The UK's Electric Car Grant is easy to describe badly: "up to £3,750 off a new EV". Useful, yes, but not quite enough information to make a buying decision.
For Mileage Tracker readers, the better question is more practical: what does that discount do to your real cost per mile?
That matters because an upfront saving only becomes meaningful once you spread it across the miles you actually drive. A £3,750 discount is worth very different things to a low-mileage private driver, a 12,000-mile commuter, and someone using their own EV for regular business journeys.
What the Electric Car Grant does
GOV.UK says some new zero-emission cars are eligible for a government grant, and the buyer does not apply directly. The seller includes the grant as a discount in the purchase price.
There are currently two grant bands:
- Band 1: up to £3,750 off eligible cars assessed in the highest grant band.
- Band 2: up to £1,500 off eligible cars assessed in the second grant band.
The live GOV.UK list is the place to check before buying, because model eligibility can change as manufacturers apply and new variants are approved. As of the latest GOV.UK eligible-cars page checked for this article, Band 1 includes models such as the Abarth 500e, Ford Puma Gen-E, Hyundai KONA Electric, Kia EV4, Nissan LEAF, Renault 5 (52 kWh) and others. Band 2 includes a longer list covering selected models from Citroën, Cupra, DS, Fiat, Ford, Jeep, Kia, Nissan, Peugeot, Renault, Skoda, Toyota, Vauxhall and Volkswagen.
Who qualifies, in plain English?
The grant is for new eligible electric cars at the point of first registration. It is not a used-EV grant, and it is not a reimbursement you claim later after buying privately.
The official eligibility rules are detailed, but the practical basics are:
- The car must be a passenger vehicle and produce 0g CO2/km at the tailpipe.
- It must have a minimum battery range of 100 miles.
- It must meet warranty requirements, including an 8-year or 100,000-mile battery warranty.
- It must meet sustainability criteria linked to how the vehicle and battery are produced.
- It must be an approved model on the official eligible-vehicles list.
The separate manufacturer guidance says the grant is aimed at vehicles priced at £37,000 or below, with specific rules for variants and optional extras. That is why you should not assume that every trim level of a familiar model qualifies just because a version of that model appears in a dealer advert.
The cost-per-mile way to judge the grant
A purchase discount reduces the capital cost of the car. To make that useful for day-to-day budgeting, spread the saving across the miles you expect to drive while you own or lease the vehicle.
The simple formula is:
- Grant value per mile = grant amount ÷ miles driven during your ownership period
Here are three quick examples:
- £3,750 grant over 30,000 miles = 12.5p per mile reduction in purchase cost.
- £3,750 grant over 45,000 miles = 8.3p per mile reduction.
- £1,500 grant over 45,000 miles = 3.3p per mile reduction.
This does not mean your EV suddenly "costs" 12.5p less per mile forever. It means the grant has offset that much of the car's upfront cost across the mileage assumption you chose. The higher your mileage, the more thinly that saving is spread; the lower your mileage, the bigger the per-mile effect looks.
Why your mileage assumption matters
Two drivers can buy the same eligible EV and get the same grant, but their real result can look very different.
A low-mileage driver doing 5,000 miles a year for three years covers 15,000 miles. A £3,750 grant spread across that use is worth 25p per mile. A higher-mileage driver doing 15,000 miles a year for the same period covers 45,000 miles, making the same grant worth about 8.3p per mile.
Neither number is "better" by itself. The point is that mileage turns a headline discount into a number you can compare with other ownership costs, such as charging, insurance, servicing, tyres, road tax and future depreciation.
Do not confuse purchase grants with mileage rates
The Electric Car Grant is not an HMRC mileage allowance. If you use your own car for business journeys, the usual approved mileage allowance rules still matter. If you drive a company EV, advisory electric rates may matter instead.
The grant sits in a different bucket: it lowers the purchase price of an eligible new EV. That can improve your total cost of ownership, but it does not tell you what to claim from an employer and it does not replace a clean business-mileage log.
That distinction is especially important if you are buying an EV partly because you drive for work. The purchase discount may make the car easier to justify, but your ongoing records still need to separate:
- business miles from personal miles
- home charging from public charging, where relevant
- journey purpose, dates and locations for claim evidence
What to check before you sign an order
If the grant is part of your buying maths, check the detail before treating the discount as guaranteed.
- Check the exact model and battery version on GOV.UK, not just the badge name.
- Confirm the grant band, because £1,500 and £3,750 change the numbers differently.
- Ask how the seller applies the discount on the order paperwork and final invoice.
- Compare like with like, because a non-eligible car with a manufacturer discount might still beat an eligible car on total cost.
- Build a mileage assumption for your expected ownership period before deciding the grant is decisive.
It is also worth remembering that the official guidance says grant levels and category criteria can change without notice. That does not mean panic-buying is sensible. It does mean you should check the live page close to the point of order, not rely on a saved screenshot or an old social post.
A simple ownership example
Suppose you are comparing two new EVs and expect to keep the car for three years.
- Car A qualifies for a £3,750 grant.
- Car B qualifies for a £1,500 grant.
- You expect to drive 12,000 miles a year, or 36,000 miles over three years.
Car A's grant is worth about 10.4p per mile across that period. Car B's grant is worth about 4.2p per mile. The difference between the two grants is £2,250, or about 6.3p per mile over 36,000 miles.
That gives you a more grounded comparison. If Car B is cheaper to insure, better suited to your journeys, or comes with a sharper finance offer, the lower grant might not be a problem. If everything else is close, the higher grant can make a real difference.
Where Mileage Tracker fits in
Mileage Tracker helps with the part most people leave too vague: the mileage itself.
If you keep clean journey records, you can:
- estimate your likely annual mileage before buying
- compare expected mileage with actual mileage after a few months
- separate work journeys from private journeys
- turn purchase, charging and tax costs into clearer pence-per-mile numbers
That is useful whether you are buying privately, choosing a salary-sacrifice EV, or working out whether a new car makes sense alongside public charging, home charging and regular business trips.
Practical takeaway: the Electric Car Grant is worth checking if you are buying a new EV in 2026, but do not stop at the headline discount. Check the exact model, confirm the grant band, then divide the saving by your expected miles. That is the number that tells you how much the grant really changes your running-cost story.
Sources
- GOV.UK: Zero emission vehicles eligible for a grant: Cars
- GOV.UK: How to apply for vehicle eligibility for the Electric Car Grant
- GOV.UK: First car models approved for £1500 discount to turbocharge the move to electric
- GOV.UK: Subsidy Advice Unit report on the Electric Car Grant
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