Five best EVs to buy with Labour's new £3,750 Electric Car Grant

The Government has reintroduced grants to slash the price of some new electric cars as part of its efforts to boost sales before the end of the decade. 

Transport Secretary Heidi Alexander has today (Monday) unveiled Labour's £650million Electric Car Grant, which comes three years after the previous Tory regime scrapped its own plug-in car grant.

The Department for Transport confirms only fully electric models priced at £37,000 or less are eligible for the new grants of up to £3,750, which will be available from Wednesday with funding confirmed up until 2028-29.

However, there are a number of caveats.

Firstly, the scheme will not immediately be available, despite officially launching on Wednesday. That's because manufacturers need to apply for eligibility for vehicles in their ranges, rather than buyers registering grants at the point of purchase.

And not all grants will have a value of £3,750. There will be a two-tier approach to the value deducted from the recommended retail price (RRP), which is determined by how green the manufacturing process is for each different model.

The RAC says the grant's restrictions mean drivers will be 'picking models that are not only better for their wallets, but better for the planet too'.

We've picked five of the best EVs that are certain to be eligible for the grant - though we will have to wait to find out which will qualify for the full grant amount of £3,750.

The Government has reintroduced grants to slash the price of some new electric cars as part of its efforts to accelerate sales before the end of the decade

What is the Electric Car Grant?

The Electric Car Grant (ECG) is the Government's new big hope to drive sales of EVs in the run-up to the end of the decade.

Over its 11-year spell, the PiCG amount was gradually wound down; having originally offered to slash the price of any new EV or plug-in hybrid by £5,000 in 2011, by the time the scheme was closed in June 2022 only fully-electric cars below £32,000 were eligible, and the amount knocked off the RRP just £1,500.

That said, the scheme proved incredibly successful, provided more than £1.4billion to motorists to support the purchase of nearly half a million electric and hybrid vehicles in that period.

Transport Secretary Heidi Alexander said the grant will  allow people to 'keep more of their hard-earned money' when buying EVs

The new ECG will hope to recreate reignite electric car demand among private buyers with the same impact. 

It will be supported by a £650million backing from the Government and will be available for the next three years. 

However, funding will remain under review, with the scheme subject to amendments or an 'early closure' with no notice should the pot of available money 'become exhausted', the DfT clarified.

Only cars up to £37,000 qualify for the grant, which rules out premium models, including every Tesla on sale.

The Government's hope is that by making the most financially attainable EVs more affordable, it will make switching to electric more appealing to private buyers rather than just those who lease EV or acquire them as company cars or through salary sacrifice schemes. 

The new scheme will also differ from the PiCG in that it has a two-tier approach that is based on sustainability criteria

How does the Electric Car Grant work? 

Unlike the PiCG, buyers will not be allocated the grant amount at the point of purchase.

Instead, manufacturers must apply to be eligible for the scheme with their sub-£37,000 cars on a 'first come, first served' basis. 

This means that motorists will not need to fill in any additional paperwork to receive the grant, with all administration handled by the car maker, dealership, and the Government.

But because manufacturers must apply for the scheme, it may take weeks for discounted EVs to begin appearing in showrooms. 

The new scheme will also differ from the PiCG in that it has a two-tier approach that is based on sustainability criteria, with only the greenest models - considered in 'band one' - receiving the full £3,750 amount. Band two cars with a lower eco rating will be eligible for a reduced amount that's not yet clarified.

Bands are determined by each brand's Science-Based Target (SBT) - an industry-wide scheme, with manufacturers needing to meet carbon scores below a specific criterion to meet the highest green standard.

British-built EVs are also likely to qualify for band one in support of UK car makers.

Transport Secretary Heidi Alexander confirmed the ECG's availability on Monday night, saying: 'The EV grant will not only allow people to keep more of their hard-earned money - it'll help our automotive sector seize one of the biggest opportunities of the 21st century.'

Car industry welcomes EV purchase incentive 

The Society of Motor Manufacturers and Traders (SMMT), which has been campaigning for increase financial purchase incentives since the PiCG was closed three years ago, said the grant is a 'clear signal to consumers that now is the time to switch'.

Mike Hawes, its chief executive, said: 'Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade. 

'This announcement is a welcome response to consistent calls from the industry for more support, which will be in addition to the substantive subsidies already provided by manufacturers.'

Simon Williams, head of road policy at the RAC, described the grant as 'just the shot-in-the arm needed to help more drivers go electric'.

He added: 'Within weeks, discounted cars should start appearing at dealerships across the country. 

'And, as the biggest savings will be given to cars with the strongest ‘green’ manufacturing credentials, drivers will be picking models that are not only better for their wallets, but better for the planet too.'

Five of the best EVs likely eligible for the grant

While any battery electric car with an RRP of £37,000 or below will be eligible for the grant, for the meantime we will not know which models will be included or the total value of the grant subsidy provided.

