The Government’s reintroduction of electric vehicle (EV) grants – worth up to £3,750 – may look like a bold move to support the transition to zero-emission transport. But scratch beneath the surface, and it’s clear that this initiative risks creating more confusion than confidence among car buyers, writes Fraser Brown of automotive consultancy, MotorVise.
At first glance, it seems welcome: a new £650 million scheme running until 2028 and aimed at cutting the cost of new EVs and nudging motorists away from petrol and diesel. However, its limited scope and phased implementation – with orders only possible from mid-August – means that far from accelerating EV adoption, it could stall the market and widen the gap between government ambitions and what ordinary working people can afford.
Let’s begin with eligibility. The grant only applies to EV models priced at or under £37,000 – which immediately rules out more than two-thirds of the 102 electric vehicle models currently on sale in the UK. This completely excludes premium brands like Jaguar Land Rover, Britain’s largest manufacturer, undermining any claims that this is a boost for British industry.
However, some manufacturers may respond by adjusting list prices to bring more models below the £37,000 cut-off. If so, we may see retail prices and real-world transaction prices converge.
Manufacturers must now apply for their models to be included in the scheme, and to qualify, they must hold a verified Science Based Target and meet strict embodied carbon thresholds tied to where their vehicles and batteries are produced.
I expect that it could be as late as Q4 this year before final approvals are complete. Applications from manufacturers open on 16 July, but no orders can be submitted to the grant portal until 11 August. Even then, only vehicles officially approved for the scheme can be processed, creating a delay that may stall consumer confidence.
Ironically, a policy designed to boost sales in the short term may do exactly the opposite.
In the majority of cases, I expect that the discount is more likely to be closer to £1,500 than the maximum £3,750, which means that it is unlikely to significantly reduce the cost barrier for most buyers. With more than 80% of new cars in the UK bought through PCP finance agreements, the monthly payment – the figure that really matters to most consumers – will barely shift.
There’s another unintended consequence: grants will depress residual values. If today’s cars are cheaper thanks to a grant, tomorrow’s used models are worth less. This means higher depreciation, which in turn makes finance costs more expensive. So, in some cases, this grant could actually increase the monthly payments on new EVs. Remember, depreciation Is a cost passed onto consumers
believe that the Government has missed a golden opportunity. A better-targeted intervention would have been support for used EV sales. Around two in five used electric vehicles are priced below £20,000. These are the models within reach of working families, those for whom brand-new cars are often a non-starter. By making used EVs more affordable, through grants or reduced VAT, the Government could have stimulated demand across the entire supply chain, helping shore up new EV sales as well by supporting stronger resale values.
Instead, we’re left with a scheme that helps a small number of buyers, offers minimal impact on affordability, and risks stalling the market while details are ironed out.
Affordability is only part of the equation. Public perception of EVs is still clouded by persistent misinformation around range anxiety and charging access. In reality, more than 60% of UK households have the potential to support home charging, making EV ownership not only convenient but also cost-effective for the majority. Most EV drivers choose vehicles with a range that easily covers their daily needs, meaning they rarely need to rely on more expensive public charging networks.
While continued investment in public charging infrastructure is welcome, the real challenge lies with the estimated 33% to 44% of households, those living in flats, apartments, or terraced housing without off-street parking, who cannot easily install a home charger.
This is the group at risk of being left behind in the transition to zero-emissions motoring. Targeted investment to support on-street and community charging solutions is urgently needed to make EV adoption genuinely accessible to all, not just those with a driveway, and not just those able to afford a new EV.
The Government is right to say that EVs represent one of the biggest opportunities of the 21st century. But good intentions are not enough. Incentives must be comprehensive, well-designed, and realistic. This scheme, though well-meaning, appears to fall short on all three counts.
So, while the announcement signals a positive step in acknowledging the need to stimulate the EV market, I urge ministers to go further. Extend the scheme to the used market. Prioritise residual values. Simplify the eligibility process. And invest in charging infrastructure that works for everyone, not just those who can already afford it. Only then will the transition to electric vehicles become a genuine solution, not just a political soundbite.