UK Government Allocates £120M to Extend Grants for Electric Vans, Taxis, and Motorcycles

The UK Department for Transport (DfT) has announced an extension of the plug-in van grant and additional funding for electric taxis, motorbikes, and wheelchair-accessible vehicles. The move aims to accelerate the country’s transition to zero-emission transport. The £120 million investment reinforces the government’s broader strategy to phase out fossil fuel-dependent vehicles and make electric alternatives more accessible.

Lilian Greenwood, Future of Roads Minister, confirmed the funding on February 25, 2025, emphasizing that the plug-in van grant would remain in place for another year. The scheme already supports over 80,000 electric van purchases and provides subsidies for businesses and drivers looking to make the switch. In addition, the government is removing extra training requirements for electric vans, streamlining the adoption process, and reducing operational costs for fleet owners.

Greenwood emphasized 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.”

The funding package also supports electric motorcycles, taxis, and accessibility vehicles, reinforcing the government’s commitment to making zero-emission transport viable across multiple sectors. Greenwood described the initiative as crucial in making EV adoption "easier, faster, and cheaper."

This announcement comes as the UK sees record EV adoption rates, with over 382,000 electric cars sold in 2024, marking a 20% year-on-year increase. The growth of the second-hand EV market and the expansion of public charging infrastructure—now surpassing 74,000 charge points nationwide—further signal the accelerating shift toward clean transport.

With £200 million allocated in the 2024 Autumn Budget and an additional £6 billion in private sector investment, the government is working to bolster the EV charging network and ensure the infrastructure keeps pace with rising demand. At the same time, ministers are reassessing the 2030 petrol and diesel ban, with the latest consultation reflecting the evolving policy landscape around transport decarbonization.

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.”