Electric Car Grant 2026: Save Up to £3,750 + 20–50% with Salary Sacrifice (UK)
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The UK's Electric Car Grant is the most significant EV purchase incentive since the original Plug-in Car Grant ended in 2022. Combined with electric car salary sacrifice, it is the cheapest way for a UK employee to drive a new EV in 2026. This guide walks through how the grant works, which 45 cars qualify today, what the typical monthly cost looks like through The Electric Car Scheme, and how the 2026/27 4% Benefit-in-Kind rate fits into the maths.
What is the Electric Car Grant?
The Electric Car Grant (ECG) is a £650 million government scheme that launched on 16 July 2025 and runs through to the 2028–29 financial year, with the November 2025 Autumn Budget adding a further £1.3 billion of funding to extend support into 2026 and 2027. It is operated by the Office for Zero Emission Vehicles and applied as an automatic discount at the point of sale, so you do not need to apply for it yourself. The seller (or the salary sacrifice provider) handles the paperwork and passes the discount through to the headline price of the car.
The grant operates as a two-tier system tied to manufacturer sustainability standards. Band 1 cars receive £3,750 off; Band 2 cars receive £1,500. To qualify for either band, a vehicle must be an M1 passenger car producing 0gCO₂/km at the tailpipe, with a minimum 100-mile WLTP range, an 8-year (or 100,000-mile) battery warranty and a 3-year (or 60,000-mile) general warranty. The recommended retail price must be £37,000 or under, although a £42,000 price cap covers higher-spec variants of the same model line. Manufacturers must also hold verified Science Based Targets for emissions reduction across Scope 1, 2 and 3, with full validation required for Band 1 and an approved commitment with interim milestones for Band 2.
A useful sanity check: any provider claiming that combining the grant and salary sacrifice cuts costs by 60% or more is folding the employer's National Insurance saving into the employee's headline figure. The realistic employee saving from salary sacrifice is 20–50%, driven by your marginal Income Tax rate and the 8% employee NIC the sacrifice avoids. The grant sits on top of that and reduces the underlying lease cost.
How the grant works alongside salary sacrifice
Salary sacrifice is a formal contract variation in which an employee gives up a portion of gross pay in exchange for a non-cash benefit, in this case the use of an electric car leased by the employer. Income Tax and employee National Insurance are calculated on the lower salary, so the cost of the lease is met from pre-tax earnings rather than post-tax take-home. For pure EVs, Benefit-in-Kind is charged at just 4% of the car's P11D value in the 2026/27 tax year, rising one percentage point a year to 9% in 2029/30. That small BiK charge is the only tax giveback against an otherwise tax-free benefit, which is why the headline employee saving lands in the 20–50% range.
The Electric Car Grant fits cleanly into this structure because the £3,750 (or £1,500) is taken off the vehicle price before the lease is calculated. The full saving lands in the monthly cost, not as a one-off cash payment. Spread over a typical 36-month lease, the £3,750 grant reduces the headline monthly figure by roughly £104; the £1,500 grant by roughly £42. Both reductions then flow through into a lower amount of salary that gets sacrificed each month, which compounds the tax savings on top.
For a higher-rate taxpayer on a £35,000 Band 1 car, that means roughly a £104 grant benefit plus £75 to £90 of additional monthly tax saving from salary sacrifice, giving an effective monthly advantage of around £180 to £190 against the same car bought through a personal contract hire deal. The exact figure depends on your tax band, residency (Scotland's rates differ), lease term and mileage, which is why we always recommend running your own numbers through the salary sacrifice calculator.
Eligibility: which cars qualify in 2026
There are 45 EV models confirmed eligible for the Electric Car Grant on the official OZEV list at the time of writing: nine in Band 1 (the £3,750 grant) and 36 in Band 2 (£1,500). The list is updated as manufacturers complete certification with the Vehicle Certification Agency, which has reduced processing time to roughly two to three weeks.
Notable recent additions include the Nissan LEAF and Nissan Micra (52kWh) entering Band 1 in February 2026; the Renault 4, Renault 5 (52kWh), Renault Alpine A290 and MINI Countryman Electric joining Band 1 in December 2025; the Citroën ë-C5 Aircross Long Range in November 2025; the Ford Puma Gen-E upgraded from Band 2 to Band 1 in September 2025; and the Toyota C-HR+ joining Band 2 in January 2026. Several Volkswagen ID.4 variants, including the 77kWh Pro Essential, were added to Band 2 in October 2025. The full picture is genuinely fluid. Manufacturers without verified Science Based Targets (Smart, MG, Tesla and several Chinese-owned brands at the time of writing) sit outside the scheme, although some operate their own manufacturer-funded discounts.
