DfT confirms support for electric van fleets

Although the UK is a decade away from a 100% zero-emission (at the tailpipe) new car and van market, the transition to electric vehicles is already gaining momentum.

There were almost 1.2 million electric vehicles on our roads at the end of June 2024, which is twice as many as two years previously ^[1] while new electric cars outnumbered diesels three to one last year ^[2].

However, electric vans and pickups are proving more challenging to switch. At 6.3% of new vehicles last year, according to the SMMT ^[3], registrations are lagging behind mandatory targets and the Department for Transport (DfT) is hoping to change that ^[4]. Here’s what’s changing:

Plug-in Van Grant Extended to April 2026

Originally announced during the Autumn Budget 2024 ^[5], the Treasury has allocated £120m to extend the Plug-in Van Grant by 12 months. The scheme has supported 80,000 vehicle purchases since it was introduced in 2012, and was due to end on 31 March 2025 ^[6].

Funding levels are unchanged, providing:

• •
  Up to £2,500 for vehicles with a gross weight of less than 2,500kg
• •
  Up to £5,000 for vehicles with a gross weight of 2,500-4,250kg

Eligible vehicles must offer a fully electric range of at least 60 miles and emit less than 50g/km CO2 at the tailpipe, which means funding is available for plug-in hybrid and ‘range extender’ vehicles.

The Department for Transport will also raise the price cap for wheelchair-accessible electric vehicles from £35,000 to £50,000.

No extra training for electric vans over 3.5 tonnes

Although technology is delivering lighter, smaller batteries, electric vans are typically heavier than their petrol or diesel counterparts. For the largest vans, this can push the gross weight over 3,500kg and result in them being classed as heavy-duty vehicles, with additional operational challenges for fleets.

As announced in 2023, drivers with a standard category B (car) licence will be able to operate electric vans up to 4,250kg without any additional training. This extends a licensing derogation introduced in 2018, which removed the need for a Category C/C1 licence if drivers completed five hours of on-road training ^[7,8].

Another consultation, launched in December 2024, is assessing further reforms. Electric vans over 3,500kg still require their first MoT 12 months after registration (at a specialist HGV centre), a tachograph and compliance with drivers’ hours rules (unless they are only used locally), and must be electronically limited to 56mph ^[9]. Diesel vans with an equivalent payload often avoid those issues.

Tax changes for electric vans

Although it wasn’t part of the DfT’s latest announcement, there are three key changes ahead which could affect electric commercial vehicles ^[10]. From April 2025:

REFERENCES:

^[1] Department for Transport [2024]. VEH0142: Licensed plug-in vehicles (PiVs) at the end of the quarter by body type, fuel type, keepership (private and company) and upper and lower tier local authority: United Kingdom. [online] Available at: https://assets.publishing.service.gov.uk/media/66f15b9d7aeb85342827abd7/veh0142.ods [Accessed 25 February 2025].

^[2] Society of Motor Manufacturers and Traders (SMMT) [2025]. December 2024 new car registrations. [online] Available at: https://media.smmt.co.uk/december-2024-new-car-registrations/ [Accessed 25 February 2025].

^[3] Society of Motor Manufacturers and Traders (SMMT) [2025] December 2024 new LCV registrations. [online] Available at: https://media.smmt.co.uk/december-2024-new-lcv-registrations/ [Accessed 25 February 2025].

^[4] Department for Transport [2025] £120 million to roll out more electric vans, taxis and motorbikes. [online] Available at: https://www.gov.uk/government/news/120-million-to-roll-out-more-electric-vans-taxis-and-motorbikes [Accessed 25 February 2025].

^[5] HM Treasury [2024] Autumn Budget 2024 [online] Available at: https://www.gov.uk/government/publications/autumn-budget-2024/autumn-budget-2024-html [Accessed 25 February 2025].

^[6] Department for Transport [2024] Plug-in van and truck grant. [online] Available at: https://www.find-government-grants.service.gov.uk/grants/plug-in-van-and-truck-grant-1 [Accessed 25 February 2025].

^[7] Department for Transport [2023] Consultation outcome: Driving licence flexibility for alternatively fuelled vehicles. [online] Available at: https://www.gov.uk/government/consultations/driving-licence-flexibility-for-alternatively-fuelled-vehicles/outcome/consultation-outcome-driving-licence-flexibility-for-alternatively-fuelled-vehicles [Accessed 25 February 2025].

^[8] Government of the United Kingdom [2022] Businesses to benefit from extension to plug-in van and truck grants. [online] Available at: https://www.gov.uk/government/news/businesses-to-benefit-from-extension-to-plug-in-van-and-truck-grants [Accessed 25 February 2025].

^[9] Department for Transport [2024] Zero emission vans regulatory flexibility consultation. [online] Available at: https://www.gov.uk/government/consultations/zero-emission-vans-regulatory-flexibility/zero-emission-vans-regulatory-flexibility [Accessed 25 February 2025].

^[10] HM Treasury [2024] Autumn Budget 2024: Overview of tax legislation and rates (OOTLAR). [online] Available at: https://www.gov.uk/government/publications/autumn-budget-2024-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances [Accessed 25 February 2025].

^[11] Department for Transport [2023] Zero emission vehicle mandate consultation: Final cost-benefit analysis. [online] Available at: https://assets.publishing.service.gov.uk/media/6554be55544aea000dfb2d59/zev-mandate-consultation-final-cost-benefit-analysis.pdf [Accessed 25 February 2025].