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A Guide to Government Grants for Electric Vehicles

5 minutes

Find out about the different government grants offered to electric car owners in the UK and see how going green could also be good for your wallet.

  • Plug-in car grants can give you up to £3,500 off the cost of buying an electric vehicle
  • Businesses are being incentivised to install charging points
  • The financial support you’re eligible for depends on the type of electric vehicle you drive
 

If you’re planning on buying a brand-new electric vehicle, you can get a discount of up to £3,500 off the purchase price.

Electric cars are sweeping the nation. More people are deciding to go electric with their cars and, as such, the number of charging stations popping up in public car parks and supermarkets is rapidly increasing. Driving this change is the government, which is offering a variety of different subsidies, tax incentives and discounts to help push the population towards zero-emission transport.

Figures seem to show this drive is working. Between April and June 2018 there was a 61% increase in the number of Ultra Low Emission Vehicles (ULEVs) registered in the UK, compared to the same period in 2016. The government is attributing this to the eligibility of many eco-friendly cars for the Plug-In Car Grant. We’ll cover this and other government subsidies that could be up for grabs if you’re thinking of going electric.

*All information correct as of March 2019

Want to figure out how much you could save? Use Zap-Map's handy car tax calculator below to see the differences between conventional and electric car costs. 

What is the Plug-In Car Grant?

If you’re planning on buying a brand-new electric vehicle, you can get a discount of up to £3,500 off the purchase price – known as the Plug-In Car Grant. However, there are different grants available, depending on the type of vehicle you’re looking at.

Qualifying vehicles include cars, vans, motorcycles, mopeds and taxis. Here’s the comprehensive list of what models are eligible for the grant. 

Eligible Category 1 Vehicles

Electric Cars

Electric cars with CO² emission levels of less than 50g/km and the ability to travel at least 112km (70 miles) with zero emissions are eligible for a grant of up to 35% off the purchase price* (maximum of £3,500). Some of the most popular electric cars that fit this criteria are:

Electric Motorcycles

Electric motorcycles with zero CO² emission levels and the capability of travelling at least 50km (31 miles) in-between charges, qualify for a grant of up to 20% off the purchase price* (maximum of £1,500). Example models are:

  • Askoll eS3
  • Askoll eSpro 70
  • BMW C evolution
  • Eccity 125
  • Eccity 125+
  • Energica Ego
  • Energica Eva
  • Scutum Silence S02
  • Torrot Muvi
  • Vmoto 100
  • Vmoto 120
  • Zero Motorcycles (all models)

    *All information correct as of March 2019

Currently, reduced charges for owners of low-emission vehicles are available under the Ultra Low Emission Discount (ULED).

Electric Mopeds

Electric mopeds that release no emissions and can travel at least 30km (19 miles) in-between charges are also eligible for a grant of up to 20% off the purchase price* (up to a maximum of £1,500). Qualifying models include:

  • Askoll eS1
  • Askoll eS2
  • Askoll eSpro 45
  • NIU M-Series
  • NIU N-Series
  • Torrot Muvi City
  • UGBEST e-City
  • Vespa Elettrica
  • Vmoto Super Soco TC
  • Vmoto Super Soco TS1200R

*All information correct as of March 2019

Electric Vans

Electric vans with CO² emission levels of fewer than 75g/km and the ability to travel at least 16km (10 miles) with no emissions can qualify for a grant of up to 20% off the purchase price* (maximum of £8,000). These include:

  • BD Otomotiv eTraffic
  • BD Otomotiv eDucato
  • Citroen Berlingo
  • Mitsubishi Outlander Commercial
  • Nissan e-NV200 (cargo van)
  • Peugeot ePartner
  • Renault Kangoo ZE
  • Renault Master ZE
  • LDV EV80 van
  • LDV EV80 chassis cab

*All information correct as of March 2019

Electric Taxis

Electric taxis with CO² emission levels of less than 50g/km and the capability of travelling at least 112km (70 miles) without any emissions are eligible for a grant of up to 20% off the purchase price (maximum of £7,500):

  • LEVC TX

Non-Eligible Category 2 and 3 Vehicles

Unfortunately, brand new Category 2 and 3 vehicles don’t qualify for the Plug-In Grant when purchased.

