By FREDA LEWIS-STEMPEL, MOTORING REPORTER
The Government's discounts for electric vans and trucks has been extended for business and fleet operators looking to transition to EVs.
The Plug-In Van and Truck Grant extension arrives as part of Labour's £650million scheme to make it cheaper to buy EVs, which has also seen the introduction of the controversial Electric Car Grant.
The grant, which already offer discounts of up to £2,500 for small vans, £5,000 for large vans, £16,000 for small trucks, and £25,000 for large trucks, were due to lapse but have been confirmed to remain until at least another two years.
The Government says the exact levels for the 2026/27 financial year will be confirmed in due course. The electric van grants run alongside electric Heavy Goods Vehicle (HGV) grants.
The Government's decision comes after UK battery-electric van registrations rose sharply in July, according to figures from the Society of Motor Manufacturers and Traders (SMMT), with a 72.6 per cent increase between July 2024 and 2025.
However, electric vans account for just 8.8 per cent of total registrations in the year to date - well short of the 16 per cent required under rules imposed by the Zero Emission Vehicle (ZEV) mandate.
The Government has confirmed it will extend its Plug-In Van and Truck Grant as part of Labour's £650 million scheme to make it cheaper to buy EVs. It will remain through 2027 at least
Announcing the van and truck grant, Future of Roads Minister Lilian Greenwood said: 'Extending these grants is another decisive step to power Britain's transition to cleaner transport while backing the industries that keep our economy moving, driving new investment in EVs and helping businesses cut costs and expand.'
Off the back of July's SMMT data, the industry body said that the gap between the government-mandated sales targets and current uptake needs to be addressed and called for 'measures to boost operator confidence'.
The 2026 market share for electric vans is projected at 13.7 per cent, which is well below the mandated target of 24 per cent.
SMMT chief Mike Hawes said the extension of the grant will 'help increase zero emission uptake in the critical commercial vehicle sector, much of which faces the same end of sale date as the car market' but added that more measures were required to have a telling impaxted.
'One of the major barriers to adoption is affordability so this extension will reduce the initial cost of purchase which, together with the accelerated rollout of infrastructure, will help more operators make the switch,' he said.
'The next step must be more affordable energy so government can maximise the return on investment for both the environment and the economy.'
Currently the Plug-In Van and Truck Grant offers discounts of up to £2,500 for small vans, £5,000 for large vans, £16,000 for small trucks, and £25,00 for large trucks – and these will now continue through to at least 2027
Commercial transport is responsible for more than a third of CO2 emissions on UK roads, so it's seen as vital to reduce the emissions from vans and trucks.
Vans are responsible for 16 per cent of road transport emissions.
HGVs, a category including trucks, make up 19 per cent of domestic transport emissions.
John Boumphrey, UK country manager at Amazon, said: 'We welcome the government's continued commitment to supporting the electrification of commercial fleets.'
Commercial transport is responsible for more than a third of CO2 emissions on UK roads,
The EV van grant is being better received than the new Electric Car Grant that sees buyers of electric cars received either a £1,500 (lower band) or £3,750 (higher band) discount on certain 'sustainable' EV models.
The Government's criteria for which manufacturers and models qualify as 'green' has left car makers and buyers scratching their heads, and the the way the Government is announcing models as fast as it can process applications, rather than just releasing one clear list, is attracting a lot of criticism.
As of the 16 August when the most recent ECG qualifiers were announced - five models from Cupra, Volkswagen and Peugeot - no EVs have managed to pass the stringent Level 1 £3,750 grant.
As such, dealers have reportedly been voicing the frustrations, dubbing the roll-out of the scheme 'shambolic', adding that it should have been far simpler than what he dubbed a 'typical government bureaucratic mess'.