Five best EVs to buy with Labour’s new £3,750 Electric Car Grant

The Government has reintroduced grants to slash the price of some new electric cars as part of its efforts to boost sales before the end of the decade. 

Transport Secretary Heidi Alexander has today (Monday) unveiled Labour’s £650million Electric Car Grant, which comes three years after the previous Tory regime scrapped its own plug-in car grant.

The Department for Transport confirms only fully electric models priced at £37,000 or less are eligible for the new grants of up to £3,750, which will be available from Wednesday with funding confirmed up until 2028-29.

However, there are a number of caveats.

Firstly, the scheme will not immediately be available, despite officially launching on Wednesday. That’s because manufacturers need to apply for eligibility for vehicles in their ranges, rather than buyers registering grants at the point of purchase.

And not all grants will have a value of £3,750. There will be a two-tier approach to the value deducted from the recommended retail price (RRP), which is determined by how green the manufacturing process is for each different model.

The RAC says the grant’s restrictions mean drivers will be ‘picking models that are not only better for their wallets, but better for the planet too’.

We’ve picked five of the best EVs that are certain to be eligible for the grant – though we will have to wait to find out which will qualify for the full grant amount of £3,750.

The Government has reintroduced grants to slash the price of some new electric cars as part of its efforts to accelerate sales before the end of the decade

What is the Electric Car Grant?

The Electric Car Grant (ECG) is the Government’s new big hope to drive sales of EVs in the run-up to the end of the decade.

It comes three years after the previous Tory administration prematurely scrapped its Plug-in Car Grant (PiCG), which it launched in 2011.

Over its 11-year spell, the PiCG amount was gradually wound down; having originally offered to slash the price of any new EV or plug-in hybrid by £5,000 in 2011, by the time the scheme was closed in June 2022 only fully-electric cars below £32,000 were eligible, and the amount knocked off the RRP just £1,500.

That said, the scheme proved incredibly successful, provided more than £1.4billion to motorists to support the purchase of nearly half a million electric and hybrid vehicles in that period.

Transport Secretary Heidi Alexander said the grant will  allow people to ‘keep more of their hard-earned money’ when buying EVs

The new ECG will hope to recreate reignite electric car demand among private buyers with the same impact. 

It will be supported by a £650million backing from the Government and will be available for the next three years. 

However, funding will remain under review, with the scheme subject to amendments or an ‘early closure’ with no notice should the pot of available money ‘become exhausted’, the DfT clarified.

Only cars up to £37,000 qualify for the grant, which rules out premium models, including every Tesla on sale.

The Government’s hope is that by making the most financially attainable EVs more affordable, it will make switching to electric more appealing to private buyers rather than just those who lease EV or acquire them as company cars or through salary sacrifice schemes. 

The new scheme will also differ from the PiCG in that it has a two-tier approach that is based on sustainability criteria

How does the Electric Car Grant work? 

Unlike the PiCG, buyers will not be allocated the grant amount at the point of purchase.

Instead, manufacturers must apply to be eligible for the scheme with their sub-£37,000 cars on a ‘first come, first served’ basis. 

This means that motorists will not need to fill in any additional paperwork to receive the grant, with all administration handled by the car maker, dealership, and the Government.

But because manufacturers must apply for the scheme, it may take weeks for discounted EVs to begin appearing in showrooms. 

The new scheme will also differ from the PiCG in that it initially be a two-tier approach based on ‘sustainability criteria’, with only the greenest models – considered in ‘band one’ – receiving the full £3,750 amount. Band two cars with a lower eco rating will be eligible for a reduced amount that’s not yet clarified.

Bands are determined by each brand’s Science-Based Target (SBT) – an industry-wide scheme, with manufacturers needing to meet carbon scores below a specific criterion to achieve the highest green standard. 

The bands – which could later expand beyond two tiers – are determined by how much CO2 is emitted in an EV’s production, assessing the energy used during assembly as well as battery production. Threshold levels have yet to be made public. 

According to early reports,…