The government’s latest move to boost electric vehicle uptake is both necessary and welcome. The new £650 million Electric Car Grant will offer up to £3,750 off the price of new battery-electric vehicles priced under £37,000. It’s a positive intervention, and one that couldn’t come at a better time.
EV uptake by private buyers has stalled in recent months. Just under 20% of electric vehicles are now sold to individuals, with the majority going to fleet and business users. I have long maintained the argument that this imbalance is unsustainable. A true transition to electric motoring requires private buyers to have a seat at the table – and that means addressing the affordability gap.
With the average new electric vehicle now costing close to £49,000, the market has drifted away from the everyday motorist. This grant helps correct that, opening access to a wider range of customers by making sub-£40,000 EVs more appealing and financially viable.
Encouragingly, the grant is not a blunt instrument. It now features two bands: £3,750 for the most sustainably produced cars, and £1,500 for vehicles that meet some – but not all – environmental criteria. This is in recognition of the need to address embedded carbon emissions across a vehicle’s lifetime, not just exhaust emissions. That’s smart policy. The green transition must be holistic – not only about emissions on the road, but also how the vehicle gets to the road in the first place.
The announcement also arrives alongside investment in charging infrastructure. With more than 80,000 public charge points now installed and additional funding to support home charging for households without driveways, some of the practical barriers to EV adoption are being addressed. It is a joined-up effort, and that is encouraging.
However, this is not without risks, particularly when it comes to used electric vehicles. Last year, two in five second-hand EVs were sold for under £20,000. As more subsidised new EVs enter the market, the second-hand sector may struggle to absorb the volume, which could put further downward pressure on prices. This matters, not just for buyers and sellers, but for leasing companies and manufacturers who rely on strong residual values to make their financial models work.
We need to monitor this closely. If used electric vehicle values decline too steeply, it could erode confidence and reduce uptake. Measures such as scrappage schemes, tax incentives for used EV purchases, or even battery health certification could help stabilise the sector.
Overall, though, this new grant represents a step in the right direction. It is targeted, pragmatic, and aligned with broader sustainability goals. For Vertu, and the industry more widely, it sends the right signal: that the government remains committed to supporting the EV transition in a thoughtful, consumer-friendly way. The task now is to make sure we bring the used car market along with us.”
Robert Forrester is CEO of Vertu Motors