If you are considering making the switch to an electric vehicle in the United Kingdom, understanding the current landscape of EV incentives is essential for making an informed purchasing decision. While the landscape of government support has evolved significantly, there remain substantial financial benefits available to electric car buyers in 2026.
What Happened to the UK Plug-In EV Grant?
The government-funded plug-in grant, which once offered up to £2,500 towards the purchase of qualifying electric vehicles, officially ended for new car purchases in June 2022. This decision marked a significant shift in UK EV policy, with the government arguing that electric vehicles had reached a stage where market incentives were sufficient to drive adoption without direct purchase subsidies.
However, declaring the death of EV incentives entirely would be misleading. While the direct purchase ev grant has concluded, drivers can still access a range of meaningful financial advantages that often outweigh the value of the former subsidy scheme. These remaining incentives focus on ongoing cost savings rather than upfront purchase assistance, making electric vehicles increasingly attractive from a total cost of ownership perspective.
Current EV Incentives Still Available in 2026
Despite the withdrawal of the plug-in grant, several compelling incentives remain in place for UK electric vehicle owners. Understanding these benefits can help you calculate whether an EV makes financial sense for your circumstances.
UK EV Incentives Overview 2026
| Incentive Type | Status in 2026 | Potential Savings |
|---|---|---|
| Plug-in car grant | Ended June 2022 | No longer available |
| Benefit in Kind (BIK) | Still available | 0% for pure EVs |
| Road tax exemption | Still available | First 5 years free |
| Home charger grant (OZEV) | Still available | Up to £350 |
| Salary sacrifice schemes | Still available | National Insurance savings |
| Vehicle Excise Duty | First year exempt | £0 first year |
| Import duty on EVs | Reduced under FTA | Varies by agreement |
Zero Percent Benefit in Kind for Electric Vehicles
One of the most significant remaining advantages for company car drivers and business users is the 0% Benefit in Kind rate applied to pure electric company vehicles. This incentive applies to battery electric vehicles (BEVs) and represents one of the most generous tax benefits available to employees in the UK.
Under current HMRC rules, company car drivers of pure electric vehicles pay no Income Tax on the benefit of having a company vehicle for private use. For a higher-rate taxpayer with a company car valued at £40,000, this could represent annual savings of thousands of pounds compared to an equivalent petrol or diesel vehicle, where BIK rates can reach 37%.
This 0% BIK rate applies specifically to zero-emission vehicles, which means pure battery electric cars qualify. Plug-in hybrid vehicles receive a reduced rate but no longer qualify for the zero percent benefit. The differential treatment clearly favours fully electric vehicles and aligns with government policy to accelerate the transition to zero-emission transport.
Road Tax Exemption for Electric Vehicles
Electric vehicles continue to enjoy exemption from Vehicle Excise Duty (road tax), providing meaningful annual savings for owners. Under current regulations, all zero-emission vehicles are exempt from the standard road tax rate, meaning you pay nothing to tax your electric car each year.
The exemption applies to the first registration of battery electric vehicles and continues for the duration of ownership. While this saving may seem modest compared to purchase price differences, it compounds over time and adds to the overall cost-of-ownership advantage that electric vehicles enjoy.
For vehicles registered after April 2017, the first-year rate for electric vehicles is set at £0, followed by continued exemption in subsequent years. This represents a clear financial advantage over conventional vehicles, which start at £190 in the first year and continue at standard rates thereafter.
OZEV Home Charger Grant: Up to £350
The Office for Zero Emission Vehicles (OZEV) continues to support the installation of home charging infrastructure through its Electric Vehicle Homecharge Scheme. This OZEV grant provides a contribution of up to £350 towards the cost of purchasing and installing a dedicated home charging point for electric vehicles.
To qualify for this grant, you must own or lease an eligible electric or plug-in hybrid vehicle and have off-street parking at your property. The scheme requires using an approved installer and an OZEV-certified charging unit, which ensures the installation meets necessary safety and technical standards.
The grant covers 75% of the installation cost up to the maximum £350, meaning a typical £800 installation would leave you paying approximately £450 out of pocket. Given that home charging is the primary method most EV owners use to replenish their batteries, this upfront support makes installing a dedicated charge point significantly more affordable.
Eligibility Requirements for OZEV Grant
To access the OZEV home charger grant, you must meet several straightforward criteria. First, you need to be the registered keeper or lessee of an eligible vehicle, which includes both pure electric and qualifying plug-in hybrid models. Second, you must have access to off-street parking facilities where the charger can be installed. Third, you must use an approved installer from the OZEV list, as installations by non-approved contractors do not qualify for the grant.
The scheme applies to homeowners, landlords, and tenants, though tenant eligibility may vary depending on landlord approval for property modifications. Landlords can also access an additional scheme specifically for rental properties, which operates under similar terms but with different application procedures.
