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Electric cars: taxes and purchase incentives
In order to completely phase out sales of new petrol and diesel cars by 2035, the UK government has had to offer more electric car incentives to reach its goal. The question is, are tax benefits and grants enough to attract buyers? Find out more about current offers below.
Electric car tax benefits
For over a decade, the UK government has implemented various measures to encourage people to make the switch from internal combustion vehicles to electric ones, including electric car tax relief and benefits.
First of all, electric car owners are currently exempt from paying Vehicle Excise Duty, more commonly referred to as road tax. The tax is levied for the use of all public roads across the nation. The flat rate for road tax as of 2024 is £190 for cars registered from 2017 onwards, and it can be significantly higher or lower for older cars.
How much will electric car tax be in 2025
As the pessimistic saying goes, all good things must come to an end. The road tax incentive introduced in 2020 will be no more in April 2025. From the 1st April, EV drivers will be required to pay the flat rate for VED. The good news is that in the first year, they will only need to pay £10.
Purchasing grants
Grants for purchasing electric vehicles or EV equipment are another classic government incentive for electric cars. In the UK, there are grants for purchasing low emission vehicles, charging stations, and infrastructure.
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Below is an overview of the grants that are available at the time of writing:
- On-street residential chargepoint scheme
This grant is directed towards local authorities but it aims to make EV infrastructure more accessible to residents without off-street parking. The scheme provides a maximum of 50% of the capital costs for charging infrastructure projects and grants are capped at £200,000.
- Electric vehicle chargepoint grant
This grant is for renters and flat owners who want to install EV charge point sockets at the property. It offers them up to 75% off the cost to buy and install a socket, up to a maximum of £350. The applicant must have an eligible vehicle on the property, as well as private off-street parking.
The increase in charging stations and infrastructure across the country has enabled more people to own and consider purchasing electric vehicles, as well as reduce the costs of maintaining them. If you want to know more about electric vehicles and the pros and cons of using them, check out this informative guide: How do electric cars work.
- Plug-in grant
Unfortunately, the government recently ended subsidies for electric cars under the plug-in grant, which has been running since 2011. However, it’s still possible to get an up to 35% discount on some electric motorcycles, vans, trucks, taxis, and wheelchairs. The seller or dealership applies for the grant and then these savings are automatically transferred to the customer.
EV maintenance
One main advantage of modern EVs is that they generally require less maintenance than petrol or diesel cars. However, when something does get damaged and need repairing, the costs can be much higher.
For example, while your standard car battery can cost below £100, the average electric car battery costs just below £90 per kWh, meaning that you are typically looking at spending thousands on a replacement. On the plus side, the batteries are expected to last longer than their counterparts as they are made of more advanced materials. Don’t forget to consider the cooling system and the price of a car engine control module vs electric car control units.
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Maintenance tips for electric cars:
- Find the right balance when charging
Don’t overcharge the battery or leave it with a low charge for extended periods as this will cause it to deteriorate quicker. Instead of charging it to 100%, try to keep it between 30% and 80%.
- Park in a garage if you can
When parking, you should consider where your car will be best sheltered from extreme cold and hot weather conditions. These temperatures can have a significant impact on battery performance over time.
- Be careful when cleaning the charge port
The port can accumulate dust and dirt over time, preventing charging. You can try gently brushing away contaminants from the contacts with a cotton bud or, for more stubborn dirt, use an electrical contact cleaner.
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