Discount of up to £3,750 on electric cars set to slash costs for thousands
Drivers across the UK have a major reason to celebrate this summer. A brand new £650 million Electric Car Grant (ECG) has just been announced, offering discounts of up to £3,750 on new electric vehicles. From 16 July 2025, car manufacturers can apply for the grant, which will directly cut the cost for drivers at the point of sale.
The grant is part of the government’s wider Plan for Change – a bold strategy to back British workers, boost green industries and get more money into people’s pockets. It’s also a key step toward meeting the UK’s commitment to end the sale of new petrol and diesel cars by 2030.
What does this mean for drivers?
Simply put, electric cars are about to become much more affordable. Any new electric car priced under £37,000 that meets strict sustainability standards will qualify. Once manufacturers are approved, eligible models will be sold with the discount already applied, making it easier than ever for families and businesses to switch to zero emission vehicles.
With savings on fuel and running costs of up to £1,500 a year, drivers will not only spend less upfront, but they’ll also save significantly over time. Combine that with reduced road tax and ongoing investment in charging infrastructure, and it’s clear that electric vehicles are no longer just for early adopters.
Good news for business too
The ECG isn’t just great for households – it’s a win for businesses and manufacturers. It supports UK production and encourages automotive companies to lead on sustainability. Those with the strongest green credentials will benefit most, which is expected to drive innovation in environmentally responsible manufacturing.
This investment is also set to stimulate economic growth. In 2024, the UK had the largest EV market in Europe, with sales up 20%. Over 380,000 zero emission vehicles were registered last year, and that momentum is only expected to accelerate thanks to this fresh incentive.
A growing charging network to match
Cost isn’t the only concern when it comes to EVs – infrastructure matters too. The government has already invested heavily in this area, with over 82,000 public charge points now available across the UK and more being added every half hour. Alongside this, a £63 million package is being rolled out to help households without driveways charge at home and expand charging points at NHS sites and business depots.
Support from industry leaders
The response from industry experts has been overwhelmingly positive. Simon Williams of the RAC says discounted cars should start appearing within weeks, while Dan Caesar of Electric Vehicles UK highlights that cost misperception has been a major barrier to adoption. This grant, he says, could be the push many need to make the switch.
Vicky Read, CEO of ChargeUK, calls the announcement “brilliant news” and says it brings confidence to investors and the public alike. And Mike Hawes of the Society of Motor Manufacturers and Traders (SMMT) believes the grant will help drive the market from 1 in 4 new cars being electric now, to 4 in 5 by 2030.
What this means for our clients
At Zyla Accountants, we know that financial decisions matter. Whether you’re a business considering fleet upgrades or a family weighing the costs of switching to electric, this grant changes the game. We’re here to help you assess the tax benefits, cash flow impact and long-term savings of making the move to EVs.
With preferential tax rates, capital allowances and now a new upfront discount, there’s never been a better time to consider your options.
Let’s talk electric
If you’re thinking about switching to electric, now’s the time to run the numbers. Contact Zyla Accountants to find out how the new Electric Car Grant could work for you or your business.