Electric Car Grant 2026: Complete Guide for Salary Sacrifice Schemes UK
Source: Shutterstock
The government's 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 ensures that only environmentally committed manufacturers benefit from the full government support, making the electric car scheme UK more accessible for budget-conscious buyers.
£1,500 Grant
Available for other qualifying electric vehicles
Still requires meeting all technical criteria
Provides substantial savings for families considering electric cars vs petrol cars
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 salary sacrifice electric car schemes even more attractive.
2026 Grant Updates & Changes
As we move into 2026, the Electric Car Grant continues to evolve, with several important updates affecting electric car scheme UK users:
Expanded Manufacturer Participation More manufacturers have achieved Science Based Targets certification, increasing the number of vehicles eligible for the full £3,750 grant. This benefits salary sacrifice electric car users by providing greater choice across all price points.
Streamlined Application Process The Vehicle Certification Agency has reduced processing times to approximately 2-3 weeks, meaning new models become grant-eligible faster. This ensures The Electric Car Scheme can update pricing quickly for company electric car scheme participants.
Integration with Workplace Benefits The grant now works seamlessly with the Workplace Charging Scheme, allowing employers to combine multiple incentives for maximum employee benefits.
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 commuting.
Why These Standards Matter for Salary Sacrifice Users
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. This directly addresses concerns about what happens to old electric car batteries and ensures how reliable are electric cars throughout your lease.
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
Maintaining high resale values that support long-term value
Electric Car Grant and Salary Sacrifice: Maximum Savings
The combination of government grants and electric car salary sacrifice schemes creates unprecedented opportunities for savings. Understanding how these benefits stack is essential for maximising your financial advantage.
How the Savings Stack Up
The grant impact on monthly payments is substantial:
£3,750 grant spread over a typical 36-month lease reduces monthly costs by £104
£1,500 grant provides a £42 monthly reduction
When combined with salary sacrifice tax benefits:
Typically deliver 20-50% savings through pre-tax deductions
3% Benefit-in-Kind rate for electric vehicles
Reduced National Insurance contributions
Real-World Savings Examples
For a £35,000 electric vehicle eligible for the full £3,750 grant:
Basic Rate Taxpayer:
Monthly grant benefit: £104
Additional tax savings: £75
Total monthly advantage: £179
Higher Rate Taxpayer:
Monthly grant benefit: £104
Additional tax savings: £60
Total monthly advantage: £164
These calculations demonstrate why salary sacrifice electric car schemes combined with government grants represent the most cost-effective route to electric vehicle ownership, often making EVs cheaper than petrol cars.
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.
Budget-Friendly Options
| Vehicle | RRP | After Grant | Monthly (Sal Sac) | Range | Category |
|---|---|---|---|---|---|
| Dacia Spring | £15,995 | £12,245 | From £128 | 140 miles | Urban commuting |
| Renault 5 E-Tech | £22,995 | £19,245 | From £198 | 248 miles | City driving |
| MG4 EV | £26,995 | £23,245 | From £245 | 281 miles | Family car |
Premium Options Under £37,000
| Vehicle | RRP | After Grant | Monthly (Sal Sac) | Range | Category |
|---|---|---|---|---|---|
| Mini Cooper Electric | £30,900 | £27,150 | From £285 | 186 miles | Premium urban |
| Hyundai Kona Electric | £34,195 | £30,445 | From £320 | 234 miles | Compact SUV |
| Omoda E5 | £33,055 | £29,305 | From £305 | 256 miles | Crossover styling |
Application Process and Timeline
Understanding the grant application process helps explain when vehicles become available and how pricing is determined through the electric car scheme.
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 2-3 weeks 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
No additional paperwork for employees
Seamless integration with employee benefits
The Electric Car Scheme monitors these updates continuously, ensuring our vehicle listings always reflect current grant status and pricing.
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.
For salary sacrifice electric car users, this requirement provides:
Future-proofing: Vehicles from committed manufacturers are likely to retain value better
Corporate alignment: Supports employer sustainability objectives
Grant security: Manufacturers meeting standards for full £3,750 grants
Environmental integrity: 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
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
Full maintenance savings through complete service packages
Understanding fast charging at home and EV charging costs further enhances the value proposition.
Electric Car Grant vs Previous Schemes
The 2026 Electric Car Grant differs significantly from previous government incentives:
Plug-in Car Grant (Ended 2022)
Required separate application
Grant paid after purchase
Maximum £2,500 for cars under £35,000
No environmental criteria for manufacturers
Current Electric Car Grant (2026)
Automatic application at dealership
Grant applied immediately at point of sale
Maximum £3,750 for environmentally committed manufacturers
Science Based Targets requirement ensures genuine sustainability
Plug-in Grant for Vans
Still running separately for commercial vehicles
Different eligibility criteria
Complements company electric car schemes for fleet users
Still available, offering up to £350 per charging socket
Works alongside Electric Car Grant
Supports workplace benefits packages
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 electric car 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
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
For Employees
Check eligibility: Ensure your employer offers The Electric Car Scheme
Browse grant-eligible options under £37,000
Calculate savings using our EV savings calculator tool
Complete the simple online application process with full support
For Employers
Book demonstrations to understand scheme benefits for your organisation
Review packages including Complete Employer Protection
Implement quick setup with zero upfront costs
Launch by promoting grant-eligible vehicles to employees
Monitor success by tracking uptake and employee satisfaction
Frequently Asked Questions
Is the Electric Car Grant still available in 2026?
Yes, the Electric Car Grant runs through to the 2028-29 financial year, providing up to £3,750 off qualifying electric vehicles through the electric car scheme UK.
Can I combine the grant with salary sacrifice?
Absolutely. Combining the government grant with electric car salary sacrifice delivers maximum savings of 20-50% plus the grant reduction, making EVs more affordable than ever.
What's the maximum grant amount in 2026?
£3,750 for vehicles from manufacturers with Science Based Targets. Other qualifying vehicles receive £1,500 through company electric car schemes.
Do I need to apply separately for the grant?
No, the grant is automatically applied at participating dealerships when you lease an electric car through salary sacrifice electric car schemes.
How much can I save with the 2026 Electric Car Grant?
Basic rate taxpayers typically save £179 monthly combining the £3,750 grant with salary sacrifice tax benefits. Higher rate taxpayers save £164 monthly.
Which electric cars qualify for the full £3,750 grant?
Vehicles under £37,000 from manufacturers with verified Science Based Targets qualify. See our full list of grant-eligible vehicles.
Can higher rate taxpayers benefit from the grant?
Yes, higher rate taxpayers combine the grant with enhanced salary sacrifice savings through their higher tax bracket, typically saving £164 monthly on eligible vehicles.
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 electric car schemes.
Are you an employer?
BOOK A DEMOAre you an employee?
SEE AVAILABLE CARSEcs Business Toolkit
Electrify Your Fleet: Tools and Guides to Help Your Business Get Started
-
How the Scheme WorksFind out how salary sacrifice can work for you or your business.
-
Complete Employer ProtectionAll employers and drivers are protected from day 1.
-
Our ImpactWe are an award-winning B Corp - find out about how we do good.
-
Case StudiesJoin thousands of employers already offering The Electric Car Scheme.
You might also like…
Last updated: 01/12/25
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.
Copyright and Image Usage: All images used on this website are either licensed for commercial use or used with express permission from the copyright holders, in compliance with UK and EU copyright law. We are committed to respecting intellectual property rights and maintaining full compliance with applicable regulations. If you have any questions or concerns regarding image usage or copyright matters, please contact us at marketing@electriccarscheme.com and we will address them promptly.
