In a bold move to accelerate the United Kingdom’s shift toward electric vehicles (EVs) and reduce dependence on foreign supply chains, Chancellor Rachel Reeves is set to unveil a sweeping £1.5 billion package in the Budget on November 26, 2025. This comprehensive plan includes a hefty £1.3 billion boost to the government’s Electric Car Grant scheme, an extra £200 million for charging infrastructure, and a first-of-its-kind strategy to ramp up domestic production and recycling of critical minerals essential for modern technology.
The Electric Car Grant scheme, which started in July 2025, has already helped over 35,000 drivers make the leap from petrol and diesel engines to electric vehicles by offering households up to £3,750 off the price of an eligible EV. The new funding will triple the scheme’s value and extend it to the 2029/30 financial year, aiming to entice even more motorists to go electric as the UK works toward its goal of banning the sale of new petrol and diesel vehicles by 2035.
“We’re backing the switch to electric with a £1.5 billion package to cut upfront costs, accelerate chargepoint rollout, and unlock jobs and opportunities—making it easier for people to go green and boosting growth across the country,” a government source told The Telegraph. The move comes at a critical time, as UK EV sales, while rising, still fall short of official targets. The government hopes the enhanced grant will encourage hundreds of thousands of drivers to make the switch in the coming years.
But not everyone is convinced the grant alone will create new demand. According to a recent study by New AutoMotive, a non-profit supporting the UK’s EV transition, the scheme has yet to expand the market for electric vehicles. “It isn't yet clear that it's prompting consumers to consider buying cars that they wouldn't have gone ahead and bought anyway,” said David Farrar, policy manager for New AutoMotive, as reported by the BBC. In September, EVs covered by the scheme made up 23.8% of new registrations—the same share as before the grant was introduced.
Still, the government is betting that the mix of upfront discounts and improved charging infrastructure will make the difference. The extra £200 million for charging points is expected to support the creation of thousands of new chargepoints across the UK, with a focus on making charging more accessible for people without off-street parking. Data from Zapmap shows there are already nearly 87,000 public chargepoints in about 44,000 locations, including supermarket car parks and lamppost chargers. The government will also launch a consultation to make it easier and cheaper for those without driveways to charge their cars at home.
“The proposed funding will support the creation of thousands of chargepoints and provide extra resources for local authorities to ramp up charging infrastructure on local streets—making it easier for everyone to access reliable charging, including those without off-street parking,” the government said in a statement to the BBC.
However, the generous subsidies come with a potential catch: a new pay-per-mile tax for EV owners is under consideration, with a possible start date in 2028. The measure, reportedly a 3p-per-mile charge, is intended to replace lost revenue from declining petrol and diesel fuel duty, which brought in nearly £25 billion in the 2024/25 financial year. “Fuel duty covers petrol and diesel, but there's no equivalent for electric vehicles. We want a fairer system for all drivers,” a government spokesperson told the BBC. While details are still being finalized, the move has sparked debate about the balance between encouraging EV adoption and ensuring fiscal responsibility.
Critics from the opposition have not held back. Richard Holden, the shadow transport secretary, called the plan “madness,” stating, “Handing out £1.5 billion in EV subsidies while hard-working taxpayers are squeezed dry is madness. Ordinary families are facing increased taxes and spiralling inflation under Labour, yet the Government’s priority is handing out discounts on new electric cars.” On the other side, Labour Party chairwoman Anna Turley MP countered that the Conservatives have “zero credibility” on the economy, arguing that a Tory government would “take us back to austerity” with £47 billion of cuts.
Prime Minister Sir Keir Starmer, attending the G-20 summit in Johannesburg, emphasized the broader vision behind the Budget. “I want the UK to be the best place to do business,” he told reporters. “I’m optimistic about the future and I want to create the conditions in which we enable business to generate wealth and do as well as humanly possible in the United Kingdom.” Starmer’s remarks reflect a drive to make Britain more attractive to investors, particularly as concerns about economic growth and inflation persist.
Beyond EVs, the Budget will also address Britain’s dependence on foreign sources for critical minerals—materials like lithium, nickel, and copper, which are essential for electric vehicles, smartphones, wind turbines, and even F-35 fighter jets. China currently dominates global production, controlling 70% of rare earth mining and 90% of refining. The UK currently produces just 6% of its mineral needs domestically.
Under the new strategy, the UK aims to produce 10% of its raw material needs domestically and 20% through recycling by 2035. Demand for copper is expected to nearly double, and lithium demand is projected to soar by 1,100% over the next decade, according to government estimates. The government plans to produce at least 50,000 tonnes of lithium in the UK in the next ten years, with companies like Cornish Lithium aiming for 25,000 tonnes annually by 2030. To support these efforts, £50 million will be invested in domestic minerals projects.
“For too long, Britain has been dependent on a handful of overseas suppliers, leaving our economy and national security exposed to global shocks,” Starmer said. “That is why we are taking decisive action to change that, boosting domestic production, ramping up recycling, and backing British businesses with the investment they need to compete on the international stage and drive down the cost of living for people at home.”
Jeff Townsend, chief executive of the Critical Minerals Association, welcomed the move, telling The Mirror, “We welcome the Government’s renewed commitment to securing the critical minerals that underpin the UK’s Industrial Strategy and future economic resilience. This strategy marks an important and timely step forward.”
As the Budget approaches, all eyes are on Reeves and Starmer to see whether these ambitious measures can deliver on their promises—spurring green growth, securing supply chains, and keeping Britain competitive on the global stage. The stakes are high, and the next chapter in the UK’s electric revolution is about to be written.