However, here is a list of five of the best EVs on sale currently that are available for less than £37,000 - and should become cheaper to buy within a matter of weeks.

Below is the potential start price for each model if they qualify as band one EVs eligible for the full £3,750 grant allowance. 

1. Renault 5 E-Tech - from £19,245

Current price from: £22,995

Versions under £37k: all

Range: up to 250 miles

The Renault 5 E-Tech has been the best-selling EV in the UK retail sector in the months of April and May, so this is certainly one of the cars the grant is aimed at

The Renault 5 E-Tech is a reborn version of the legendary 1980 model with battery power - and it has proved a huge success for the French manufacturer since it arrived in Britain earlier this year.

With impressive driving characteristics, a premium feel to the cabin and a more than adequate range of between 190 to 250 miles, it is the worthy reigning winner of the illustrious European Car of the Year Award.

While a starting price of £23,000 and even the top-spec Roland Garros version ringing in at less than £30,000, every version should be eligible for the grant. 

The 5 has been the best-selling EV in the UK retail sector in the months of April and May, so this is certainly one of the cars the grant is aimed at.

2. Nissan Leaf - from circa £26,250

Current price from: circa £30,000

Versions under £37k: TBC

Range: up to 375 miles

An all-new Nissan Leaf is due to hit showrooms this year. And, given it's the only mass-market EV produced in the UK, we'd be surprised if it didn't qualify for the full Electric Car Grant amount of £3,750 

An all-new Nissan Leaf is due to hit showrooms this year. And, given it's the only mass-market EV produced in the UK [since assembly of the Mini EV moved to China] at the Sunderland plant in the Northeast, it is likely to qualify for the full grant amount under domestic benefits.

Unlike the outgoing Leaf hatchback, the new model is very much a crossover with a jacked-up ride height and bulkier styling.

Prices are yet to be confirmed, but bosses have hinted it will start from around £30,000. Even mid-to-top spec models are likely to sit below the grant's £37,000 threshold.

Two battery options will be available from launch in 2025: a smaller - and cheaper - 52kWh unit offering up to 270 miles of range on a single charge and a larger 75kWh battery which ups the distance to 375 miles. 

3. Citroen e-C3 - from £18,345

Current price from: £22,095

Versions under £37k: all

Range: up to 199 miles

With a range of up to 199 miles and enough room for five adults, the practical and comfortable Citroen e-C3 supermini could become even more affordable if it qualifies for the full ECG value

There are plenty of compact EV options that should qualify for the ECG criteria, including the Dacia Spring (from £14,995) and Hyundai Inster (from £23,505). But our pick of the most attainably priced electric cars is Citroen's new e-C3, which start from £22,095.

With a range of up to 199 miles, an existing starting price a little over £22,000, and enough room for five adults, this practical and comfortable electric supermini could become even more affordable if it qualifies for the full ECG amount.

Even the entry-spec models get a 10.25-inch infotainment screen with Apple CarPlay and Android Auto connectivity, while higher trim levels - all of them falling well below the grant's £37,000 ceiling - have heated seats, a heated steering wheel and a reversing camera. 

4. Kia EV3 - from £29,255

Current price from: £33,005

Versions under £37k: EV3 Air

Range: up to 375 miles

The entry 'Air' specification of the new Kia EV3 sits under the £37,000 ECG threshold with the choice of either the 58.3kWh or 81.4kWh battery. For an electric family car, it could become a tempting option with up to £3,750 off  

Kia's latest - and smallest - model, the new EV3, looks set to steal a march on rivals in the most competitive segment of all. With every brand on the planet seemingly offering a compact SUV, Kia's EV3 is our choice of the bunch with exclusively battery power.

The entry 'Air' specification sits under the £37,000 ECG threshold with the choice of either the 58.3kWh or 81.4kWh battery. 

While the smaller battery model (starting from £33,005) offers a range up to 254 miles, the £36,005 Air with the Long Range 81.4kWh battery providing up to 375 miles on a single charge.

5 Skoda Elroq - from £27,760

Current price from: £31,510 

Versions under £37k: Elroq SE, SE-L and Edition

Range: up to 266 miles

Skoda's new Elroq is one of the standout electric family cars with a RRP low enough to qualify for the new Electric Car Grant

For family car buyers, Skoda's Elroq is another quality option. And with three models in its range likely to qualify for the ECG, a discount of up to £3,750 could make it compelling option.

It's roomy, well-equipped and has that robust Volkswagen Group build quality. While not the most entertaining to drive, its arguably excellent value against comparable rivals.

The entry Elroq SE with a 52kWh battery is the cheapest from £31,510, though this provides a maximum range of up to only 233 miles. However, the SE-L 60 and Edition 60 with the bigger 59kWh offer up to 266 miles and both sit below the grant's £37,000 cut-off for eligibility. Unfortunately, the larger 77kWh battery versions are all over the ECG's price threshold.