EV car incentives and how to save

Switching to an electric vehicle (EV) in the UK can unlock significant savings beyond the initial purchase price. While direct government grants for private EV purchases have changed, a range of financial incentives still exists to support charging infrastructure, reduce running costs, and provide tax advantages. Understanding these schemes is crucial for making EV ownership more affordable and accessible.

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Understanding UK EV incentives

The landscape of UK electric vehicle incentives is continually evolving, reflecting the government's commitment to accelerating EV adoption. These incentives aim to reduce both the upfront costs and the ongoing expenses associated with owning an EV, encouraging more drivers to make the transition.

The evolving landscape of EV support

The UK government's approach to EV incentives has shifted over time. The Plug-in Car Grant for private cars, which once offered a significant discount on new electric vehicles, ended on 14 June 2022. However, support continues for other vehicle types, such as vans and taxis, and crucially, for the charging infrastructure that powers these vehicles.

Key types of EV incentives

UK EV incentives primarily fall into three categories: grants for charging infrastructure, tax benefits, and local authority support. These are designed to make EV ownership more attractive by addressing key cost barriers, from the installation of home chargers to ongoing running expenses.

Government grants for EV charging

Several government grants are available to help with the cost of installing EV charging points, making it easier and more affordable to power your electric vehicle.

EV Chargepoint Grant for homes

The Office for Zero Emission Vehicles (OZEV) offers grants for eligible properties to install a home chargepoint. The EV Chargepoint Grant for renters and flat owners provides up to £500 towards installing a chargepoint at the property. This is available to those who own and live in a flat, or rent and live in any residential property, provided they have private off-street parking.

Another scheme, the EV Chargepoint Grant for households with on-street parking, also provides up to £500 towards installing a chargepoint. Eligibility requires owning or renting the property, having only on-street parking, and installing a cross-pavement solution, such as a charging gully.

There is also an EV Chargepoint Grant for landlords, offering up to £500 per socket, for up to 200 sockets across all sites. These schemes are available until 31 March 2027. It is important to note that the customer applies for these grants themselves via the GOV.UK website; the installer's role begins after the application is approved.

Workplace charging scheme (WCS)

Businesses, charities, and public sector organisations can benefit from the Workplace Charging Scheme (WCS), which provides grants for installing EV chargepoints at their premises. This scheme offers up to £500 per socket, with a maximum of 40 sockets across all sites per applicant. The WCS has been extended until 31 March 2027.

On-street residential chargepoint scheme (ORCS)

The On-street Residential Chargepoint Scheme (ORCS) provided grant funding to local authorities to install on-street chargepoints between 2017 and 2024. This scheme aimed to improve the availability of local EV charging infrastructure for residents without off-street parking. The ORCS is now closed to new applications, though ongoing projects were expected to be completed by March 2025.

Tax benefits and ownership savings

Beyond initial grants, EV owners can benefit from significant tax advantages that reduce the overall cost of ownership.

Company car tax (Benefit-in-Kind)

Company car tax, also known as Benefit-in-Kind (BIK), rates for electric vehicles are significantly lower than for petrol or diesel cars. This makes EVs a highly attractive option for employees choosing a company car or participating in salary sacrifice schemes. While BIK rates for electric cars are gradually increasing, they remain substantially lower than for internal combustion engine vehicles. For the 2026/27 tax year, the BIK rate for fully electric company cars is 4%.

Vehicle Excise Duty (VED)

Zero-Emission vehicles will begin paying Vehicle Excise Duty (VED) from 1 April 2025. New EVs registered on or after this date will pay a first-year rate of £10, rising to the standard annual rate of £195 from the second year onwards. Existing EVs registered between 1 April 2017 and 31 March 2025 will move to the standard £195 annual rate from April 2025.

Salary sacrifice schemes for EVs

Salary sacrifice schemes offer a tax-efficient way for employees to acquire an EV. Under these schemes, employees exchange a portion of their gross salary for a non-cash benefit, such as an electric car lease. This reduces their income tax and National Insurance contributions, making EV ownership more affordable. The low BIK rates for EVs enhance the financial benefits of these schemes, making them one of the most tax-efficient ways to access a new car.

Local authority support and Clean Air Zones

Local initiatives and Clean Air Zones further contribute to the financial benefits of owning an EV in the UK.

Local grants and initiatives

Some local authorities offer additional grants or incentives for EV owners, such as discounted parking or specific charging initiatives. These vary by region, so it is worth checking with your local council for any schemes in your area.

Benefits of Clean Air Zones

Clean Air Zones (CAZs) are areas where charges apply to the most polluting vehicles. Electric vehicles, being Zero-Emission, are exempt from these charges, offering significant savings for drivers who regularly travel within CAZs. This exemption provides a clear financial advantage for EV owners in urban areas.

Optimising EV running costs with smart energy

Beyond initial incentives, smart energy management is key to maximising savings on EV running costs.

The role of smart tariffs

Smart tariffs, particularly time-of-use tariffs, allow EV owners to charge their vehicles when electricity is cheaper, typically overnight during off-peak hours. This can significantly reduce the cost of charging compared to standard tariffs. Ofgem regulates energy suppliers in Great Britain, impacting how EV charging tariffs are structured and offered.

Maximising savings with smart charging

Smart charging involves using technology to automatically charge your EV during the cheapest, cleanest times. Fuse Energy's app and smart tariffs provide customers with control over their EV charging costs, making it a 'power play' for financial advantage. This approach aligns with Fuse's vision of providing 'power to play with' by making energy abundant and challenging the 'use less' scarcity mindset. By integrating smart charging with smart energy choices, EV ownership offers more capability and financial surplus. Fuse also offers 24/7 human customer support to reinforce confidence in managing EV energy.

The future of EV incentives

The landscape of EV incentives is dynamic, with ongoing policy updates and technological advancements shaping future support.

What to expect next

While the government continues to support EV adoption through various grants and tax benefits, the focus may shift towards broader infrastructure development and encouraging sustainable manufacturing practices. Policy changes are always possible, and staying informed is crucial for EV owners and prospective buyers.

Staying informed about policy changes

Government grants and tax benefits for electric vehicles are subject to change based on policy updates. Reliable information from official sources is essential to navigate these changes effectively. Keeping an eye on announcements from the UK government and energy regulators like Ofgem will help you stay ahead.

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