EVDC Policy Pulse UK - August

1) New Electric Car Grant (ECG)

The government’s £650 million Electric Car Grant is live for EVs priced under £37,000. It offers two tiers: £3,750 for models meeting stricter sustainability criteria, and £1,500 for others.

As of mid-August, no car has yet qualified for the full £3,750. All approved models (Citroën, Renault, Nissan, Vauxhall, Cupra, Peugeot, Volkswagen) are currently in the £1,500 band.

Fleet take: build £1,500 into your lease quotes today, and monitor the Band 1 eligibility list closely.

2) Vehicle Excise Duty (VED)

Since 1 April 2025, EVs are no longer exempt from road tax.

• £10 in year one for new zero-emission cars.
• £195 per year thereafter.
• Cars priced over £40,000 pay a further £425 supplement in years two to six, totalling £620 annually.

Fleet take: Whole-Life Cost models must now include VED explicitly. Premium EVs see the biggest shift.

3) Commercial EV Grants

The Plug-in Van and Truck Grant has been extended through 2027, worth:

• Up to £2,500 off small vans
• £5,000 off large vans
• £16,000 off small trucks
• £25,000 off large trucks

Plus, £63 million has been earmarked for new charging infrastructure.

Fleet take: still one of the strongest incentives available for fleets moving vans and HGVs to electric.

4) Insurance and Salvage Rules

In May 2025, the ABI updated its Salvage Code with EV-specific standards:

• Distinguishing structural vs non-structural battery damage.
• Mandatory assessor training for high-voltage systems.
• Severe battery damage may trigger automatic write-off.

Fleet take: improved safety and clarity, but check that your repair network is EV-certified.

5) Range-extender EVs and the 2030 Ban

The UK’s 2030 phase-out of petrol and diesel cars does not automatically extend to range-extender hybrids. These may remain on sale until 2035, though final rules are still being defined.

Fleet take: expect some manufacturers to maintain REX models, but be wary of long-tail investments in borderline tech.

6) Heads-up on Mileage Reimbursement

HMRC’s Advisory Electric Rate is 7p per mile today. From 1 September 2025 this splits: 8p per mile for home charging and 12p per mile for public charging.

Fleet take: update reimbursement policies now — and consider formalising a “public charging uplift” for drivers without home access.

Sources

• GOV.UK — Electric Car Grant guidance, Aug 2025
• GOV.UK — Vehicle tax for electric and low-emissions vehicles
• HMRC — Advisory Fuel & Electric Rates, June 2025 update
• Department for Transport — Plug-in Van and Truck Grant
• ABI — Salvage Code of Practice, May 2025 update
• Zapmap — UK Public Charging Price Index, July 2025
• Ofgem — Energy price cap Q3 2025

👉 Want to know what this means for your fleet? Run the numbers instantly with our Fleet Savings calculator (UK) and check our UK methodology for all assumptions and sources.