Car sales decreased in July, as consumers postponed purchases, waiting for further information on the electric car incentive grant.
UK's Electric Car Grant Boosts Electric Vehicle Sales
The UK automobile industry experienced a slight setback in July 2025, with a 5% decrease in new car registrations compared to the same month the previous year. This marked the end of a two-month growth period in the industry, according to the Society of Motor Manufacturers and Traders (SMMT). However, the industry remains optimistic due to the recent announcement of new government- and manufacturer-backed discounts for electric vehicles (EVs).
The UK's new Electric Car Grant (ECG) offers a £1,500 discount on selected electric vehicle models that meet sustainability manufacturing standards and price caps (under £37,000). Eligible cars include models from Citroën, Vauxhall, Renault, and Nissan, among others. The grant aims to accelerate EV adoption by making electric cars more affordable, supporting industry growth and jobs, backed by a £650 million government fund running through 2028-2029.
Car brands are actively embracing the ECG by applying the discount at the point of sale. Vauxhall's entire electric range is officially eligible, and the brand is promoting substantial savings alongside the grant. Similarly, Citroën models are being marketed with automatic £1,500 price cuts. The grant complements the UK's Zero Emission Vehicle Mandate, giving manufacturers regulatory certainty and encouraging investment despite global economic challenges.
Key points about eligibility include the grant applying to vehicles priced under £37,000 and eligible models needing to meet high environmental and manufacturing sustainability standards. Nearly 70 models are expected to qualify as government approval continues.
The growth in electric car sales slowed dramatically in July as customers waited for clarity on which EVs would be eligible for the ECG. However, the uptick in demand for EVs over the first half of 2025 was 34.6%. Registrations of pure-EVs were up 9.1% in July compared with the same month last year, to 29,825 units.
The ongoing government support and manufacturer cooperation indicate a strong push to make electric vehicles more accessible and accelerate the UK’s transition to zero-emission transport. Some cars, including the Leapmotor C10, Hyundai Inster, and GWM Ora 03, are now available with up to £3,750 off, making them even more attractive to potential buyers.
As more models become eligible for the ECG, it is expected that the UK will register 1.9 million cars in 2025, with a significant portion being electric vehicles. The SMMT emphasizes the importance of accelerating uptake of EVs over the remainder of the year to meet the Zero-Emission Vehicle Mandate's requirements.
References:
- The Guardian
- BBC News
- Autocar
- Car Dealer Magazine
- What Car?
- The UK's Electric Car Grant, with discounts of up to £1,500 on specific electric cars, is playing a significant role in the integration of electric vehicles in the lifestyle and finance sectors, making them more affordable and attractive for consumers.
- The fusion of technology and finance is apparent in the UK's transition to zero-emission transport, as the government and car manufacturers cooperate to offer discounts on electric vehicles, lowering the financial barrier for consumers and fostering the growth of the technology sector, particularly in the automobile industry.