Salary Sacrifice Schemes for Electric Vehicles
Electric vehicle salary sacrifice schemes have emerged as one of the most attractive ways to drive an EV, particularly for employees who do not have access to a company car but want to enjoy the financial benefits of electric motoring. These arrangements allow employees to sacrifice a portion of their salary in exchange for a new electric vehicle, with several tax advantages making this an exceptionally cost-effective route to EV ownership.
The primary financial benefit comes from National Insurance Contributions (NIC) savings. Because the vehicle payment is deducted before income tax and NIC calculations, both employer and employee make savings on their contributions. For a higher-rate taxpayer, this can represent a significant reduction in the true cost of running an electric vehicle compared to purchasing with post-tax income.
When combined with the 0% BIK rate applicable to pure electric vehicles, salary sacrifice schemes offer an exceptionally favourable proposition. Employees effectively get access to a brand-new electric vehicle while making monthly savings compared to purchasing the same car with take-home pay. Many major employers now offer EV salary sacrifice as part of their benefits package.
Manufacturer Deals and Dealer Incentives
While government grants have scaled back, manufacturers have stepped in to fill some of the gap with their own incentive programmes. Many automakers now offer substantial deposit contributions, competitive finance rates, and free charging packages to make their electric vehicles more attractive to prospective buyers.
These manufacturer deals vary considerably between brands and change frequently in response to market conditions. Some brands offer thousands of pounds in incentives, while others focus on competitive finance rates or included servicing packages. Comparing manufacturer offers alongside the available government incentives gives the clearest picture of the total financial package available.
Additionally, the used EV market has matured significantly, with lease returns and fleet disposals providing access to relatively recent electric vehicles at more accessible price points. While these vehicles no longer qualify for government purchase grants, they may still benefit from remaining road tax exemptions and future incentives.
Understanding the Total Cost of EV Ownership
When evaluating whether an electric vehicle makes financial sense, focusing on total cost of ownership rather than purchase price alone reveals the full picture of potential savings. Electric vehicles typically cost more upfront than equivalent petrol or diesel models, but ongoing savings in fuel, maintenance, and taxation frequently offset this difference over a typical ownership period of three to five years.
Electricity costs for home charging are substantially lower than equivalent fuel costs for petrol or diesel vehicles. Even with public rapid charging, electric vehicles typically cost less per mile to run than internal combustion engine alternatives. Combined with dramatically reduced maintenance requirements due to fewer moving parts, the operational cost advantages are significant.
Use our UK car tax calculator to estimate your potential savings from electric vehicle ownership, including road tax exemptions and benefit in kind calculations for company car scenarios.
Frequently Asked Questions
Has the UK EV grant completely ended?
The plug-in car grant for new vehicle purchases ended in June 2022. However, other incentives including the OZEV home charger grant (up to £350), 0% BIK for company cars, and road tax exemptions remain available. The government has shifted focus from purchase subsidies to ongoing operational savings.
Can I still get money towards a home charger?
Yes, the OZEV Electric Vehicle Homecharge Scheme provides up to £350 towards the installation of an approved home charging point. You must have off-street parking and use an approved installer. The grant covers 75% of installation costs up to this maximum.
How much can I save with 0% BIK on an electric company car?
The savings depend on your income tax bracket and the value of the vehicle. A higher-rate taxpayer with a company car worth £50,000 could save over £5,000 per year in Income Tax compared to an equivalent petrol car taxed at the standard BIK rate. Pure electric vehicles qualify for 0% BIK, while plug-in hybrids receive reduced rates.
Are electric vehicles still exempt from road tax?
Yes, all battery electric vehicles remain exempt from Vehicle Excise Duty. This exemption applies for the entire ownership period, not just the first year. While road tax rates are modest, the cumulative savings over several years of ownership add to the overall financial case for choosing electric.
Do salary sacrifice schemes work for electric vehicles?
Yes, EV salary sacrifice schemes are one of the most tax-efficient ways to drive an electric vehicle. Payments are deducted before income tax and National Insurance, creating savings for both employee and employer. Combined with 0% BIK for pure EVs, these schemes can make electric vehicles more affordable than conventional alternatives.
What manufacturer incentives are available for EVs?
Manufacturer incentives vary by brand and change regularly. Common offers include deposit contributions, reduced interest rates on finance, and free or discounted public charging packages. Check with individual manufacturers for current offers, and compare these against the total cost including available government incentives.
Disclaimer: This article provides general information about UK EV incentives and tax benefits as of 2026. Government policies, tax rates, and incentive programmes are subject to change. The information provided does not constitute financial or legal advice. Individual circumstances vary, and we recommend consulting with a qualified financial advisor or tax professional before making purchasing decisions. Always verify current incentive eligibility and programme details on the official Gov.uk website (gov.uk) or with relevant government agencies.