Drivers across the United Kingdom are on the cusp of a significant shift in the electric vehicle (EV) landscape, as the government prepares to inject an additional £1.3 billion into the Electric Car Grant (ECG) and extend the scheme by another year. This move, expected to be officially announced in the Budget on November 26, 2025, forms the centerpiece of a £1.5 billion package designed to accelerate the nation’s transition to zero-emission vehicles and bolster the UK’s net zero ambitions.
Since its launch in July 2025, the Electric Car Grant has already helped more than 35,000 drivers make the leap to EVs by reducing the upfront cost by as much as £3,750 for new, sustainable vehicles priced under £37,000. While the size of the discount varies according to the sustainability of the vehicle, the scheme’s impact has been widely acknowledged by both industry leaders and government officials. The additional funding is set to further slash prices, encourage wider adoption, and stimulate growth in the EV sector.
But the government’s plans don’t stop at making EVs more affordable. In a bid to address one of the biggest barriers to EV ownership—charging accessibility—the Budget is also expected to unveil an extra £200 million to accelerate the rollout of chargepoints across the UK. This new funding builds on the £400 million already committed during the Spending Review, bringing the total investment in public charging infrastructure to £600 million. According to official figures, there are already nearly 87,000 public chargepoints available nationwide, but the new cash injection is intended to support the creation of thousands more, particularly in local communities where on-street charging options remain limited.
Recognizing the challenges faced by households without off-street parking, the Chancellor is set to publish a consultation on Permitted Development Rights. This initiative aims to make it easier and cheaper for people without driveways to charge their vehicles, potentially transforming the EV experience for millions of urban and suburban residents. The government has also announced a £25 million scheme to help local authorities provide discreet cross-pavement channel charging solutions, making home charging more accessible for those who previously found it out of reach.
Industry leaders have welcomed the government’s ambitious package, but they have also sounded notes of caution. Vicky Read, chief executive of ChargeUK, said, "The move to EVs is already accelerating. But to really put a rocket under this transition, access to affordable vehicles and widespread, cost-effective charging at home, near home and on the go is absolutely vital." She emphasized the importance of converting government commitments into concrete action and warned that rising business costs could jeopardize billions in investment if not addressed.
Edmund King, president of the AA, echoed these sentiments, highlighting that the AA UK EV Readiness Index currently stands at 47.5 out of 100, reflecting that the cost of new EVs continues to deter some potential buyers. "The initiatives to boost EV take up are going in the right direction but we just hope that speculation about EV ‘pay as you go’ doesn’t stall this progress. Drivers accept that EV owners should pay their way but the timing of current speculation about a scheme that may be introduced in three years isn’t really helping. Ultimately, we probably need a fundamental review of all motoring taxation to set it on a fair basis that doesn’t discriminate against rural and disabled drivers," King said.
Alongside the positive headlines, the pre-Budget briefings have also brought to light a more controversial element: the proposed introduction of a pay-per-mile tax on electric vehicles. As reported by several outlets, this tax is expected to be announced by Chancellor Rachel Reeves as a way to address a projected £40 billion revenue shortfall caused by the shift away from fuel duty and emissions-based Vehicle Excise Duty (VED). Under the plan, EV drivers would pay 3p for every mile traveled, potentially adding £300 annually for those covering an average of 10,000 miles, on top of the existing £195 standard rate VED. The Treasury estimates that this measure could raise £1.8 billion by 2031.
However, industry voices and consumer advocates have raised concerns that introducing such a tax at this stage could undermine the momentum generated by the ECG and deter would-be EV adopters. Ginny Buckley, chief executive of Electrifying.com, warned, "If ministers press ahead with pay-per-mile, they must also address the long-ignored issue of fuel duty — frozen for more than a decade — to make sure all drivers are treated fairly during the transition to electric." She also questioned the practicalities of implementing a pay-per-mile system, asking whether it would require black boxes in cars to monitor mileage and insisting that drivers deserve clarity before any policy is enacted.
Further complicating the picture, independent research by New AutoMotive has found that the ECG has had only a limited immediate impact on EV market share. Their analysis showed that 23.8% of new registrations in September 2025 were battery electric vehicles—a figure unchanged from before the grant’s introduction. David Farrar, policy manager for New AutoMotive, noted, "It isn't yet clear that it's prompting consumers to consider buying cars that they wouldn't have gone ahead and bought anyway." This finding has fueled debate about whether financial incentives alone are sufficient to drive a mass-market shift to electric vehicles.
Other industry leaders have urged the government to adopt a more holistic approach. Tanya Sinclair, CEO of Electric Vehicles UK, commented, "It’s positive to see fresh investment in electric cars and chargepoint deployment, as we know clear policy signals work. But funding alone won’t accelerate the market. The government’s priority now is consistency: a joined-up approach to vehicle taxation and incentives that gives drivers confidence their next car should be electric." Delvin Lane, CEO of InstaVolt, added, "The Government must also carefully review any new policy proposals to ensure that any new taxes or changes don’t inadvertently make it harder for people and businesses to choose an EV."
John Lewis, CEO of char.gy, highlighted the importance of equitable infrastructure investment: "Additional funding for local charging infrastructure is exactly what’s needed to make the EV transition fair for everyone. For the millions of drivers without a driveway, reliable on-street and neighbourhood charging isn’t a nice-to-have, it’s essential."
Meanwhile, the government has committed to reviewing the rising costs of public EV charging, with a report due by Autumn 2026. This review will examine the impact of energy prices and other cost contributors, with the aim of identifying options to lower costs for consumers. The EV industry has long called for a reduction in VAT on public charging to match the lower rate applied to home electricity, a change that could make public charging more affordable for all drivers.
Transport Secretary Heidi Alexander told the BBC, "This is an investment in the country's future... and the good quality manufacturing jobs associated with that," citing the production of the Nissan Leaf in Sunderland as an example of the economic benefits tied to the EV transition.
While the government’s latest package of measures has been broadly welcomed, the road ahead remains complex. The interplay between incentives, infrastructure, taxation, and consumer confidence will ultimately determine whether the UK can deliver on its promise of a cleaner, greener transport future. For now, drivers and industry alike are watching closely, eager to see whether these bold commitments will translate into real-world change.