Full eligible-vehicle list (with The Electric Car Scheme monthly pricing)
The table below mirrors the official OZEV list and adds two columns: the post-grant price after the £3,750 or £1,500 discount, and an indicative monthly cost through The Electric Car Scheme based on a 36-month, 10,000-mile per annum lease for a 40% (higher-rate) taxpayer in England & Wales. Indicative monthly figures are starting prices and include maintenance and breakdown cover; the actual quote depends on trim, term, mileage, tax band and credit. For a live figure on any specific car, use the instant quote tool.
Band 1: £3,750 grant
| Vehicle | RRP from | After grant | ECS sal-sac from /mo |
|---|---|---|---|
| Citroën ë-C5 Aircross Long Range | £39,000 | £35,250 | £370 |
| Ford E-Tourneo Courier | £33,690 | £29,940 | £315 |
| Ford Puma Gen-E | £29,995 | £26,245 | £275 |
| MINI Countryman Electric | £41,995 | £38,245 | £400 |
| Nissan LEAF | £28,995 | £25,245 | £265 |
| Nissan Micra (52kWh) | £25,995 | £22,245 | £235 |
| Renault 4 | £26,995 | £23,245 | £245 |
| Renault 5 (52kWh) | £22,995 | £19,245 | £198 |
| Renault Alpine A290 | £33,500 | £29,750 | £310 |
All eligible Band 2 (£1,500) cars can be found in the appendix at the bottom of this page.
Indicative pricing assumptions: 40% taxpayer in England & Wales, 36-month lease, 10,000 miles/year, flat payment profile, inclusive of maintenance and breakdown cover. Last updated May 2026; live pricing is generated from the ECS quote tool.
Worked example: Renault 5 E-Tech (52kWh), Band 1
A £22,995 Renault 5 E-Tech 52kWh sits in Band 1. The £3,750 grant takes the headline price down to £19,245 before the lease is structured. Through The Electric Car Scheme, a 40% taxpayer on a 36-month, 10,000-mile lease pays from £198 a month, all-inclusive. That is the net figure after Income Tax, employee National Insurance and the 4% Benefit-in-Kind charge for the 2026/27 tax year. Strip out the grant entirely and the same lease would cost closer to £235 a month; strip out salary sacrifice as well and a comparable personal contract hire would land near £305 a month with maintenance added in. The combined saving is real and measurable, and it is delivered without any upfront deposit or balloon payment.
Wider EV incentives: chargepoints, workplaces and infrastructure
The Electric Car Grant is the headline scheme, but it is not the only government incentive worth knowing about. Several smaller grants still run alongside it and are relevant if you are planning to charge at home, at work or in a residential block.
The Electric Vehicle Chargepoint Grant provides up to £350 per socket for flat owners and renters, and a separate strand offers up to £350 per socket to residential landlords and up to £30,000 to residential car park operators. All three close to new applications on 31 March 2026, so it is worth getting in early if you do not have on-street parking and rely on a flat or rented property. The Workplace Charging Scheme remains open on an ongoing basis and gives businesses, charities and public-sector organisations up to £350 per socket (capped at 40 sockets per site) towards workplace EV chargers, a natural fit for companies running a salary sacrifice scheme and wanting to support the cars they have just put on the road.
The November 2025 Autumn Budget added £200 million for public charging infrastructure expansion alongside the £1.3 billion grant top-up, and the LEVI fund continues to channel capital and capability funding into local authorities deploying on-street and low-power charging in England. Across these schemes, the cumulative picture is genuinely supportive: the most expensive bits of EV ownership, the car itself and the home or workplace charger, both have a public-sector subsidy attached.
For the running cost of charging itself, The Charge Scheme lets employees salary-sacrifice their EV charging costs at home, at the workplace or in public, delivering the same 20–50% saving on charging that salary sacrifice gives them on the car.
What about vehicle tax, BiK and other 2026/27 tax changes?
The Electric Car Grant sits alongside a tax regime that still favours pure EVs heavily, even after the changes that came into force on 1 April 2025. Zero-emission cars now pay a £10 first-year Vehicle Excise Duty rate until 2029–30, with the standard £195 annual rate kicking in from year two; the headline VED exemption that EVs previously enjoyed has gone, but the cost differential against petrol and diesel remains comfortably in favour of EVs across a typical lease.
