The UK Government has officially extended the Plug-in Van Grant until 2026, marking a significant step in its efforts to support businesses and fleet operators in transitioning to electric vehicles. This initiative, which has already played a crucial role in encouraging the adoption of electric vans, ensures that companies can continue to benefit from financial incentives when leasing a commercial EV.
With a renewed commitment of £120 million in funding from the government, the extension aligns with the government’s broader net-zero transport strategy and its push for low-emission fleet options. But what does this mean for businesses, and how can they make the most of the Plug-in Van Grant?
Plug-in Van Grant Extended: A Boost for Businesses
The UK van grant extension has been widely welcomed by the automotive and business sectors, with many viewing it as a crucial move to maintain momentum in electric van adoption. As part of a broader £120 million government initiative, the Plug-in Van Grant will continue offering financial assistance to help small businesses and fleet operators transition to low-emission fleet options.
According to the Department for Transport, this extension is designed to:
Support businesses in reducing operational costs by switching to electric vehicles.
Encourage EV fleet funding to lower carbon emissions and improve air quality.
Strengthen the UK’s position as a leader in commercial EV incentives and sustainability.
The motor industry and fleet leasing sector have welcomed the announcement, with many companies recognising the financial and environmental benefits. This funding ensures that businesses still have access to subsidies for electric vans, making them a more viable alternative to diesel-powered commercial vehicles.
What is the Plug-in Van Grant?
The Plug-in Van Grant is a government incentive designed to make electric commercial vehicles more affordable for businesses and fleet operators to operate. Since its introduction, the grant has played a significant role in boosting business EV adoption, reducing the upfront cost of electric vans, and accelerating the shift towards net-zero transport strategy goals.
How does it work?
Discounts are automatically applied at the point of purchase from approved dealerships and leasing companies. The grant is available for both small electric vans and large electric vans, along with taxis and motorcycles under separate schemes. By removing some of the financial barriers to EV adoption, the grant ensures that fleet electrification incentives remain accessible to businesses of all sizes.
How Much Can You Save on an Electric Van?
One of the biggest advantages of the Plug-in Van Grant is the substantial savings it offers on electric van leasing and purchasing. The amount businesses can save depends on the type of van:
Small electric vans (under 2,500kg): Up to £2,500 off the purchase price.
Large electric vans (2,500kg – 4,250kg): Up to £5,000 off the purchase price.
For businesses operating fleet vehicles, the savings can be considerable, especially when applied across multiple units. When combined with lower running costs, tax incentives, and reduced maintenance, making the switch to electric commercial vehicles becomes even more cost-effective.
Additionally, many fleet operators are opting to lease an electric van instead of purchasing outright. This let’s them take advantage of leasing incentives that lower initial costs while allowing businesses to upgrade to newer models as EV technology advances.
Eligibility: Who Can Apply for the Plug-in Van Grant?
The Plug-in Van Grant is available to a wide range of businesses and fleet operators looking to transition to sustainable travel in electric vans. Eligible applicants include businesses and organisations seeking to lease or purchase an electric van, fleet operators managing multiple commercial vehicles, and self-employed individuals or small business owners who rely on vans for their operations.
To qualify for the grant, the van must be fully electric and meet the government’s low-emission standards. Additionally, the vehicle must be purchased or leased from an approved dealership or manufacturer. The grant applies to both small and large electric vans, ensuring that businesses of all sizes can benefit from this funding to support their shift to low-emission fleet options.
There are also additional commercial EV incentives for businesses operating electric taxis and motorcycles under separate schemes. The eligibility requirements ensure that the funding goes directly towards vehicles that contribute to fleet electrification incentives and support the UK’s net-zero transport strategy.
Why the Extension Matters for Fleet Operators
For fleet operators, the Plug-in Van Grant extension provides a crucial opportunity to expand their EV fleets while reducing operational costs. With the government continuing to invest in commercial EV incentives, businesses have a financial advantage in making the switch to electric vans.
The Plug-in Van Grant extension is a game-changer for businesses, making the transition to electric vans more accessible and cost-effective. One of the biggest advantages is the lower total cost of ownership, as businesses benefit from EV fleet funding, reducing expenses on fuel and maintenance over time. Additionally, the grant supports the growing demand for low-emission fleet options, helping businesses align with sustainability goals while cutting carbon emissions.
Another major benefit is future-proofing against emission regulations, particularly as more cities introduce Ultra Low Emission Zones (ULEZ) and stricter environmental policies. By switching to electric vans now, businesses can avoid potential penalties and ensure compliance with evolving regulations. The extension also improves access to funding, as it aligns with broader fleet electrification incentives, making it easier for companies to secure financial support when expanding their EV fleets.
With these benefits, business EV adoption is expected to rise, as companies take advantage of the government van incentive before it expires in 2026.
How to Apply for the Plug-in Van Grant
Applying for the Plug-in Van Grant is a straightforward process, designed to make the transition to electric vans as seamless as possible for businesses and fleet operators. The discount is applied automatically at the point of purchase or lease, meaning companies do not have to go through a separate application process. To access the grant, businesses simply need to choose an eligible electric van, ensuring it meets the government’s low-emission standards. The vehicle must be purchased or leased from an approved dealership or leasing provider, as only these sellers can apply the discount. Once the transaction is finalised, the grant is automatically deducted from the purchase price or incorporated into the leasing agreement. For companies acquiring multiple vans, working with a trusted leasing provider can help them secure the most cost-effective deals and maximise savings.
Which vans are eligible for the Plug-in Van Grant?
Small electric vans (up to 2.5t) that qualify for the Plug-in Van Grant*:
Maxus e Deliver 3 (short-wheelbase only)
Large electric vans (2.5-3.5t) that qualify for the Plug-in Van Grant*:
DFSK EC35 (categorised as a large van due to its 2,600kg GVW)
Maxus e Deliver 3 (long-wheelbase and chassis cab versions)
Nissan Townstar (crew van and L2 versions)
*Correct as of 27/02/2025
What This Means for the Future of Electric Vans
The extension of the grant plays a crucial role in the future of electric vans in the UK. As the government continues to invest in fleet electrification, businesses can expect to see further developments in infrastructure, such as an expansion of rapid-charging stations and improvements in charging networks tailored to commercial vehicles. The market for electric vans is also set to grow, with manufacturers introducing new models that offer longer ranges and improved battery technology. This extension suggests that further incentives could be introduced beyond 2026 to sustain momentum in electric vehicle adoption and ensure the UK remains on track to meet its net-zero transport targets.
Is Now the Right Time to Lease an Electric Van?
For businesses considering whether to lease an electric van, the grant extension makes the decision more compelling. Leasing allows companies to take advantage of the government’s financial support without the high upfront cost of purchasing, providing flexibility to upgrade to newer models as technology advances. With lower maintenance and running costs compared to diesel alternatives, electric van leasing offers long-term financial benefits while helping businesses stay ahead of evolving emissions regulations. By acting now, companies can secure the best deals while the grant remains available, ensuring they benefit from reduced costs and a more sustainable fleet.
Final Thoughts
The extension of the Plug-in Van Grant is a significant step in supporting business adoption of electric vehicles and making the transition more accessible. With financial incentives in place until 2026, businesses have a clear opportunity to cut costs, reduce emissions, and future-proof their commercial transport operations.
If you’re in the market for an electric vehicle, take a look at our range of EVs available to lease today.