Motorists will be handed grants of up to £3,750 to switch to electric cars as ministers fear their net zero targets risk falling behind schedule.
The offer will apply to new EVs with a list price of under £37,000 and will be tiered from £1,500 so the biggest discounts will be for models with the strongest green credentials.
China-built EVs such as BYDs, which are already among the cheapest on the market, are likely to be excluded, sources said.
Manufacturers will recoup the money from a £650 million pot set aside by Treasury. The Electric Car Grant scheme is due to run until 2029.
“This EV grant will not only allow people to keep more of their hard-earned money — it’ll help our automotive sector seize one of the biggest opportunities of the 21st century,” Heidi Alexander, the transport secretary, said. “And with over 82,000 public chargepoints now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”
The £37,000 cap means that almost half of all new electric vehicles will be eligible, according to Electrifying.com, the EV news site, including versions of the Mini Countryman E, Citroen ë-C4 and Skoda Elroq.
A range of popular models, including Tesla, Polestar, BMWs, Audis and Mercedes will be excluded because they are priced above the threshold.
A previous subsidy on new EVs, between 2016 and 2018, helped kickstart demand for EVs. Motorists switching to pure-electric cars could claim £4,500 towards the purchase. It was reduced to £3,500 in October 2018. Grants for private EV buyers were gradually lowered before being scrapped altogether in 2022.
Sales have risen significantly, from just 15,474 pure-electric cars registered in 2018 to 381,970 last year, representing almost 20% of the new car market, ccording to the Society of Motor Manufacturers and Traders (SMMT).
However, the figures have been propped up by commercial fleet buyers with private buyers accounting for just one in five purchases of pure-electric cars.
Labour’s plans to ban the sale of new pure-petrol and diesel cars by 2030 achievable has been dilutedn to allow the sale of plug-in hybrids, which can be powered by a petrol or diesel engine and battery, until 2035.
The industry has been concerned by the penalties imposed for not selling the mandated targets ofj zero-emission vehicles. It is 28% this year, rising to 80% by 2030.
Among the biggest deterrents for motorists is the availability of charging facilities and whether EVs are fit for long journeys. The Department for Transport has earmarked £63m to bolster charging for motorists without driveways.
Ginny Buckley, the chief executive of Electrifying.com, said sales to private buyers “had stalled” in recent years. A survey of 11,000 UK drivers last November found that 76% were put off by upfront EV costs.
“Nearly one in two new electric models are now more affordable thanks to these long-overdue incentives,” she said. “Crucially, the support is aimed exactly where it’s needed most: from school-run staples to budget-friendly runarounds, the grants apply to cars that fit the needs of everyday drivers.”
Quentin Willson, founder of Faircharge said the change for private EV buyers was long overdue. “The independent EV sector has been ploughing a lonely furrow highlighting the advantages of EV ownership and countering the myriad of misinformation and myths,” he said. “We’re delighted to see that this government has listened and taken action.”
Howard Cox, the founder of FairFuelUK, which has campaigned against the proposed 2030 ban, said: ‘The government is hell bent on their net zero fantasy at all costs knowing full well that EVs are still not the majority of road users’ desired first choice. So they are now to spend more of our taxpayers’ cash on reducing the huge price of these rich man’s toys.”
Mike Hawes, the chief executive of the SMMT, said: “Today’s announcement of the return of government support for the purchase of electric vehicles is a clear signal to consumers that now is the time to switch.
“Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade.”
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