However, they are eligible for an up-to £500 (inc. VAT) discount off the installation costs of a home electric car charger, thanks to the Electric Vehicle Homecharge Scheme. The following vehicles qualify for this grant:

Category 2 Electric Cars

Electric cars with CO² emission levels of less than 50g/km* and the ability to travel at least 16km (10 miles) without releasing any emissions are eligible:

  • Audi A3 e-tron
  • Audi Q7
  • BMW 225xe
  • BMW 330e
  • BMW 530e
  • BMW i8
  • Hyundai IONIQ PHEV
  • Kia Niro PHEV
  • Kia Optima PHEV
  • Mercedes-Benz C350 e (with 17“ rear wheels)
  • Mercedes-Benz E350 e SE
  • Mitsubishi Outlander PHEV (except commercial)
  • Toyota Prius Plug-in
  • Volkswagen Golf GTE
  • Volkswagen Passat GTE
  • Volvo S90 Twin Engine
  • Volvo V60 D5 Twin Engine
  • Volvo V60 D6 Twin Engine
  • Volvo V90 Twin Engine
  • Volvo XC60 Twin Engine

*All information correct as of March 2019

Category 3 Electric Cars

Electric vehicles with CO² emission levels of between 50 to 75g/km that are able to travel at least 32km (20 miles) with zero emissions* also qualify for the electric home charger discount, such as:

  • Mercedes-Benz S500 Hybrid
  • Mercedes-Benz E350e AMG Line
  • MINI Countryman PHEV
  • Porsche Panamera S E-Hybrid
  • Range Rover P400e
  • Range Rover Sport P400e

*All information correct as of March 2019

London Congestion Charge

The Congestion Charge is an £11.50 daily toll that applies to vehicles driving within the London Congestion Charge Zone between 07:00 to 18:00, Monday to Friday.

Currently, reduced charges for owners of low-emission vehicles are available under the Ultra Low Emission Discount (ULED). However, this is being replaced by the Cleaner Vehicle Discount.

This will introduce new standards that enable zero-emission vehicles to qualify for a full exemption from the Congestion Charge. You can check your eligibility under the CO² emissions category on your V5C registration document and applications for the ULED closed on 8th April 2019.

Here’s the timetable* for the rollout:

8th April 2019 to 24th October 2021

New regulations will be introduced, so vehicles must meet the following criteria for a 100% discount:

  • Euro 6 emission standard
  • Emit less than 75g/km of CO²
  • Able to drive a minimum of 32km (20 miles) with zero emissions

25th October 2021 to 24th December 2025

Only pure electric vehicles will qualify for the Cleaner Vehicle Discount, meaning hybrids and other vehicles have to pay the full Congestion Charge.

24th December 2025 onwards

The Cleaner Vehicle Discount expires from this date, so all drivers have to pay the Congestion Charge, unless they have an exemption or separate discount. 

Electric cars for Business Benefits

If your business wants to replace its existing fleet of company cars, government incentives are available that can help cover the costs of switching from petrol to electric vehicles. Here are some of the schemes on offer:

100% First Year Allowance (FYA)

Organisations can claim a 100% first-year allowance to cover the cost of buying a new low CO² emissions vehicle, such as an electric car. Essentially, this allows companies to put the cost of buying new low-emission vehicles against their taxable profits.

This means businesses can claim back a 100% deduction from the first year of purchase of a brand-new vehicle.

1A National Insurance Contributions

If your business provides company vehicles for employees, you’re required to pay Class 1A National Insurance Contributions (NICs). How much you pay depends on the car’s CO² emission levels and its P11D value. 

The P11D value determines how much company car tax has to be paid for that vehicle and is calculated by the basic price plus VAT and delivery fees . 

Your company can make significant savings by switching to electric vehicles, as the contributions you need to pay are, on average, over £2,000 less over a four-year period – compared to petrol cars. 

Reduced BiK Tax

Benefit in Kind (BiK) Tax is similar to Class 1A National Insurance Contributions. The only difference is that it outlines the amount an employee will be taxed on a company car, rather than their employer. This is worked out for every car based on its CO² and its P11D value. 

For electric cars, this is currently set at 13% for 2018/19, which is the lowest percentage BiK tax rate available for any vehicle type. Should you choose to offer electric vehicles to your employees, it acts as a huge incentive. 


 

Workplace Charge Scheme

The government has introduced the Workplace Charging Scheme (WCS), which provides financial support to businesses that install electric car charging stations on their premises.
This voucher-based programme helps cover up to 75% of the purchase and installation costs. It extends to a limit of £500 for each charger socket, up to a maximum of 20 charge points per applicant across all their business sites.

If successful, the voucher is valid for four months. After the charging stations have been fitted by an authorised WCS installer, companies can then claim reimbursement through the scheme. 

*All information correct as of March 2019

Upcoming Changes

BiK rate rises, then falls

The BiK rate for electric cars is currently set at 13% for 2018/19 and is scheduled to rise to 16% for 2019/20*. However, the government is planning to dramatically reduce this to 2% in 2020/21. This means there are further incentives for businesses and employees to purchase electric company cars sooner rather than later.

Transport for London has also announced a new Ultra Low Emission Zone (ULEZ), which requires vehicles to meet rigorous emission standards, or pay an elevated fee of £12.50 for driving in that zone from 8th April 2019.

We offer specialist electric car insurance to make sure you’ve got the right cover for your needs.

*All information correct as of March 2019

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