Government expands grants for electric vans, taxis, and bikes

The UK government has announced a £120 million investment to accelerate the adoption of electric vehicles (EVs), particularly targeting businesses, taxi drivers, and individual motorists. The funding, part of a larger £2.3 billion initiative, aims to make the transition to zero-emission vehicles easier, faster, and more affordable.

On February 25, 2025, Future of Roads Minister Lilian Greenwood confirmed the extension of the Plug-in Van Grant for another year. This grant provides financial support for van drivers and businesses, offering up to £2,500 for small vans (up to 2.5 tonnes) and £5,000 for larger vans (up to 4.25 tonnes).

As part of ongoing efforts to improve EV infrastructure, various cities are expanding their charging networks to accommodate the growing number of electric vehicles. For instance, Birmingham is adding 560 new on-street charge points to support local taxi drivers and businesses making the switch to electric transport.

Lilian Greenwood, Future of Roads Minister, stated:

"From van drivers and businesses, to drivers with accessibility needs, bikers and cabbies, today we are making it easier, faster and cheaper for people to switch to electric vehicles."

Cutting Red Tape for Businesses

The government is also taking steps to remove regulatory barriers that have made it difficult for businesses to switch to electric vans. Currently, zero-emission vans are often heavier than their petrol or diesel equivalents, requiring additional driver training. Under the new policy, this requirement will be eliminated, reducing costs and making it easier for businesses to hire qualified drivers.

Since its launch, the Plug-in Van Grant has contributed to the sale of over 80,000 electric vans, supporting small businesses and large fleets in transitioning to cleaner transport. The latest funding ensures that more businesses can take advantage of the grant and reduce their operational emissions.

Support for Taxi Drivers and Wheelchair-Accessible Vehicles

Taxi drivers are also set to benefit from the latest funding extension. The government is offering a £4,000 grant to purchase zero-emission black cabs and other electric taxi models. This measure aims to provide cleaner and more comfortable rides for passengers while reducing pollution in urban areas.

In addition, the Plug-in Wheelchair Accessible Vehicle Grant cap has been increased from £35,000 to £50,000. This change expands the range of eligible vehicles and improves transport accessibility for disabled passengers. The decision aligns with the government’s broader initiative to ensure that the shift to electric mobility is inclusive.

Boost for Electric Motorbikes and Private EV Ownership

Motorcycle enthusiasts will continue to receive a £500 grant for purchasing electric motorbikes, as the government extends financial incentives for another year.

The broader transition to electric vehicles is gaining momentum, with over 382,000 electric cars sold in 2024, marking a 20 percent increase from the previous year. The growing market includes one in three used electric cars priced under £20,000, and 21 new models available for under £30,000. These price reductions, combined with government incentives, make electric vehicles a more viable option for consumers.

Expansion of the UK’s Charging Network

To support the rising number of EV owners, the UK government has invested in expanding the public charging infrastructure. There are now 74,000 public EV chargers across the country, with 20,000 new chargers added in the past year alone.

Lilian Greenwood, Future of Roads Minister, stated:

"By making the transition to zero emissions a success, we’re helping to drive growth all over the UK, putting more money in people’s pockets and rebuilding Britain to deliver our Plan for Change."

The 2024 Autumn Budget included a £200 million investment to further develop the country’s charging network. An additional £6 billion in private sector investment is also expected to accelerate this expansion, ensuring that charging stations remain accessible, efficient, and user-friendly.

Strengthening Zero-Emission Vehicle Incentives

As part of efforts to encourage EV adoption, the government has maintained generous Zero Emission Vehicle (ZEV) incentives under the Company Car Tax regime. Additionally, new research shows that electric vehicle ownership is becoming more economical, with drivers saving up to £750 per year by primarily charging at home instead of using petrol.

With advancements in EV technology, the average range of a new electric car has reached 236 miles, covering approximately two weeks of driving for the average motorist. Meanwhile, electric vehicles produce one-third of the greenhouse gas emissions compared to petrol cars over their lifetime.

As the UK continues its push toward a cleaner transport system, the government has engaged in consultations with car manufacturers on reinstating the 2030 phase-out deadline for new petrol and diesel cars. This move aims to reaffirm the country’s leadership in sustainable mobility and meet its long-term environmental commitments.