Government hints at plug-in car grant return to boost EV demand

The Government is hinting at the return of the plug-in car grant to boost retail demand for electric vehicles.

 Transport secretary, Heidi Alexander, told ‘Sunday with Laura Kuenssberg’: “We are going to be making some announcements later this week on how we make it more affordable for people to buy an electric vehicle.

“...We will be making it cheaper for those who do want to make the switch to an EV."

Alexander refused to confirm either way to Kussenberg whether making it cheaper would come in the form of subsidies.

However, a report from The Telegraph said the Government is expected to announce two new chemes on July 15, backed by £640 million in funding.

There could be a higher incentive grant for EVs manufacturers in the UK, which would boost sales for companies like Nissan in particular with its Leaf, which is produced in Sunderland.

Private battery electric vehicle (BEV) uptake has fallen 10.8% year-to-date, with fewer than one in five new BEVs going to private buyers. 

Across the first six months of 2025 new battery electric vehicle (BEV) registrations have risen 34.6% to 224,841 units but, at 21.6% market share, but this has been boosted by fleet market demand and total BEV registrations remain behind the 28% target as part of the Zero Emissions Vehicle (ZEV) mandate for this year.

Moreover, the Society of Motor Manufacturers and Traders (SMMT) has estimated that achieving this level of market penetration has required discounts totalling £6.5 billion over the last 18 months.

In a recent survey of automotive CEOs carried out  for SMMT’s new Automotive Business Leaders Barometer, more than half (55%) said they believe the UK is significantly behind plan to meet the 2030 end of sale date for new cars powered solely by combustion engines

The Department for Transport (DfT) has already officially confirmed a £63m investment package to support home charging for households without driveways; transition NHS fleets to save millions for the health service in England; and install "thousands" of chargepoints at business depots across the UK.

At the time of that announcement on July 12, Alexander said: "We are making it easier and cheaper to own an electric vehicle.

"We know access to charging is a barrier for people thinking of making the switch, and we are tackling that head-on so that everyone - whether or not they have a driveway - can access the benefits of going electric."

Part of the investment makes funds available for cross pavement solutions to get homechargers to those that park near their house on the street, but don't have a driveway.