UK’s new Electric Car Grant and Science-Based Targets explained

The UK government is launching a £650 million Electric Car Grant (ECG) scheme to reduce the upfront cost of new electric vehicles.
The grant offers up to £3,750 off electric vehicles priced under £37,000. It’ll come into effect Wednesday, July 16, 2025.

The grants are tiered based on manufacturers’ sustainability efforts and the emissions associated with vehicle production. Vehicles placed in Band 1 will qualify for discounts of up to £3,750, while those in Band 2 can receive up to £1,500. Vehicles that do not meet the minimum sustainability standards will not be eligible for any grant.
You won’t need to complete any paperwork to get the grant, car manufacturers and dealers are responsible for all administrative steps.

To qualify, manufacturers must have a Science-Based Target (SBT) on greenhouse gas emissions.
Vehicles are assigned to different bands based on their sustainability criteria, affecting the grant amount. This is all calculated based on: Net zero targets of the manufacturer. Sustainability of production, which includes: • Battery production emissions (weighted at 70%). • Vehicle assembly emissions (weighted at 30%). • The carbon intensity of electricity grids in countries where production stages occur. Vehicles must also meet minimum technical and warranty standards to be eligible.

Science-Based Targets (SBTs) are greenhouse gas emissions reduction goals that companies set in line with climate science to help limit global warming to well below 2°C, ideally 1.5°C, as outlined in the Paris Agreement.
These targets require businesses to address direct emissions (classed as Scope 1 and 2) as well as supply chain emissions (Scope 3) and are designed to drive meaningful decarbonisation rather than relying on offsetting. The SBTi (Science Based Targets initiative) provides guidance, technical support, and independent validation to ensure targets are robust and meet the latest scientific criteria. Many companies are also adopting net-zero targets for the long term, building on their short-term SBTs. Setting SBTs allows companies to play a significant role in combating climate change and demonstrates a clear commitment to sustainability. They not only help reduce emissions globally but also improve a company’s reputation and prepare it for the transition to a low-carbon economy.

The Science Based Targets initiative (SBTi) is an organisation that supports businesses reducing their carbon impact.
Founded in 2015, SBTi helps companies set and achieve emission reduction goals. They provide guidance for target-setting, technical assistance, and independent validation for corporate climate targets. They also develop sector-specific standards for high-emission industries like the automotive sector. The SBTi recently updated their Automotive Sector Net-Zero Standard with stricter requirements, which require automakers to increase sales share of low-emission vehicles and introduce detailed methodologies for calculating lifecycle emissions. These Standards are primarily aimed at traditional automakers transitioning from fossil fuel-powered vehicles to cleaner technology, while electric-only manufacturers have different emissions goals and trajectories based on the nature of their business.

As of this article's publication, manufacturers were still awaiting confirmation on which band their vehicles would fall into and the corresponding grant amounts available through the new framework. We’ll update it when we know though.
Major groups like Volkswagen, Renault, and Ford are signed up to the SBTi but have not confirmed eligibility for specific electric models. Some, like Polestar and Tesla, support the SBTi but are not currently signed up it, because the SBTi framework does not distinguish between traditional carmakers and companies that already produce only electric vehicles, so its targets are not as relevant for pure electric vehicle companies.

Manufacturers can begin applying for the grant on July 16, on a first-come, first-served basis. A digital system for logging eligible electric sales will launch on August 11.
Buyers who purchase vehicles before official approval of their car models will not be eligible for retroactive grants.

Alongside the new grant, the government have also announced as £25 million fund to support local authorities in deploying cross-pavement charging tech for households without off-street parking.
This is joined by an £8 million fund to electrify ambulance and medical fleets across 200 NHS sites. The government will also update electric charging hub signage, making it visible on motorways and major A-roads.