London Daily

Focus on the big picture.
Wednesday, Jul 08, 2026

UK cuts grants for electric vehicles for second time in a year

UK cuts grants for electric vehicles for second time in a year

Subsidy available will fall from £2,500 to £1,500 – half the sum available to buyers at the start of the year
The UK government has cut grants for electric vehicles for the second time in a year, provoking the anger of the car industry and prompting a call for car tax to be redesigned.

The grant available for electric cars will fall from £2,500 to £1,500 – half the sum available to buyers at the start of the year. The upper price limit for eligible car models will fall from £35,000 to £32,000, down from £50,000 in March.

The government is also cutting the grant on large and small vans from £6,000 to £5,000 and £3,000 to £2,500 respectively, it said in an announcement on Wednesday.

Electric cars – which produce zero carbon dioxide exhaust emissions – accounted for 19% of cars sold in the UK in November, as carmakers bring a series of new models to market and demand soars amid rocketing fuel prices.

The government is helping with a mixture of stick – including large fines for carmakers who make too many polluting cars – and carrots like the plug-in car grant and some tax exemptions.

However, the rising take-up of electric cars has presented a problem to the Treasury, which has been alarmed by the increasing cost of subsidies, many of which are enjoyed by wealthier buyers who can afford a new electric car, as well as the impact on fuel duty.

Some experts argue that government funding would be better aimed at problems such as still-patchy charging infrastructure. At the same time, the government has allocated as much as £50bn in implicit subsidies to petrol and diesel consumption by freezing fuel duty for a decade.

Greg Archer, UK director of Transport & Environment, a campaign group, said: “I think it’s inevitable that grants will be progressively phased out, and it’s right that they should be. The government can’t keep bankrolling this transition, but it needs to make sure there are good incentives for all parts of the market.

“We could be doing just as much by increasing the taxes on large, high-emitting vehicles.”

The industry argues that the government should not be making electric cars more expensive while also trying to encourage more people to buy them.

Paul Willcox, the managing director of British brand Vauxhall, which is owned by multinational conglomerate Stellantis, said a “more strategic, longer-term approach” was required from government, and argued that the UK is lagging behind other European countries which are still heavily subsidising purchases.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “Slashing the grants for electric vehicles once again is a blow to customers looking to make the switch and couldn’t come at a worse time, with inflation at a 10-year high and pandemic-related economic uncertainty looming large.

“We need to move the market even faster – from one in a hundred cars on the road being electric, to potentially one in three in just eight years – which means we should be doubling down on incentives.”
Newsletter

Related Articles

0:00
0:00
Close
Federal Financial Framework Shifts as Treasury Launches Universal Savings Program for Minors
French Court Allows Le Pen to Run for Presidency, but with an Electronic Tag: "I Will Appeal, and I Will Run"
$1.4 Trillion: The Lawsuit That Could Crush Meta
Europe's Growing Struggle with Extreme Heat and Air Conditioning
UK Daily Briefing: Legal Developments and Social Issues
Political Turmoil and Rising Costs
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Logic Flaw in Windows 11 Permission Architecture Silently Consumes Hundreds of Gigabytes of Local Storage
Apple Advances Late-Stage Operating Systems with Fourth Beta Deployments
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
UK Parliament Pushes for Greater Domestic Control Over Critical Technologies
UK Parliament Warns Trade Fair and Exhibition Industry Is Losing Global Competitiveness
Police Launch Murder Investigation After Mother and Two Children Found Dead Near Bedford
British Chambers of Commerce Survey Shows Business Confidence Falls to Post-Pandemic Low
UK Parliament Report Warns Britain Risks Falling Behind in Artificial Intelligence Sovereignty
Office for Budget Responsibility Warns United Kingdom Faces Long-Term Fiscal Pressures
Nigel Farage Resigns as Member of Parliament Amid Financial Scrutiny and Triggers By-Election
Deep Purple Has Released Its Best Album in Decades
UK MPs Criticise Student Loan System as Potentially Mis-Sold to Millions of Borrowers
Policy Groups Propose Bank of England-Backed Solar Loan Scheme for Millions of Homes
UK Health Agency Issues Amber Heat Alerts Across Six Regions as Temperatures Rise
Royal Air Force F-35 Jets Conduct First High North Air Policing Missions From Aircraft Carrier
Major UK Companies Join Government Cybersecurity Pledge Amid Rising Digital Threats
UK Sanctions Russian Operatives Linked to Chemical Weapons Programmes and Poisoning Cases
UK Government Expands Free Breakfast Clubs and Limits School Uniform Costs
UK Water Companies Face Tougher Penalties Under New Environmental Enforcement Rules
UK Universities Warn Funding Cuts Could Damage Skills Pipeline and Economic Growth
NHS Expands Artificial Intelligence Tools to Help Reduce Patient Waiting Lists
NHS Ombudsman Criticises Failures in End-of-Life Communication and Patient Care
NHS Launches Nationwide Vaccination Drive After Rise in Measles Cases
UK Government Introduces New Limits on Foreign-Linked Political Donations
Thames Water Creditors Advance £10 Billion Rescue Plan to Prevent Potential Public Ownership
Andy Burnham Prepares Labour Leadership Platform as Party Faces Post-Starmer Transition
UK Met Office Issues Heatwave Alerts for London and Southern England
Keir Starmer Blocks Earlier World Cup Kick-Off Time for England Match Against Mexico
NHS Digital Transformation and Media Consolidation Highlight UK Policy Priorities
UK Government Pushes Digital Trade Rules to Cut Export Costs for Businesses
Bank of England Plans Leverage Rule Changes to Support Government Bond Market
UK Police Operation Targets Organised Immigration Crime Networks With Hundreds of Arrests
Yvette Cooper Calls for Global AI Rules to Prevent Security Risks
NHS Begins Major AI Expansion Through £10 Billion Digital Investment Programme
UK Government Tightens Rules on Political Donations to Limit Foreign Influence
Keir Starmer Defends UK Defence Spending Plan at NATO Summit in Turkey
Comcast’s Sky Agrees £1.6 Billion Deal to Acquire ITV Media and Entertainment Division
Senior NHS Doctors Vote in Favour of Renewed Strike Action Over Pay Dispute
Andy Burnham Set to Succeed Keir Starmer as Labour Leadership Nominations Open
Microsoft Lays Off 4,800 Employees and Xbox Suffers the Hardest Blow
Office for National Statistics Updates Historical Investment Data Review to Improve Accuracy
Department for Science, Innovation and Technology Highlights Economic Gains From Digital Inclusion
Debate Intensifies Over UK Defence Strategy and Domestic Security Priorities
×