Electric Car Grant 2025: Complete Guide for Salary Sacrifice Schemes
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The government's new Electric Car Grant represents the most significant financial incentive for electric vehicle adoption since the original plug-in car grant ended in 2022. For employers considering an electric car salary sacrifice scheme, understanding how these grants work alongside existing tax benefits is crucial for maximising savings.
What Is the Electric Car Grant?
The Electric Car Grant (ECG) is a government-funded scheme offering direct discounts on new electric vehicles, running from July 2025 through to the 2028-29 financial year. Unlike previous schemes that required complex applications, this grant is applied automatically at the point of sale through approved dealers.
Grant Structure
The scheme operates on a two-tier system designed to incentivise the cleanest vehicle production methods.
£3,750 Grant
Available for vehicles demonstrating lowest production emissions
Manufacturers must have verified Science Based Targets
Represents the maximum discount available
The £3,750 grant is the maximum discount available and ensures that only environmentally committed manufacturers benefit from the full government support.
£1,500 Grant
Available for other qualifying electric vehicles
Still requires meeting all technical criteria
Provides substantial savings for budget-conscious buyers
The £1,500 grant is available for other qualifying electric vehicles that still meet all technical criteria but may not come from manufacturers with the most stringent environmental commitments.
Both grant levels apply to vehicles with a recommended retail price (RRP) of up to £37,000, including VAT and mandatory extras.
The grant functions as a direct discount applied at dealerships rather than a rebate scheme, with manufacturers receiving monthly payments from the government and passing these savings immediately to customers. This means buyers see the reduced price upfront, making electric vehicles more accessible through company electric car schemes.
Technical Eligibility Criteria
To qualify for the Electric Car Grant, vehicles must meet stringent technical requirements that ensure quality and longevity, which is particularly important for salary sacrifice users who typically lease vehicles for 2-4 years.
All qualifying vehicles must be M1 passenger vehicles with zero tailpipe CO₂ emissions, covering pure electric vehicles and hydrogen fuel cell cars, while maintaining a minimum 100-mile WLTP range capability to ensure practical daily use.
The warranty requirements are especially significant for electric car salary sacrifice users, as vehicles must carry an 8-year or 100,000-mile battery warranty with minimum 70% capacity retention throughout this period. Additionally, a 3-year or 60,000-mile general vehicle warranty is mandatory, providing crucial protection that covers the full duration of typical salary sacrifice lease agreements.
Technical approvals include UN Regulation No. 100 type approval for electrical safety, low battery degradation certification, and comprehensive safety documentation. These standards directly benefit salary sacrifice users by ensuring reliability throughout typical lease periods, providing range assurance for daily commuting, offering warranty protection that covers the full lease term, and maintaining high resale values that support long term value and quality.
Electric Car Grant and Salary Sacrifice: Maximum Savings
The combination of government grants and salary sacrifice schemes creates unprecedented opportunities for electric vehicle savings. Understanding how these benefits stack is essential for maximising your financial advantage when considering electric cars vs petrol cars.
The grant impact on monthly payments is substantial, with the £3,750 grant spread over a typical 36-month lease reducing monthly costs by £104, while the £1,500 grant provides a £42 monthly reduction. When combined with salary sacrifice tax benefits, which typically deliver 20-50% savings through pre-tax deductions, the 3% Benefit-in-Kind rate for electric vehicles, and reduced National Insurance contributions, the cumulative effect becomes compelling.
For a £35,000 electric vehicle eligible for the full £3,750 grant, a basic rate taxpayer would see a monthly grant benefit of £104 plus additional tax savings of £75, creating a total monthly advantage of £179.
Higher rate taxpayers benefit from the same £104 monthly grant benefit but with additional tax savings of £60, resulting in a total monthly advantage of £164. These calculations demonstrate why electric car salary sacrifice combined with government grants represents the most cost-effective route to electric vehicle ownership.
Grant-Eligible Vehicles Through The Electric Car Scheme
The Electric Car Scheme continuously monitors the OZEV grant portal to ensure all vehicle pricing reflects current grant eligibility.
The Dacia Spring stands out as exceptional value, starting at £15,995 and reducing to £12,245 with the £3,750 grant, making it available through salary sacrifice from just £128 monthly and perfect for urban commuting.
The Renault 5 E-Tech offers stylish city driving with modern technology, starting at £22,995 and reducing to £19,245 with the full grant, available through salary sacrifice from £198 monthly.
For families requiring more space, the MG4 EV provides excellent range and practicality, starting at £26,995 and reducing to £23,245 with the grant, available from £245 monthly through salary sacrifice.
Premium options under £37,000 include the Mini Cooper Electric, starting at £30,900 and reducing to £27,150 with the grant, perfect for premium urban mobility with iconic styling and available from £285 monthly.
The Hyundai Kona Electric offers compact SUV versatility with advanced features, starting at £34,195 and reducing to £30,445 with the grant, available from £320 monthly.
The Omoda E5 provides modern crossover styling with competitive pricing, starting at £33,055 and reducing to £29,305 with the grant, available from £305 monthly.
