Volkswagen ID.4 and ID.5 Electric Car Grant: Even Better Value Through Salary Sacrifice

Source: Volkswagen News Room

Key Insights

• The Volkswagen ID.4 and ID.5 have qualified for the £1,500 Electric Car Grant, recognising Volkswagen's commitment to environmental standards and reducing entry prices to £35,495.
• When combined with electric car salary sacrifice schemes, the grant makes switching to an EV more attractive than ever, with employees saving 20-50% through pre-tax salary deductions and the current 3% Benefit-in-Kind rate.
• The Electric Car Scheme enables employees to maximise these government incentives whilst accessing comprehensive packages including maintenance, insurance and charging solutions at significantly reduced monthly costs.

The Volkswagen ID.4 and ID.5 have joined the growing list of electric vehicles qualifying for the UK Government's Electric Car Grant, demonstrating Volkswagen's commitment to environmental excellence whilst making these popular EVs even more accessible through electric car salary sacrifice schemes.

The Electric Car Grant: Rewarding Environmental Excellence

The UK Government's Electric Car Grant of up to £3,750 was introduced in June 2025 to accelerate EV adoption by rewarding manufacturers who meet the highest environmental and sustainability standards. This initiative recognises automakers investing in cleaner production methods and lower-emission vehicles.

The newly eligible Volkswagen models now benefit from the £1,500 grant tier, reflecting their strong environmental credentials:

• ID.4 Pure Essential – 52 kWh, 170 PS, five-door

• ID.4 Pure Match – 52 kWh, 170 PS, five-door

• ID.4 Pro Essential – 77 kWh, 286 PS, five-door

• ID.5 Pure Match – 52 kWh, 170 PS, five-door

• ID.5 Pro Essential – 77 kWh, 286 PS, five-door

With the grant applied, the entry-level price drops to £35,495, joining the Volkswagen ID.3 in making electric motoring more attainable for UK drivers.

Combining Government Support with Salary Sacrifice Savings

The Electric Car Grant creates an excellent foundation, but when combined with salary sacrifice electric car schemes, the savings become truly remarkable. Through The Electric Car Scheme, drivers can save 20-50% on any electric car compared to traditional leasing or purchasing.

The scheme works by allowing employees to pay for their EV through gross salary before tax is deducted. Combined with the current 3% Benefit-in-Kind rate for electric vehicles in 2025/26, this creates substantial monthly savings that complement the government grant perfectly.

For employees, this dual benefit approach makes switching to an electric car through The Electric Car Scheme more appealing than ever. Whilst the £1,500 grant reduces the vehicle's base cost, salary sacrifice delivers ongoing monthly savings throughout the lease term, often amounting to thousands of pounds over three years.

The Growing Momentum Behind EV Adoption

The grant's introduction has contributed to impressive EV uptake, with September 2025 seeing 72,000 electric vehicle registrations. This demonstrates the UK's accelerating transition towards sustainable transport, supported by both government initiatives and innovative company electric car schemes.

With 38 electric cars now eligible for the grant, drivers have unprecedented choice when selecting their next vehicle. The inclusion of popular models like the Volkswagen ID.4 and ID.5 makes the switch to electric motoring accessible for families, professionals and business users alike.

Current market conditions further enhance value, with competitive dealer pricing complementing both the government grant and salary sacrifice savings. This creates multiple opportunities for drivers to secure exceptional deals on Volkswagen electric cars.

Maximising Your EV Savings Through The Electric Car Scheme

For employees considering a Volkswagen electric car through salary sacrifice, the combination of the government grant, tax savings and reduced National Insurance contributions creates outstanding value. The Electric Car Scheme also includes Complete Employer Protection and options to add home charging installation and The Charge Scheme for additional savings on charging costs.

These comprehensive packages mean employees benefit from reduced monthly payments whilst enjoying fully maintained, insured vehicles with breakdown cover included. The government grant further sweetens this arrangement, recognising manufacturers committed to environmental standards whilst making electric car salary sacrifice even more compelling.

To explore how much you could save on a Volkswagen ID.4, ID.5 or any other electric car through The Electric Car Scheme, use our salary sacrifice calculator to see your personalised savings based on your salary and tax bracket. With government support and innovative workplace schemes working together, there's never been a better time to make the switch to electric.

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Last updated: 16/10/2025

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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