Drivers are set to benefit from a major extension of a vital Government scheme which hopes to offer the “greatest value for money” for millions of Britons.
The £120million plug-in van grant scheme has been renewed until April 2026 in a bid to encourage more drivers to buy a greener mode of transport.
Future of Roads Minister Lilian Greenwood confirmed earlier this week that the Plug-in van grant scheme, which was due to expire in April, would now be extended for another year.
The extension will provide financial support of up to £2,500 for small vans, up to 2.5 tonnes and up to £5,000 for larger vans up to 4.25 tonnes.
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The plug-in van grant offers motorists up to £5,000 towards an electric vehicle
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The scheme has already helped sell over 80,000 electric and zero-emission vans since its launch in 2012, according to the Department for Transport.
Greenwood, who is a Labour MP for Nottingham South, said: “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.
“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 Government has also extended grants for taxi drivers, offering £4,000 towards the purchase of zero-emission black cabs. Additionally, the Plug-in wheelchair accessible vehicle grant cap is being increased from £35,000 to £50,000.
As part of the extension, motorcyclists will also continue to receive a £500 grant for electric motorbikes for another year.
Chris Ashley, Net Zero lead at the Road Haulage Association, welcomed the extension, saying that it comes at a crucial time “when sales of EV vans are in danger of waning”.
Similarly, Matthew Dillon, head of commercial vehicles at Ayvens, called the extension a “positive step” that reinforces the crucial role financial incentives play in helping commercial vehicle fleets transition to zero-emission alternatives.
He also welcomed the removal of additional driver training requirements for heavier alternative-fuelled vehicles. “However, while these announcements demonstrate important progress, many fleet operators may still wait for further clarity following the consultation,” Dillon added.
Christopher Thorneycroft-Smith, co-founder of Aegis Energy, also welcomed the extension but highlighted the remaining challenges for driver adoption as being a key barrier.
In response, the Government explained that the transition to electric vehicles continues at pace, with over 382,000 electric cars sold in 2024, up a fifth on the previous year.
The grants aim to encourage more drivers to make the switch to electric ahead of the 2035 petrol and diesel car date. This runs alongside the Zero Emission Vehicle mandate which requires brands to have at least 28 per cent of sales come from electric cars by the end of the year.
While extending the grant has been a welcome move by the industry, the DfT noted that all plug-in vehicle grants will remain under review to deliver the “greatest value for money” for taxpayers and that grants may close without notice.
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Labour has extended the plug-in grant for vans until 2026GETTYMike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), previously explained: “The van market has enjoyed a bullish performance over the past two years but, amid a tough economic environment, businesses are under pressure.
“It means action is needed to drive fleet renewal and back the industry which has invested massively to produce new EV models.
“The Zero Emissions Vehicle mandate review must, therefore, deliver workable regulation that reflects market realities, and ensure infrastructure rollout that makes fleet decarbonisation a commercially viable, compelling proposition.”