Is the electric car grant actually working?
Car changing is a big deal
It’s now been a year since the UK government launched its electric car grant – but has the scheme actually convinced more people to buy an EV? Carwow data says otherwise.
The UK government’s electric car grant is designed for one purpose: to encourage drivers to make the switch from petrol and diesel by slashing the upfront cost of an EV. Since its launch in July 2025, government statistics show that it has helped over 100,000 drivers save up to £3,750 off an EV.
But while the data shows that it has benefited many people across the UK, has the scheme truly swayed people to go electric? Or are other factors influencing prospective buyers from buying EVs?
Remember, you can buy a brand new or used electric car right here on Carwow. We’re here to help you through every step of your car-changing journey.
EV sales have risen since the scheme began
The UK electric car market has continued to grow since the grant was introduced. In April, the UK registered its two millionth electric car, while EV registrations rose by 34.2% year-on-year in May, according to the Society of Motor Manufacturers and Traders (SMMT).
The Department for Transport (DfT) says the Electric Car Grant is “breaking down one of the key barriers to drivers making the switch to electric”. It added that March 2026 saw the highest monthly demand for the scheme since its launch, taking the number of drivers having benefited from the grant to over 100,000.
Transport secretary Heidi Alexander described the two-millionth EV registration as “a key moment in the UK’s transition to electric”, adding that “as global fuel prices continue to fluctuate, making the switch has never made more sense”.
Speaking last year when the scheme began, Tanya Sinclair, chief executive of industry body Electric Vehicles UK, said: “Policies and incentives all need to point drivers towards EVs, which is why the Electric Car Grant has put 100,000 more people behind the wheel who might otherwise have waited.”
The grant hasn’t made waves in the UK market
Carwow research suggests that while the UK’s electric car grant may have nudged more drivers towards considering an EV, it hasn’t transformed the market in the way policymakers may have hoped.
On Carwow’s marketplace, EVs accounted for 34% of enquiries on the platform in the two weeks to 14 July 2026, up from 24% in the same period a year earlier, before the grant launched. But when Carwow asked drivers directly whether the grant itself was behind their decision, the picture looks more modest.
In the first half of 2025 – before the scheme launched – 33% of Carwow users surveyed said they were interested in buying an electric car. After the grant was introduced, that figure rose just 4% to 37% and only edged up to 38% in the first half of 2026.
The UK’s progress looks moderate when compared with Germany’s household-income-based EV subsidy, launched in January 2026. Carwow research has found that EV consideration among German shoppers reached 65% after the incentive was introduced, compared with 38% in the UK in the same period.
Why isn’t the UK grant gaining as much traction as Germany’s?
Germany’s EV grant has clearly had a much bigger impact on buyer intent than the UK’s, but why?
One reason for this may be that the UK grant has struggled to reach consumers. Six months after launch, awareness among UK car buyers had barely shifted.
Carwow surveys found that just 35.8% of in-market shoppers knew about the scheme in August 2025, rising only slightly to 36.7% by January 2026. In other words, around two-thirds (62%) of people shopping for a new car still hadn’t heard of it.
Even among those who were aware of the grant, its impact on affordability appeared limited. While the scheme is promoted as offering “up to £3,750”, most eligible cars actually qualify for the lower £1,500 discount.
Carwow’s research found that fewer than one in five shoppers who knew about the grant said it had genuinely reduced the cost barrier to buying an electric car. Meanwhile, around 73% said they would be more likely to choose an EV if every eligible model received the full £3,750 discount.
Part of the problem may be that the grant is largely invisible to consumers. The discount is applied automatically by the dealer, meaning buyers don’t actively apply for it or receive any confirmation that they’ve benefited.
Combined with limited public promotion, the gradual rollout of eligible models and the fact that most qualifying cars receive the lower payment, the scheme has struggled to cut through.
Carwow’s research also highlights a stark contrast with Germany’s EV scheme. By June 2026, fewer than 7% of German car buyers were unaware that a new EV incentive existed.
Although Germany’s scheme is more complex, it offers different payments that depend on household circumstances, with the highest worth up to around €6,000 (approximately £5,100). This higher incentive, along with strong news coverage, may have helped make it more visible in Germany.
Other factors contributing to EV adoption
There are several other factors that could also explain the growing interest in electric cars beyond the introduction of the EV grant.
One is the tax system. Low Benefit-in-Kind (BiK) rates have made EVs particularly attractive as company cars and through salary sacrifice schemes, allowing employees to lease a car using their gross salary while reducing their overall tax bill.
Running costs also remain a major draw. Although electric cars are no longer exempt from Vehicle Excise Duty, they are still significantly cheaper to fuel than petrol or diesel cars, particularly for drivers who can charge at home overnight on a discounted electricity tariff.
To see how the numbers compare in the real world, we analysed the running costs of four different powertrain types over three years, based on an annual mileage of 8,000 miles. This analysis shows that if you can charge at home, leasing an electric car is a bargain.
More recently, higher fuel prices have also encouraged some motorists to consider making the switch. Carwow data shows electric car enquiries rose by 23% in April as fuel prices increased following the Iran conflict, highlighting how changes in petrol and diesel prices can quickly influence buyer behaviour.
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