The UK government is doubling down on its commitment to electric vehicles by extending the Plug-in Van Grant, injecting an additional £120 million into the initiative. This move, announced last month by the Department for Transport (DfT), will keep the grant active for another year, stretching to April 2026, and offering a financial boost to businesses and fleets transitioning to zero-emission vans (ZEVs).
The scheme offers grants of up to £2,500 for smaller ZEVs (up to 2.5 tonnes) and up to £5,000 for larger models (up to 4.25 tonnes). This extension falls under a broader £2.3 billion plan to decarbonize road transport, with roughly half of that sum earmarked for the ongoing rollout of zero-emission buses.
With the UK setting a world-leading target to end the sale of new petrol and diesel vans by 2035, the government is keen to offer enough incentives to meet the ambition. This means having the greenest models make up 16% of all new van registrations this year. This forward-thinking approach is significantly ahead of what the natural market might dictate.
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), commented on encouraging the uptick in zero-emission vehicles but noted that more support is needed. “Zero emission uptake is positive but still struggles to match the ambition of regulation. The ongoing Plug-in Van Grant provides a lifeline, although we still need support to bolster operator confidence, boost demand and deliver decarbonisation.”
The Plug-in Van Grant has already had a positive impact, supporting the purchase of over 80,000 ZEVs since its inception in 2012. The funding helps bridge the cost difference between traditional diesel vans and their ZEV counterparts, which are presently more expensive but offer substantial reductions in carbon emissions.
Future of Roads Minister, Lilian Greenwood, also emphasized the government’s dedication to the transition, stating, “We are making it easier, faster and cheaper for people to switch to electric vehicles. 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.”
Eurig Druce, Managing Director of Stellantis UK, also highlighted the positive impact. “The extension of the Plug-in Van Grant to 2026, and the removal of the unnecessary red tape around additional driving licence requirements for electric vans, is welcome news for UK businesses looking to take advantage of the environmental and cost benefits of electric vans.”
The Plug-in Van Grant offers tiered financial support, varying based on the size and specifications of the electric van:
-
Small Vans: These vans, with a gross vehicle weight (GVW) of under 2,500 kilograms, are eligible for a grant covering 35% of the purchase price, up to £2,500, provided they emit CO₂ emissions below 50g/km and have a zero-emission range of at least 60 miles.
-
Large Vans: Eligible for a grant covering 35% of the purchase price, up to £5,000. These vans must have a GVW between 2,500 kg and 4,250 kg, and meet the same emission and range criteria as small vans.
-
Heavier Vehicles: Some electric trucks and vans with a GVW exceeding 4,250 kg may qualify for a grant of up to £16,000, limited to 20% of the purchase price.
To qualify for the grant, vehicles must adhere to specific standards. Emission standards require CO₂ emissions below 50g/km with a zero-emission range of at least 60 miles. Weight specifications range from under 2,500 kg for small vans to over 4,250 kg for heavier models. The initiative only applies to vehicles approved by the government, with no eligibility for aftermarket conversions. Also, the vehicle must be manufactured or converted to electric power before its first registration.
The grant is typically applied directly at the point of purchase by manufacturers or dealerships, which then handle the application process. Buyers are advised to confirm that their chosen vehicle is an eligible model.
Christopher Thorneycroft-Smith, Co-founder of Aegis Energy, which provides energy transition infrastructure for vans and commercial vehicles, expressed his approval of the initiative. “We are delighted that Government has decided to extend the plug-in grant for electric vans and remove additional training requirements, making the switch to zero emission vehicles more accessible for fleet operators.“It’s a definitive move for the sector which many industry bodies have lobbied hard for over the last year.“However, we also know how important it is that we address the gap in reliable, accessible charging infrastructure for fleet operators.“Alongside reducing upfront vehicle costs, this is another key barrier which must be tackled to truly accelerate the transition.”
The Plug-in Wheelchair Accessible Vehicle Grant cap is also seeing a significant increase. It is increasing from £35,000 to £50,000, widening the range of available models and making it easier for disabled passengers to travel with peace of mind.
Fleet management and leasing specialist Ayvens highlighted tools, such as a Total Cost of Operation + Insights tool, that can help fleets identify the most effective vehicles for electrification. This tool takes into account driver behavior and journey patterns to help in decision-making.
Matthew Dillon, Head of Commercial Vehicles at Ayvens, stated that the increased funding is beneficial, “The government’s confirmation of a one-year extension to the Plug-in Van Grant is a positive step, reinforcing the crucial role financial incentives play in helping commercial vehicle fleets transition to zero-emission alternatives.”
“The grant extension sends a strong signal to fleet operators running the UK’s most mission-critical fleets that the Government is committed to supporting their decarbonisation efforts. As fleet decarbonisation is happening in gradual stages, businesses must adopt EVs where feasible while also exploring ways to improve journey efficiency and minimise downtime.”
As part of efforts to reduce red tape and ease the transition, the DfT is also removing the need for extra driving training that was only necessary for zero-emission vans, not their petrol or diesel counterparts. This measure is designed to cut costs and simplify hiring for businesses operating electric vans.
Dillon acknowledged this change, and said that it showed progress, “Another welcome announcement is the removal of the additional driver training hours required to operate heavier alternative-fuelled vehicles. This is a step in the right direction, addressing some of the uncertainty in the industry and giving fleet operators greater confidence to explore the operational capabilities of electric commercial vehicles up to 4.25 tonnes.”
The extension of the Plug-in Van Grant through April 2026 offers a significant opportunity for businesses to embrace electric vans. By understanding the eligibility criteria and the financial benefits on offer, firms can make informed decisions and boost the move to electric vehicles.