Benefit-in-Kind is where the salary sacrifice maths really pulls away from any other route to a company car. The BiK rate for pure EVs is 4% of P11D value for the 2026/27 tax year, rising by one percentage point a year to 5% in 2027/28, 7% in 2028/29 (a two-point jump confirmed at the November 2025 Budget) and 9% in 2029/30. Hybrids and plug-in hybrids face steeper rises, hitting 18–19% by 2029/30, and petrol or diesel company cars top out at 39%. For employers running a company electric car scheme, that gap is what makes salary sacrifice on EVs a genuinely tax-efficient employee benefit rather than a marketing gimmick.
Employer Class 1 secondary National Insurance has been at 15% since April 2025 (up from 13.8%), with the secondary threshold cut from £9,100 to £5,000. That has made salary sacrifice more, not less, valuable to employers, because every pound sacrificed avoids 15p of employer NIC on top of the employee's own saving. We covered the mechanics in Employer NIC just went up: how EV salary sacrifice offsets the 2025/26 hike.
How The Electric Car Scheme handles grant-eligible cars
Three things matter when you are choosing a salary sacrifice provider for a grant-eligible EV: how the grant flows through into the price you actually pay, what happens if your circumstances change mid-lease, and whether the provider can put the car on the road quickly. We address each of them deliberately.
The grant flows through in full. Every quote on the instant pricing engine reflects current OZEV grant eligibility on the day, with Band 1 and Band 2 vehicles priced against the discounted invoice cost rather than the headline RRP. Because The Electric Car Scheme is a multi-funder provider, pricing across several UK leasing partners rather than a single funder, competing quotes get tighter as the underlying lease cost drops, so the saving lands with the employee.
Complete Employer Protection covers the "what if my circumstances change" question from Day 1 of the lease. There is no exclusion period, no excess and no carve-out: the protection extends to resignation, redundancy, illness, parental leave, family death and accidental damage above the insurance excess. That matters because most competitors operate a 3-month exclusion at the start of a lease, which leaves both the employee and the employer exposed during the period when change is most disruptive.
Speed of delivery and breadth of stock close the gap on the most common objection, the "I want an EV but I want it now" problem. The Electric Car Scheme runs salary sacrifice on both new and used EVs, with used cars often delivered inside 14 days, and runs at £0 set-up cost to the employer.
Enterprise customers using the scheme today include Holland & Barrett, Leeds Bradford Airport, Millwall FC, TopCashback and Time Out Group PLC. The scheme was named Best Salary Sacrifice Broker 2026 by Broker News Awards, Best Salary Sacrifice Provider by Car Sloth in 2024 and 2025, and EV Salary Sacrifice Provider of the Year 2026 by SME News, with a 4.9-star Trustpilot rating across more than 1,000 reviews.
Frequently asked questions
Do I need to apply for the Electric Car Grant?
No. The grant is applied automatically as a discount at the dealer when you purchase or lease an eligible car. For salary sacrifice users, the discount is built into the lease cost before the monthly figure is calculated, so the saving flows through to take-home pay without any paperwork on your side.
Can I claim the grant and use salary sacrifice on the same car?
Yes. The grant reduces the underlying vehicle price; salary sacrifice then runs against that lower lease cost. The combined effect is the £3,750 (or £1,500) discount plus 20–50% off the remaining lease through Income Tax and National Insurance savings, less the 4% BiK charge in 2026/27.
What's the maximum saving I can claim?
The grant maximum is £3,750 (Band 1). The salary sacrifice saving on top is capped by your marginal tax rate and NI position: typically 28% for a basic-rate taxpayer (20% Income Tax plus 8% NIC), 42% for a higher-rate taxpayer (40% plus 2% NIC), and around 47% for an additional-rate taxpayer earning above £125,140. Any provider quoting an employee saving above 50% is including the employer's NIC saving in the headline figure; the employee's saving is 20–50%.
Which manufacturers are not in the scheme?
At the time of writing, several brands sit outside the grant because they do not yet have verified Science Based Targets. Smart, MG, Tesla, Fiat, Alfa Romeo, Jeep, Abarth and Volvo (for the EX30 specifically) are the notable absences. The list updates as manufacturers complete certification; the official OZEV list is the authoritative source.
Does the grant work on used EVs?
The Electric Car Grant applies to new cars only. For used EVs through salary sacrifice, the saving comes entirely from the Income Tax and NIC relief on the sacrificed salary, typically still a 20–50% advantage against personal contract hire on the same car.
