FOUR MORE ELECTRIC CARS QUALIFY FOR LABOUR'S £3,750 DISCOUNT SCHEME

A week after the Chancellor announced that electric car owners would incur pay-per-mile taxation, the Government has confirmed that four new EVs have qualified for the full discount amount in its grant scheme designed to drive sales. 

The Department for Transport today said the Mini Countryman and long-range versions of the Alpine A290 and Renault's 4 and 5 EVs have all met its stringent sustainability criteria and will be awarded a £3,750 discount off their retail prices with immediate effect.

Rachel Reeves in her Autumn Budget statement last Wednesday confirmed a further £1.3billion in funding for the Electric Car Grant (ECG) to extend its availability until 2029-30. It had originally been propped up by a taxpayer backed £650million investment.

Ministers say the grant will 'help to tackle upfront costs' of purchasing EVs, which is 'traditionally one of the biggest barriers to uptake'.

However, Reeves also confirmed in last week's Budget an electric Vehicle Excise Duty (eVED) charge of 3p per mile for EVs owners - and 1.5p for drivers of plug-in hybrid cars - will be levied from 2028, which motor industry insiders say could cripple demand.

Since the grant debuted in July, over 40,000 customers have reportedly taken advantage of lower electric car prices, according to the DfT.

In total, there are now 40 different electric models that are eligible for the ECG.

However, just eight - 20 per cent - are subject to receiving the full £3,750 discount allowance.

The remaining EVs receive a reduced grant of £1,500 having failed to meet the scheme's strict sustainability requirements.

Car makers must prove the emissions produced during the battery's manufacturing, the vehicle's assembly, and the carbon intensity of the electric grids in the countries where the car is made when applying for grants.

The ruling on sustainability has seen all Chinese brands excluded from the scheme so far, while no EVs from Korean manufacturers are yet to meet the eligibility criteria either.

The scheme offers buyers money off new all-electric models that are sustainably manufactured and priced at – or under – £37,000.

A certain threshold (which has not been confirmed by the DfT) needs to be met to qualify as a 'Band 1' model and the full £3,750 subsidy. Models failing to meet this benchmark will be deemed 'Band 2' and only receive a £1,500 discount. 

Ministers say the aim if the 'targeted' scheme is to make 'affordable' EVs even more appealing to private buyers by reducing their prices further to make them more attainable.

While the Alpine A290, Renault 4 and Renault 5 with the smaller 40kW batteries had already qualified for the band 2 discount, the variants with the long-range 52kW battery pack are now confirmed as receiving the full £3,750 band 1 saving.

This is because the latter are fitted with batteries sourced from Renault Group’s newly opened Douai gigafactory, and which is run in partnership with AESC, and part of the 'sustainability-focused Electri-city car production hub' in northern France. 

'The awarding of the top-tier £3,750 Electric Car Grant is great news for customers who are thinking about switching to electric,' said Adam Wood, managing director of Renault Group UK. 

'Renault 5 and Renault 4 are multi award-winning vehicles thanks to their unique blend of head and heart appeal and, now, thanks to the added incentive of top tier Electric Car Grant, they are more accessible than ever.'

He added: 'We are pleased to see that our focus on environmental accountability and investment in made-in-Europe battery manufacturing has been recognised by the awarding of the top-tier Electric Car Grant. 

'Since the grant was introduced we have seen momentum build in the market, and this decision will further boost the UK’s rising EV sales even further.'

Prices for Renault 5+ models eligible for the grant will now start from £23,945, while the bigger-battery Renault 4+ range is priced from £23,445 including the ECG discount.

While first deliveries of the new Alpine A290+ won't arrive until early next year, its entry price has been slashed by £3,750 to start from £30,245.

'Earning the full £3,750 grant eligibility is fantastic news, and I’ve no doubt will accelerate the already amazing interest we have in the award-winning Alpine A290,' said Nicola Burnside, head of Alpine Cars UK.

Transport secretary, Heidi Alexander, said: 'Our Electric Car Grant has already supported over 40,000 drivers to choose electric, and this latest expansion doubles the number of models available for the top discount – putting thousands of pounds back in more families' pockets.

'We’re doubling down on our drive to help people buy EVs, extending the grant to push down costs and boosting charging access with a further £200 million to expand the charging network across the UK.'

However, despite the availability of the price-slashing discounts, the motor industry has in the last seven days been reeling from Reeves' confirmation of pay-per-mile EV tax from 2028, with sector insiders saying it could be a dagger in the heart for electric car appetite. 

Robert Forrester, chief executive of nationwide motor showroom Vertu Motors, earlier this week said the tax raid on EVs will be a hammer blow to demand and force brands to restrict the number of petrol cars they bring into the country.

Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders, said  eVED is 'the wrong measure at the wrong time', adding: 'This new tax will undermine demand, so government must work with industry to reduce the cost of compliance and protect the UK’s investment appeal.'

Car giant Ford said in the wake of Reeves' announcement on Wednesday that eVED 'sends a confusing message' to drivers at a time when the EV transition is stumbling: 'Extra investment in charging and the Electric Car Grant is positive, but it cannot offset the impact of a poorly timed pay per mile charge on EVs and hybrids.

'Against a hugely challenging market, and compliance targets drifting out of reach, this is the wrong tax at the wrong time.'

Matt Galvin, managing director of EV manufacturer Polestar, last Wednesday also said: 'We have always been clear that EV drivers should contribute their fair share to road costs.

'But today’s Budget sends the wrong signal by penalising the very drivers who are accelerating the transition to clean transport.'

2025-12-03T00:29:02Z