Going green with grants: Your guide to electric car government grants
Today’s evolving landscape of environmental awareness and climate action places electric cars at the forefront of this change. Making the switch from a petrol or diesel car to an electric car is one of the fastest ways to reduce your carbon footprint.
Governments across the world are actively encouraging more people to purchase electric cars by implementing measures to make them cheaper and more accessible. This guide specifically explores the UK government grants available for electric cars and delves into how salary sacrifice can render electric cars more affordable.
The government’s tax incentives for electric cars promote sustainable choices, but some can be complex and difficult to access. The Electric Car Scheme makes it simple to access the government tax incentives for our net zero transition. So, we will also briefly explain what electric car salary sacrifice is and how it can save you up to 60% on any electric car with The Electric Car Scheme.
How do government grants work?
Transport is currently the largest emitting sector of the UK economy, responsible for 25% of total greenhouse gas emissions. Over half the UK’s transport emissions (52%) come from cars.
The UK government said they will stop selling petrol and diesel cars by 2030 (now, 2035) to promote electric vehicles. To support and encourage the uptake of electric cars, the government is offering grants:
Plug-in car grant
The plug-in car grant stood as one of the UK's initial substantial grants for electric cars. Its termination in 2022 for cars resulted from an unforeseen surge in public adoption of electric vehicles. This grant facilitated support for nearly half a million electric vehicles over a decade.
The Government website states that the Plug-in car grant played a significant role in boosting the sales of fully electric cars. Sales surged from fewer than 1,000 in 2011 to almost 100,000 within the first five months of 2022.
The Plug-in Grant is still running for the following types of electric vehicles, excluding cars:
Wheelchair accessible vehicles
Motorcycles and mopeds
Small and large vans
Small and large trucks
Taxis
You can learn more about which vehicles are eligible for the current plug-in car grant by clicking the link provided.
The Electric Vehicle (EV) Chargepoint Grant
The Electric Vehicle Chargepoint Grant, also recognized as the Electric Vehicle Homecharge Scheme, serves as an additional government grant aimed at encouraging more individuals to transition to electric vehicles, especially those residing in rented accommodation. Eligible applicants can receive either £350 or a 75% discount on the cost of purchasing and installing a socket, depending on whichever amount is lower. Charging your car at home proves to be incredibly convenient; all you need to do is plug your car in after driving, and you can rest assured that it will be fully charged by the morning.
To qualify, you must:
Own a property or live in rented accommodation
Check if your car is eligible by checking the government website
Get an approved charger and installer
Be the car’s primary owner
Have dedicated off-street parking at your property
Your parking space must have a parking space that is:
Off-street, private and clearly defined - it does not have to be part of the property
Accessible to you at all times
You own or have the legal right to - you may need to provide Land Registry title deeds as evidence
After making sure you qualify for the grant, the next step is choosing a charger and getting it installed.
As of April 2023, this grant has helped install 2,347 charging points since the program started in April 2022. Prior programs, like the Electric Vehicle Home Scheme and the Domestic Recharge Scheme, have provided 380,108 home charging units since 2013.
On-street Residential Chargepoint Scheme (ORCS)
This program allows local authorities to request funds for installing electric car chargers on residential streets. This is helpful for people who do not have private parking but still need access to an EV charger.
The scheme has received an allocation of £15 million for the current financial year (2023/24) to expand the infrastructure.
Since its introduction in 2017, there have been 4,235 public charging devices installed as of April 2023. They have also provided funding for the installation of an additional 13,986 ORCS charging devices in the future.
Workplace Charging Scheme (WCS)
The Workplace Charging scheme is a voucher-based scheme for businesses for electric car charger installation. You can get up to 75% of the cost covered. Each applicant can have up to 40 sockets across all locations and there is a maximum of £350 for each socket.
After your successful application, you will ll receive an identification voucher code via email. You can give this code to any charge point installer authorised by OZEV.
