The UK Department for Transport (DfT) has announced an extension of the plug-in van grant, alongside additional financial support for electric taxis, motorbikes and wheelchair-accessible vehicles, as part of a £120 million funding package aimed at accelerating the transition to zero-emission transport.
Lilian Greenwood MP, future of roads minister at the DfT, confirmed the funding on 25 February 2025, stating that the plug-in van grant will be extended for another year.
Under the scheme, businesses and van drivers can receive up to £2,500 when purchasing small vans up to 2.5 tonnes and up to £5,000 for larger vans up to 4.25 tonnes.
Since its introduction, the grant has supported the sale of more than 80,000 electric and zero-emission vans across the UK.
The government is also removing additional training requirements that previously applied only to zero-emission vans but not their petrol or diesel equivalents.
According to the DfT, the move will cut costs, reduce bureaucratic barriers and simplify the hiring of drivers for electric van fleets.
Greenwood emphasised the importance of these measures in supporting businesses and drivers in making the transition to cleaner transport: “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.”
Motorbike riders are set to benefit as well, with the government maintaining a £500 grant for the purchase of electric motorcycles for another year.
These incentives come as part of a wider £2.3 billion government commitment to facilitate the transition to zero-emission vehicles.
The government also highlighted progress in EV adoption, reporting that more than 382,000 electric cars were sold in 2024, representing a 20% increase on the previous year.
With one in three used EVs priced under £20,000 and 21 new electric models available for under £30,000, officials are strongly encouraging the switch to electric transport.
READ MORE: Vehicle excise duty rates for EVs and hybrids to increase from April 2025
According to the DfT, charging infrastructure is also expanding, with more than 74,000 public chargepoints now available across the UK, including nearly 20,000 added in the past year alone.
Further investment, including £200m announced in the 2024 Autumn Budget and £6bn in private sector funding, aims to ensure a robust and accessible EV charging network nationwide.
The government has also consulted car manufacturers on reinstating the 2030 ban on new petrol and diesel cars, with the consultation recently closing.
Ministers argue that with the average range of a new EV now at 236 miles and lifetime emissions significantly lower than petrol vehicles, the transition to zero-emission transport is essential for achieving the UK’s net zero ambitions.
Speaking on the grant extension, Matthew Dillon, head of commercial vehicles at fleet management company Ayvens, commented: “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.
“Another welcome announcement is the removal of the additional driver training hours required to operate heavier alternative-fuelled vehicles (AFVs). 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.
“However, while these announcements demonstrate important progress, many fleet operators may still wait for further clarity following the consultation. In particular, clear guidance on MOT requirements for 4.25-tonne AFVs, as well as the associated costs and administrative implications, will be essential to ensure widespread adoption.
“Other challenges also remain, including vehicle availability, payload constraints, and the need for greater investment in infrastructure. However, 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.”
Want to find out more about electric vehicles and alternative fuels? Make sure to come along to the panel discussion exploring this topic hosted by Logistics Manager’s sister publication CiTTi Magazine at the Sustainable Supply Chain Exhibition.
This event is co-located with IntraLogisteX and Robotics and Automation at the NEC Birmingham on 25-26 March 2025, and will offer a focused environment for logistics, supply chain and sustainability professionals to share ideas, offer solutions and help each other on their sustainability journeys.
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