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Electric cars are becoming more affordable, but they’re still a major investment – especially for households on tighter budgets. That’s why the UK government is stepping up support in 2025, with new purchase incentives, tax breaks, and infrastructure funding.
With £2.3 billion dedicated to encouraging green vehicle adoption and the 2030 deadline to end new petrol and diesel sales approaching, the government is still very much backing electric cars.
Before we get into the latest updates, it’s worth asking: why is the government so determined to accelerate the shift to electric vehicles? The short answer is climate change.
The UK has committed to reaching net-zero carbon emissions by 2050, and transport accounts for over a quarter of the country’s total emissions. But it’s not just about saving the planet (though that’s obviously important!)
There’s also the matter of air quality in our cities, energy security, and keeping up with the global shift toward electric mobility. Countries around the world are making similar moves, and the UK doesn’t want to be left behind. So, when does the government want all cars to be electric? The current deadline is 2035, after an earlier 2030 target was pushed back.
Yes – new incentives for private EV buyers launched in 2025, including a direct discount on new electric cars, which we’ll explore below.
The government still offers several ways to make going electric more affordable, whether you drive for work or run a business. Here’s a list of them all:
After previously phasing out most upfront grants for private buyers, the government has now introduced a direct discount to boost electric car adoption. Through a £70 million funding package, buyers can get up to £3750 off the cost of a new electric car, provided it falls under a £37,000 price cap.
This new government rebate on electric cars is targeted specifically at more affordable electric models, making it easier for households, especially lower-income families, to switch from petrol to electric.
If you drive a company car or are thinking about getting one through a salary sacrifice scheme, this is where the government really rolls out the red carpet. For 2025/26, electric company cars benefit from a very low Benefit-in-Kind (BiK) rate of just 3%, compared to up to 37% for petrol and diesel models. BiK rates are set to stay low for years, rising to only 9% by 2029/30.
What does this mean in real money? A higher-rate taxpayer with a £40,000 electric company car could save around £4000 a year compared to a petrol model. Not too shabby!
Until March 2026, businesses can take advantage of 100% first-year capital allowances on electric vehicles and chargers. For a company buying a £50,000 electric van, that’s £12,500 in corporation tax savings – a significant chunk of change.
The government has kept support for electric vans and accessible vehicles going strong through the Plug-in grants.. Small vans can still get £2500 off, and larger vans qualify for £5000, with these schemes running through to March 2026. Check which vehicles qualify for the grant here.
On top of that, the price limit for grants on wheelchair-accessible vehicles has risen from £35,000 to £50,000, helping more drivers get behind the wheel of an electric vehicle.
Salary sacrifice schemes keep delivering strong savings, with monthly costs often 30-40% lower than if you bought an EV outright. Thanks to low BiK rates and payments taken from your pre-tax salary, you pay less income tax and National Insurance, making EVs more affordable for employees and cheaper for employers.
Although there were worries that a recent government review into pension salary sacrifice models might impact EV schemes, they remain unaffected. As we explained in our recent article on how salary sacrifice works in 2025, you can still enjoy this tax-efficient route to driving electric.
It’s not all plain sailing. As of April 2025, electric vehicles are no longer fully exempt from road tax. Brand-new EVs face a £10 charge in their first year, followed by £195 each year afterwards. If your electric car’s price tag exceeds £40,000, there’s an additional £425 annual fee from years two through six – pushing the total yearly cost up to £620.
Electric vans have also seen a big jump, now having to pay the standard annual fee of £335 for light commercial vehicles. For more information on all these changes, check out our breakdown: What Are the Tax Rules for EV Drivers in 2025?
Local incentives are changing, too. From December 25, 2025, electric vehicles will no longer be exempt from London’s congestion charge, impacting over 112,000 cars. Starting January 2026, everyone will have to pay the £15 daily fee.
Electric vehicles will still be exempt from the Ultra Low Emission Zone (ULEZ) charge, saving drivers £12.50 a day.
While not direct incentives, government funding for charging points is key to making electric cars practical for everyday use. Charging infrastructure in the UK has expanded rapidly, with almost 81,000 public charge points available by May 2025, spread over nearly 40,000 locations.
The number of ultra-fast chargers has also surged, nearly doubling in 2024 alone.
Much of England’s infrastructure progress is driven by the government’s £450 million Local Electric Vehicle Infrastructure (LEVI) programme, which focuses on installing chargers where they’re most needed – especially for those without private parking.
Despite this growth, there are still hurdles to overcome. Less than half of motorway service stations currently offer the government’s recommended minimum of six high-speed chargers. Investments like the £950 million Rapid Charging Fund aim to address these gaps, but access remains uneven across the country, with London boasting the majority of on-street chargers, while areas such as Wales and Northern Ireland continue to lag.
Scotland is absolutely smashing it when it comes to EV support. They’re the only UK nation offering interest-free loans for EV purchases – up to £23,000 for qualifying households earning under £50,000. Drivers in Scotland can also access a £400 grant towards the cost of a home charger, making home charging more accessible.
The country hit its target of 6000 public EV chargers in October 2024, plus they’ve got more public charging points per capita than anywhere else in the UK outside London.
Rather than offering direct purchase incentives, Wales is focusing on building a strong charging network. The target is to have rapid chargers every 20 miles along key routes by the end of 2025.
Cardiff plans to expand its network from around 200 public chargers to 600-700 by 2026, and the Cardiff Capital Region received the largest slice of ULEV funding in Wales – £1.3 million. Despite the investment, take-up remains low, as just 1.2% of registered vehicles in Wales are electric.
Unfortunately, Northern Ireland is significantly lagging behind with only 20 charging devices per 100,000 people and no regional purchase incentives. However, private companies are stepping in with significant investment – ESB Cars is leading a £10 million program, while companies like Fastned and Weev have invested over £53 million combined in new charging infrastructure. Progress is still slowed in some areas due to outdated planning regulations.
This year, the government’s Zero Emission Vehicle (ZEV) mandate means 28% of new cars and 16% of new vans sold must be electric. These targets will rise each year until 2035, when all new vehicles will have to be zero-emission. The aim is to make EVs more affordable and widely available.
To help manufacturers meet these goals, the government increased flexibility in 2025. The cap on emissions credit transfers between cars and vans was raised to 90%, and the period to trade these credits was extended to 2029. We’ve explored these updates in more detail in our latest briefing on the ZEV mandate.
Meanwhile, investment in charging infrastructure continues to grow. The £450 million LEVI fund is focusing on expanding access to chargers, especially for those without off-street parking, but there are still areas with limited charging options – so more progress is needed.
Still, with stronger government support and better infrastructure, making the move to electric is more straightforward than ever. In fact, EV registrations surged in early 2025 – a clear sign that more drivers are making the switch. Want to stay ahead of the curve? Sign up to the Green Car Guide newsletter for the latest tips, news, and everything you need to drive green with confidence.