Once the charge points are in place, the installer can apply for the grant on behalf of the applicant with OZEV.
Where could the government improve?
Overall, the UK government has actively supported the provision of grants and incentives to aid individuals in transitioning to electric vehicles. However, there are still opportunities for further improvement or development.
More consistent policies
Government policies vary due to shifting political priorities, industry influence and regional disparities which can lead to inconsistencies. Earlier this year, local authorities considered the introduction of the On-Street Residential Chargepoint Scheme inconsistent among various councils.
In September 2023, Prime Minister Rishi Sunak announced the ban on pure petrol and diesel cars has been pushed back from 2030 to 2035. This decision is said to be “pragmatic, proportionate and realistic,” easing the burden on people during the cost of living crisis. The delay to 2035 caught many by surprise and was not entirely well received. Many were initially concerned that the changes would end up costing consumers more and ultimately mean the UK is more dependent on fossil fuels.
Make grants more accessible
Ensuring government grants and incentives benefit people of all income levels can still be a challenge. Some may still find electric cars out of reach because EVs can have a higher upfront cost compared to petrol cars.
Expanding the charging infrastructure further
Continued investment into the UK charging infrastructure is important for the future of electric cars. EV owners need to have access to charging points across the UK.
More used EV support
Government incentives, like the Plug-In Grant, primarily target new electric cars. In the near future, we might see a broader plan that includes support for used electric cars. This could make electric cars even more accessible for the average person.
Where does electric car salary sacrifice fit into this?
The UK government introduced electric car salary sacrifice to help drivers access better savings on their personal journeys to net zero. This is an employee benefit where a company is able to lease an electric car on their employee's behalf. On a typical lease, the employee would pay with their net salary (salary after tax). Salary sacrifice allows the employee to deduce this from their gross salary (before tax) to allow them access to bigger savings.
Salary sacrifice is currently the most affordable way for anyone to get an electric car.
You save on both income tax and national insurance contributions due to the salary you have “sacrificed”.
If you choose to salary sacrifice the MG4 Hatchback your monthly cost will be £256. The Electric Car Scheme ensures you get the best lease deal available, which is currently £397 per month as of this blog. This means you save £167 on taxes and insurance, but you will need to pay £25 in BIK tax. This is unquestionably the most affordable way to get a MG4, and it will stay that way as long as BIK rates remain extremely low.
This is the same for the Hyundai Ioniq 6, where you would pay £398 each month and save £256 in income tax and national insurance savings.
With The Electric Car Scheme, you can include a home charge point with your car and save 30-60% through salary sacrifice. We have partnered with Smart Home Charge, a leading independent retailer and installer for home chargers. Following a review of the market, The Electric Car Scheme offer the Easee One as the charger to include with your car if you need one. Learn more about adding a home charger to your package here.
Making EVs more affordable
Salary sacrifice saves 30-60% on the cost of any electric car by paying from salary before tax. Affordable electric cars and clear sustainable options can motivate more people to speed up the shift towards net zero.
Lower maintenance and running costs
At The Electric Car Scheme, we offer unrivalled protection to give peace of mind to you and your team. Companies and employees shouldn't have to worry about extra fees if their electric car needs to be returned early due to unforeseen circumstances.
Corporate social responsibility goals
Businesses promoting electric cars reduce their environmental impact. It also improves air quality and demonstrates their commitment to being eco-friendly leaders. This aligns with CSR objectives related to sustainability and employee engagement. When businesses are trying to have a more positive impact on the environment, salary sacrifice is a powerful tool.
Make the switch from petrol to electric with The Electric Car Scheme.
Employers set up the scheme as an employee benefit at no cost to the business. At The Electric Car Scheme, we provide market-leading protection to safeguard from unexpected costs because of unforeseen circumstances.
Learn more about The Electric Car Scheme and how it works here.
Note: Pricing shown 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, £70,000 salary per annum and are inclusive of Maintenance and Breakdown Cover.
Last updated: 28/12/23