How long will the grant last?
OZEV funding currently runs to the 2028–29 financial year, with the November 2025 Budget extending the underlying grant pool through 2026 and 2027 with an additional £1.3 billion. The scheme can close earlier if funds are exhausted, so it pays to act sooner rather than later if you have a Band 1 car in mind.
What about cars over £37,000?
A vehicle's headline RRP must be £37,000 or under for any trim to be grant-eligible. Higher-spec variants of an already-eligible model line can still receive the discount up to a £42,000 price cap. Above that, the grant does not apply, but salary sacrifice still delivers the 20–50% saving on the lease.
The bottom line
For UK employees and employers, the combination of a £3,750 Electric Car Grant and a properly run electric car salary sacrifice scheme is the cheapest way to drive a new EV in 2026. The grant flows through to monthly cost rather than appearing as a one-off rebate, the 4% Benefit-in-Kind rate keeps the only tax giveback small, and the underlying 20–50% saving from Income Tax and National Insurance relief sits on top. With 45 cars confirmed eligible, from the £198-a-month Renault 5 to family-sized options like the Volkswagen ID.4 and Skoda Enyaq, there is a grant-eligible EV at every realistic price point.
For employees who want to see what the numbers actually look like for them, run an instant quote on any car in the table above. For employers considering whether to roll out a scheme, book a demo and we will walk through the cost and admin model in 30 minutes.
Appendix: Band 2: £1,500 grant (full list)
| Vehicle | RRP from | After grant | ECS sal-sac from /mo |
|---|---|---|---|
| Citroën ë-C3 / ë-C3 Aircross / ë-C3 Urban Range | £21,990 | £20,490 | £215 |
| Citroën ë-C4 / ë-C4 X | £27,990 | £26,490 | £280 |
| Citroën ë-C5 Aircross (Comfort Range) | £36,750 | £35,250 | £370 |
| Citroën ë-Berlingo | £33,500 | £32,000 | £335 |
| Citroën ë-SpaceTourer | £42,000 | £40,500 | £425 |
| Cupra Born | £36,490 | £34,990 | £370 |
| DS DS3 | £35,400 | £33,900 | £355 |
| DS N°4 | £36,500 | £35,000 | £370 |
| Hyundai KONA Electric | £34,195 | £32,695 | £320 |
| Kia EV3 | £32,995 | £31,495 | £330 |
| Kia EV4 | £34,995 | £33,495 | £350 |
| Kia PV5 Passenger | £36,000 | £34,500 | £365 |
| Nissan Ariya | £39,645 | £38,145 | £395 |
| Nissan Micra (40kWh) | £22,995 | £21,495 | £225 |
| Peugeot E-208 | £29,995 | £28,495 | £300 |
| Peugeot E-2008 | £33,300 | £31,800 | £330 |
| Peugeot E-308 | £36,900 | £35,400 | £370 |
| Peugeot E-408 | £42,000 | £40,500 | £425 |
| Peugeot E-Rifter | £33,500 | £32,000 | £335 |
| Vehicle | RRP from | After grant | ECS sal-sac from /mo |
|---|---|---|---|
| Peugeot E-Traveller | £42,000 | £40,500 | £425 |
| Renault 5 (40kWh) | £20,995 | £19,495 | £205 |
| Renault Megane | £32,495 | £30,995 | £325 |
| Renault Scenic | £37,495 | £35,995 | £375 |
| Skoda Elroq | £31,510 | £30,010 | £315 |
| Skoda Enyaq | £39,010 | £37,510 | £395 |
| Toyota C-HR+ | £34,495 | £32,995 | £345 |
| Toyota Proace City Verso | £33,795 | £32,295 | £335 |
| Vauxhall Astra Electric | £33,445 | £31,945 | £335 |
| Vauxhall Combo Life Electric | £34,795 | £33,295 | £350 |
| Vauxhall Corsa Electric | £26,495 | £24,995 | £260 |
| Vauxhall Frontera Electric | £24,495 | £22,995 | £240 |
| Vauxhall Grandland Electric | £37,995 | £36,495 | £385 |
| Vauxhall Mokka Electric | £33,195 | £31,695 | £330 |
| Vauxhall Vivaro Life Electric | £42,000 | £40,500 | £425 |
| Volkswagen ID.3 | £33,295 | £31,795 | £335 |
| Volkswagen ID.4 | £36,950 | £35,450 | £370 |
| Volkswagen ID.5 | £40,990 | £39,490 | £415 |
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Last updated: 22/05/2026
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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