Chancellor Rachel Reeves will announce an additional £1.5 billion in subsidies for electric vehicles (EVs) at next week's budget, extending the scheme until 2030. The package includes £1.3 billion for purchase grants and £200 million for charging infrastructure, aiming to support the transition to clean cars.
Industry experts welcomed the funding but expressed concern over mixed signals from the Treasury. A separate consultation on a pay-per-mile tax, expected to add £276 annually to EV ownership costs, could deter buyers. Ginny Buckley of electrifying.com said the policy is 'really confused,' noting that incentives are undermined by the threat of mileage taxes.
The current grant scheme, launched with £400 million earlier this year, offers up to £3,750 off new EVs and has already helped 35,000 drivers. It was due to expire in two years but will now be topped up and extended to 2029-2030. The additional charging points aim to address range anxiety, a key barrier for prospective owners.
Reeves will also launch a review into on-street charging costs, which currently attract 20% VAT compared to 5% for home charging, penalising poorer drivers without driveways. The review will report next autumn. Meanwhile, pressure mounts to increase fuel duty, cut by 5p in 2022, to make EVs more attractive.
