Car Manufacturer MG joins Chinese competitors in providing rebates on electric vehicles as government funding starts to look unpredictable
The UK Government has announced a new Electric Car Grant scheme, aiming to accelerate the switch to electric vehicles (EVs), with a budget of £650 million. However, the scheme comes with strict environmental standards, which could impact the eligibility of Chinese-built EVs.
Leapmotor, a Chinese EV manufacturer, has recently implemented price cuts to "avoid delays" caused by the Government's grant approval process. However, Leapmotor's Chinese-assembled vehicles are not likely to meet the required production standards for the UK Government’s grant, primarily due to the requirement for Science-Based Targets (SBTs) for greenhouse gas emissions reductions.
To be eligible for the 2025 UK Electric Car Grant, a vehicle must be brand new, fully electric, cost £37,000 or less, have a minimum battery range of 100 miles, come with a minimum 8-year battery warranty, and be manufactured by companies with verified science-based sustainability targets for emissions reductions.
MG Motor UK, another Chinese EV manufacturer, has reduced prices on its electric models, with the cheapest MG4 model now priced at £25,495. Despite this, MG's electric line-up remains one of the cheapest in the market, offering up to £3,750 off the price of a new battery-electric car with an RRP below £37,000. From 21 July 2025, MG will offer a £1,500 discount on the MG4 EV and MG5 EV to private buyers.
GWM UK has introduced a £3,750 'Green Grant' for its ORA 03 models, bringing the starting price down to £21,245 on the road. Similarly, Leapmotor's compact T03 city car has been reduced by £1,500 to £14,495, undercutting the Dacia Spring by £500. Leapmotor's larger C10 SUV is being discounted by the full £3,750.
However, models assembled in China, including those from MG, GWM, BYD, and Leapmotor, are unlikely to qualify under the new rules due to China's reliance on fossil fuel-powered manufacturing and battery production. The UK Department for Transport and the Vehicle Certification Agency assess vehicle eligibility based on technical and environmental criteria designed to support zero-emission transport and sustainable manufacturing. Chinese EVs must comply with these and obtain type approval to be eligible.
Guy Pigounakis, Commercial Director at MG Motor UK, commented that MG has been a key contributor to the EV sector and is committed to increasing the sale of EVs. He emphasised MG's dedication to meeting the UK's environmental standards, ensuring the company's vehicles remain competitive in the grant-eligible market.
In summary, the environmental standards of Chinese-built EVs, particularly whether the manufacturer has verified carbon reduction targets, strongly affect their eligibility for the UK grant. Those meeting or exceeding these sustainability requirements can access the full grant, while those failing to meet these environmental standards will not qualify. This approach ensures that the grant supports both low emissions at the tailpipe and sustainable manufacturing processes. The final details regarding the eligibility of cars for the new grant are yet to be announced by the UK Government.
- The UK Electric Car Grant's environmental standards will impact the eligibility of electric vehicles manufactured by Chinese companies, such as Leapmotor, MG Motor UK, GWM UK, BYD, and others, as China's reliance on fossil fuel-powered manufacturing and battery production could prevent them from complying with the required sustainability targets.
- To access the full grant, Chinese EV manufacturers must verify carbon reduction targets, ensuring their vehicles meet or exceed the UK's environmental standards for a competitive edge in the grant-eligible market.
- The requirements for the 2025 UK Electric Car Grant include strict environmental criteria, focusing on both low emissions at the tailpipe and sustainable manufacturing processes, thus emphasizing the significance of adhering to these standards in the electric vehicle industry and finance.
