Government introduces new Electric Car Grant cap

The UK Government has closed a loophole in the Electric Car Grant which allowed buyers to get a discount on more expensive models.

From today (August 29) the Department for Transport has introduced an Electric Car Grant cap of £42,000, cutting the number of vehicles eligible for government discounts.

The EV grant was intended to offer a purchase grant on cars costing up to £37,000. However, a loophole in the policy meant that as long as one variant sat under that threshold then other more expensive versions were also eligible for the grant.

For example, three versions of the Cupra Born previously qualified for a discount despite the fact only the entry-level VZ1 cost less than £37,000. Its £35,690 starting price allowed the VZ2 and VZ3 trim levels – priced from £37,460 and £39,210 respectively – to also qualify for a £1,500 discount.

Now, the government has clarified the wording around the grant and capped eligible cars’ value. In an update to the application process it noted: “From 29 August 2025 interpolation family variants will have a price cap of £42,000. Any vehicle with a purchase price over £42,000 after this date is not eligible for grant support.”

In a statement, the DfT said: “The Electric Car Grant is putting money back in people’s pockets whilst also providing a vital boost for industry. The maximum price limit ensures only eligible cars priced at the lower end of the market can qualify for the discounts, ensuring government support is targeted.”

The ECG offers grants of £1,500 or £3,750 towards the purchase price of a new electric car. The £650 million fund is intended to answer industry calls for help to boost interest in EVs.

While 31 models have now been approved for the scheme, just two – both Fords – have qualified for the higher level of grant.