PHEVs (plug-in hybrid electric vehicles) now on the roads, the government revised the PiCG in 2016, 2018, and again in 2020 reducing its scope to reflect the increase in the popularity of zero-emission vehicles.

If you bought an eligible car before 2016, the PiCG paid £5,000 towards its list price. This was reduced to £4,500 in 2016, or just £2,500 for plug-in hybrids. In 2018 the scheme was reduced further, with full EVs now receiving a grant of £3,500 while PHEVs now receive no grant at all.

In the Spring 2020 Budget, this was further reduced to £3,000, and has been adjusted so that EVs costing more than £50,000 are no longer eligible. The good news is that the 'temporary measure' has been extended to run until at least 2023.

On 18 March 2021 it was cut even further to £2,500, and was made only applicable for EVs worth less than £35,000.

Further reading

>> The cheapest electric cars
>> Electric car reviews
>> Government ban on petrol and diesel cars
>> The best small EVs