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Electric Car Grant and EV tax in the UK

The Electric Car Grant takes up to £3,750 off eligible new electric cars priced at £37,000 or less. Electric cars pay £10 road tax in their first year, then the standard rate (£200 in 2026/27), plus £440 a year for five years if the list price is over £50,000. From April 2028 a pay-per-mile charge of 3p a mile will apply too.

The Electric Car Grant

The grant is applied by the seller as a discount, so you do not apply yourself. Band 1 cars get up to £3,750 and Band 2 cars up to £1,500, depending on the manufacturer's sustainability criteria. The price cap is £37,000, but higher trims up to £42,000 can qualify where a version with the same battery and motor is available at £37,000 or less. It only covers new, fully electric cars (not hybrids, plug-in hybrids or used cars) and is due to run until the 2028/29 financial year. See the cars in our list that appeared on published grant lists, and confirm the exact version with the seller.

Road tax (VED)

Since April 2025, new electric cars pay £10 for their first year and then the standard rate, which is £200 in 2026/27. Cars with a list price over the expensive car threshold also pay a supplement of £440 a year for five years, from the second year the car is registered. For zero-emission cars the threshold is £50,000 from April 2026; it stays at £40,000 for petrol and diesel cars. See do electric cars pay road tax? for older cars.

Pay-per-mile tax from April 2028

Electric Vehicle Excise Duty (eVED) will start on 1 April 2028, charging 3p a mile for battery electric and hydrogen cars and 1.5p a mile for plug-in hybrids, on top of road tax. See eVED explained.

Company cars and salary sacrifice

Company car tax on fully electric cars is 4% of the list price in 2026/27, rising to 5% in 2027/28 and 7% in 2028/29. Plug-in hybrids are taxed on emissions and electric range. Salary sacrifice pays for the car from pre-tax salary, so savings depend on your tax band and the contract, including what happens if you leave your employer.

London

Electric cars lost their full exemption from the London Congestion Charge in December 2025. See the Congestion Charge for electric cars.

Motability

If you or someone you care for receives an eligible disability allowance, ask the Motability Scheme which electric and hybrid cars are available.

Frequently asked questions

Is there a government grant for buying a new electric car?

Yes. The Electric Car Grant takes up to £3,750 off eligible new electric cars priced at £37,000 or less (or up to £42,000 for higher trims of a qualifying car). The seller applies it as a discount. Band 1 cars get up to £3,750 and Band 2 cars up to £1,500.

Do plug-in hybrids or hybrids qualify for the Electric Car Grant?

No. The grant only covers new, fully electric cars that are on the government's approved list.

How is a company car EV taxed?

Company car tax on fully electric cars is 4% of the list price in 2026/27, rising to 5% in 2027/28 and 7% in 2028/29. Plug-in hybrids are taxed on emissions and electric range.

How long will the Electric Car Grant run?

It is due to run until the 2028/29 financial year, but funding and the eligible list can change, so check GOV.UK before you order.

Official sources

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Page reviewed 2026-09-23. See how we check and our sources. General information, not financial, legal or technical advice.