The UK Government has relaunched financial help for electric‑car buyers and leasers, unveiling a £650 million Electric Car Grant (ECG) worth up to £3,750 per vehicle. From 16 July 2025, any brand‑new battery‑electric car with a recommended retail price of £37,000 or less can qualify, provided the manufacturer meets strict sustainability standards. The grant is deducted at the point of sale, which means lower capital costs; and, crucially smaller monthly rentals on personal or business leases arranged through Rivervale.
Government Confirms the Details
The Department for Transport’s official release highlights three core objectives:
- Put money back in drivers’ pockets – up to £3,750 off a new EV, plus running‑cost savings of “up to £1,500 a year” versus a comparable petrol car.
- Back British manufacturing and jobs – only car makers that sign up to verified science‑based targets for carbon reduction may participate, rewarding greener supply chains.
- Accelerate the shift to zero‑emission vehicles – the scheme dovetails with the UK’s Zero Emission Vehicle (ZEV) mandate and the manifesto pledge to end pure petrol and diesel sales by 2030.
Transport Secretary Heidi Alexander called the ECG “our Plan for Change in action… backing British drivers, British jobs and British growth,” and pointed to a charging network that now tops 82,000 public charge‑points, adding one every 30 minutes.
How the Grant Works
| Key Rule | What It Means for You |
|---|---|
| Vehicle type | 100 % battery‑electric (no hybrids) |
| Price cap | ≤ £37,000 MRRP – targets mass‑market models, not luxury EVs |
| Maximum discount | £3,750 applied automatically at the dealership or via your leasing broker |
| Launch date | Manufacturers can submit applications from 16 July 2025; discounts show on invoices as soon as a model is approved |
| Funding window | Runs until the 2028/29 financial year or until the £650 million pot is exhausted |
| Green credentials | Makers must have validated Science Based Targets and keep production CO₂ below a threshold still to be disclosed |
Although some media outlets (including Autocar) mention a two‑band structure: Band One (up to £3,750) and Band Two (up to £1,500), the final banding tables are not yet published in the statutory guidance, so exact thresholds could change.
Key Facts
- 33 brand‑new models are already priced below £30,00, a price territory the new grant directly supports.
- 380,000 zero‑emission cars were registered in the UK last year, showing robust demand despite the cost barrier.
- Government investment in the wider EV transition totals £4.5 billion, including home‑charging support and a record £1.6 billion to fix potholes—good news whether you buy or lease.
- Is the grant really automatic? – Yes. Buyers and lessees do not fill out forms; the discount appears on the vehicle invoice once that model is on the approved list.
- Will UK‑built cars get extra money? – No. The scheme is technology‑neutral: every model meets the same CO₂ scorecard regardless of where it is built.
- Could the grant run out early? – Possibly. With roughly 173,000 full‑rate grants available, high demand could drain funds sooner than 2028/29. Early orders are smart orders.
What This Means for Rivervale Customers Leasing a New Car
When you lease, your monthly payment is calculated from the car’s capitalised cost minus predicted residual value. Because the ECG reduces that capitalised cost up front, monthly rentals typically fall by £35–£50 on a mainstream hatchback or compact SUV, sometimes more on longer‑term or low‑mileage deals. Add in ongoing 2 % Benefit‑in‑Kind (BiK) for company‑car drivers, and a Rivervale EV lease can now be cheaper than the equivalent petrol model once fuel savings are counted.
Rivervale’s Added Value
- Grant‑ready quotes: We integrate the ECG discount automatically so you can see pricing in black and white.
- Real‑time stock search: Our team monitors the DfT approval list daily to source the quickest‑delivery cars that already qualify.
- Transparent alternatives: If your chosen trim sits just above £37k, we’ll suggest near‑identical versions that do qualify, keeping you inside budget without compromise.
- End‑to‑end paperwork: From the manufacturer’s grant verification to DVLA registration, Rivervale handles it all so your handover is seamless.
Frequently Asked Questions
- Are leased cars definitely eligible? Yes. The grant applies to any qualifying new‑car transaction, whether outright purchase, PCP, PCH or business contract hire.
- Does the grant affect residual values? Typically no: used‑car prices are driven by market demand, not the original invoice. That means leasing customers enjoy the lower rentals now without sacrificing residuals later.
- What if the government changes its mind? Once your vehicle is ordered and the grant applied, the saving is locked—even if the scheme is tweaked later. Delaying, however, risks missing out entirely if funds are ring‑fenced or exhausted.
- Do optional extras count towards the vehicle value? Optional extras do not count towards the value except when they impact vehicle performance (e.g. a bigger battery). For example, if upgrading to a larger battery pushes the vehicle's RRP above the threshold, it will not be eligible for the grant. However, if extras such a heated seats or comfort and convenience features cause the value to rise beyond the threshold, the eligibility is not impacted.
- Is there a cap on the total number of vehicles? No, there's no restriction of to the number of vehicles you can order, great for fleet customers.
Ready to Make the Switch?
Rivervale has been helping drivers go electric since the very first Nissan Leaf leases back in 2011. With the Electric Car Grant back on the table, there has never been a more cost‑effective moment to order your EV.
Explore Electric Cars Available To Lease