Application Process and Timeline
Understanding the grant application process helps explain when vehicles become available and how pricing is determined. Manufacturers must email ECGApplications@ozev.gov.uk for reference numbers before submitting complete technical and environmental evidence for review by the Vehicle Certification Agency and OZEV, with approximately 1-month processing time once all documents are submitted.
Once approved, vehicles appear on the OZEV grant portal and grants are applied automatically at point of sale through participating dealers. For salary sacrifice users, this means real-time updates where vehicle eligibility changes are promptly factored into vehicle pricing, without additional paperwork for employees.
The Electric Car Scheme monitors these updates continuously, ensuring our vehicle listings always reflect current grant status and pricing, supporting employees who want to understand how reliable electric cars are and helping employers evaluate good reasons to lease an electric car.
Science Based Targets and Environmental Integrity
The requirement for manufacturers to hold verified Science Based Targets represents a significant shift towards environmental accountability in automotive manufacturing. These targets are emissions reduction commitments aligned with climate science, requiring third-party assessment and covering the entire production process rather than just vehicle emissions. This ensures that grant recipients demonstrate genuine environmental leadership, supporting companies whose green initiatives align with corporate sustainability goals.
For salary sacrifice users, this requirement provides future-proofing as vehicles from committed manufacturers are likely to retain value better, corporate alignment that supports employer sustainability objectives, grant security through manufacturers meeting standards for full £3,750 grants, and environmental integrity that ensures genuine rather than superficial green credentials.
Maximising Your Savings with The Electric Car Scheme
The Electric Car Scheme's approach to grant integration ensures salary sacrifice users receive maximum benefit from government support while accessing our award-winning service. All vehicle pricing automatically reflects current grant eligibility through real-time monitoring of the OZEV portal, supported by specialist advice on maximising combined savings and complete employer protection that remains unaffected by grant changes.
Beyond grant savings, The Electric Car Scheme offers The Charge Scheme for salary sacrifice EV charging costs, Complete Employer Protection that safeguards businesses from unexpected costs, 5-star service with award-winning customer support, and comprehensive packages including insurance, maintenance, and breakdown cover. These combined benefits often result in electric vehicles costing less than equivalent petrol cars through traditional financing methods.
Combined savings include vehicle cost reduction of up to £3,750 through government grants, monthly tax benefits of 20-50% through salary sacrifice, additional charging savings through The Charge Scheme, comprehensive insurance benefits, and full maintenance savings through complete service packages. Understanding what happens to old electric car batteries and accessing fast charging at home further enhances the value proposition.
Why Choose The Electric Car Scheme for Grant-Eligible Vehicles
The Electric Car Scheme ensures you receive the full benefit of government grants alongside salary sacrifice savings. We keep our pricing up to date as vehicles gain grant eligibility, pass all savings directly to you, and ensure companies and drivers access the maximum benefits available through salary sacrifice schemes.
Our award-winning service includes consistently excellent user experience with 5-star customer ratings, Complete Employer Protection providing comprehensive business safeguards, flexible options covering new, used, and subscription vehicle availability, and transparent pricing with clear breakdown of all costs and savings. This supports employees exploring why they should make the switch and employers considering why investing in green benefits matters for businesses.
Getting Started with Grant-Eligible Electric Vehicles
Beginning your journey towards electric vehicle ownership through salary sacrifice with government grant support involves straightforward steps. Employees should check eligibility to ensure their employer offers The Electric Car Scheme, browse grant-eligible options under £37,000, calculate savings using our tools to understand total benefits, and complete the simple online application process with full support.
Employers can book demonstrations to understand scheme benefits for their organisation, review packages including Complete Employer Protection, implement quick setup with zero upfront costs, launch by promoting grant-eligible vehicles to employees, and monitor success by tracking uptake and employee satisfaction.
Unprecedented Electric Vehicle Affordability
The combination of government grants up to £3,750 and salary sacrifice schemes offering 20-50% savings creates unprecedented opportunities for electric vehicle adoption. With the 3% Benefit-in-Kind rate for electric vehicles, UK drivers can access premium electric cars at costs often lower than equivalent petrol vehicles.
The Electric Car Scheme's comprehensive approach ensures you maximise every available saving while accessing award-winning service and complete employer protection. As the leading electric car salary sacrifice provider in the UK, we're committed to making electric vehicle ownership accessible, affordable, and straightforward.
Ready to explore your options? Whether you're an employee seeking maximum savings or an employer looking to enhance your benefits package, The Electric Car Scheme provides the expertise and support needed to navigate this exciting opportunity.
For Employers: Book a demo to discover how grant-eligible vehicles can enhance your employee benefits package while supporting sustainability goals.
For Employees: Get an instant quote to see how much you could save on grant-eligible electric vehicles through salary sacrifice.
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Last updated: 09/07/25
Our pricing is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; 10,000 miles pa, 36 months, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme’s terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The above prices were calculated using a flat payment profile. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
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