Electric Car Grant set for £1.3bn boost under 2026 Budget
The Government is poised to announce an extra £1.5 billion in funding to support EV uptake even as it considers a new tax on electric cars.
Chancellor Rachel Reeves is expected to announce an additional £1.3bn investment in the Electric Car Grant to help make more EVs accessible to more people.
She is also expected to allocate a further £200 million to help local authorities support public charger roll-out.
The Government says that the ECG, which was initially allocated £650m of funding, has so far helped 35,000 drivers buy a new EV via discounts of £1,500 or £3,750.
The extra money is expected to help extend the scheme beyond the 2028/29 financial year as car makers work to hit the ZEV mandate targets.
Amid rumours of the additional spending. Transport Secretary Heidi Alexander told the BBC’s Sunday with Laura Kuenssberg: “This is an investment in the country’s future… and the good quality manufacturing jobs associated with that,” referring to Nissan’s EV production at Sunderland.
“So making sure that we are enabling people to buy a new electric vehicle if that’s what they want to do, whilst also investing in charging infrastructure, is the right long-term decision.”
Along with more money for the ECG, councils are set to get more money to help with the installation of on-street chargers for drivers without off-street parking.
A government spokesperson said: “The proposed funding will support the creation of thousands of charge points and provide extra resources for local authorities to ramp up charging infrastructure on local streets – making it easier for everyone to access reliable charging, including those without off-street parking.”
While discussing putting extra money on the table to help EV purchases, the Chancellor is also believed to be planning a new pay-per-mile tax on electric vehicles.
The scheme will reportedly see EV drivers charged 3p per mile, adding around £250 a year to the average drivers’ running costs.
Senior figures in the car industry and beyond have warned that such a move could stall progress on EV uptake and sent mixed messages about the Government’s commitment to EVs.
However, the Treasury has said that the UK needs a fairer approach to taxation for all drivers as it looks to offset falling fuel duty revenue caused by increased EV uptake.
