Tips and advice

Plug-in car grant: a complete guide

The PiCG has been extended until 2022/23 but is now less than it was before

Mazda MX-30 charging

The Government’s Plug-in Car Grant (PiCG) was established to make low-emission and electric cars more appealing and affordable. It aims to get more people to buy these vehicles to help cut down on local pollution and the UK’s overall CO2 emissions. Manufacturers spend a lot of money developing electrified cars and the battery tech they use, which is why they tend to cost much more than equivalent petrol cars.

The Government has revised the terms of the PiCG several times since it was introduced in 2011 to keep pace with developing technology; it’s now only available for fully electric cars. The latest changes were announced on 18 March 2021, reducing the grant to £2,500 (from £3,000 previously). Additionally, the grant can only be applied to electric cars with a price of up to £35,000, a significant drop from the previous £50,000 limit.

In the 2020 Spring Budget, it was announced the PiCG grant will be available until at least the 2022/23 financial year.

While EVs are expensive, the PiCG represents a substantial discount, and there are of course further cost-saving benefits once you’ve bought an electric car. VED (road tax) is free for drivers (from April 2020 onwards), and recharging costs considerably less than paying for petrol or diesel. You won’t have to pay to enter any low-emission zones for the foreseeable future either.

The latest adjustments to the grant in March 2021 means that electric cars with a price of more than £35,000 are no longer eligible for the grant. According to official Government guidance, a car is eligible for the PiCG providing the purchase price before options is under £35,000. Delivery charges and the first registration fee also aren’t included in the cost for the purposes of determining grant eligibility. Full guidance can be found here.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/936572/plug-in-portal-guidance.pdf

This revised £35,000 price threshold means some premium electric models like the Tesla Model 3 and BMW i3 are no longer eligible for the grant, effectively making them more expensive than they used to be. Some cars straddle the threshold, so if the model you want is priced close to £35,000, it's worth checking which versions are eligible for the discount. Electric vans, taxis and motorcycles are also eligible for grants.

Plug-in hybrids have not been eligible for the PiCG since 2018. We should point out that the grant doesn’t specifically exclude hybrid vehicles, but no hybrid vehicles currently meet the criteria. By the time any do qualify, it’s likely that the PiCG will have been withdrawn. The Government puts EVs and hybrids into three categories, with only cars in Category 1 (and under £35,000) eligible for the £2,500 grant.

  • Category 1 (eligible for the PiCG): 70+ miles of electric range, CO2 emissions under 50g/km
  • Category 2: 10+ miles of electric range, CO2 emissions under 50g/km
  • Category 3: 20+ miles of electric range, CO2 emissions between 50-75g/km

However, if your car falls into Category 2 or 3 it’s eligible for a home-charging grant. This subsidy, called the Electric Vehicle Homecharge Scheme, means that the Government will pay for a charger to be fitted at your address. It’s worth up to £500, so still represents a hefty saving if you are looking at plug-in hybrid cars.

In 2011, the grant was introduced to encourage more people to buy eco-friendly vehicles. Until 2016, you could save up to £5,000 on an electrified car but then the grant was reduced to £4,500. Cars that could run on electric power for 10 miles or more were eligible for a grant of up to £2,500. The EV grant was then reduced to £3,500 in 2018. In early 2020, the grant was reduced to £3,000 for cars with a purchase price of under £50,000. In March 2021, the grant was slashed further still to £2,500, and it can now only be applied to cars costing less than £35,000.

The Tesla Model S was designed from the ground up as an all-electric family hatchback

You don’t need to apply for a PiCG, as the manufacturers will have done that for you. Dealers will then reduce the price accordingly, so the grant applies regardless of whether you buy your electric car outright or on finance. You may also hear this grant being referred to as the OLEV grant - OLEV is a governmental body and the acronym stands for Office for Low Emission Vehicles.

What is a PHEV?

A few of these cars have ‘PHEV’ at the end, and these letters stand for Plug-in Hybrid Electric Vehicle. In other words, it’s a car that has a petrol or diesel engine alongside a battery pack that is recharged when plugged into the mains. Most, if not all, manufacturers offer a wall charger that can be installed at your home. These wall chargers are much more powerful than your standard electricity sockets - it would take significantly longer to recharge the battery from a household three-pin socket. Read more about PHEVs in our guide.

Which electric cars are eligible for a plug-in car grant?

Which cars are eligible for the Electric Vehicle Homecharge Scheme?

The list of all the cars eligible for the Electric Vehicle Homecharge Scheme is too long to publish here, but you can check out every car on the OLEV website.

Read our guides to the best small electric cars and cheapest electric cars.

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