In short: the government's Plug-in Van Grant (PiVG) has been extended through April 2026, backed by £120 million in funding. It knocks up to £5,000 off the price of an eligible electric van at the point of sale — which, if you're financing the purchase, reduces the amount you need to borrow before a single calculation is run.
How much is the grant worth
- Small vans (under 2.5 tonnes): up to £2,500, capped at 35% of the purchase price.
- Larger vans (2.5-4.25 tonnes): up to £5,000, also capped at 35% of the purchase price.
Eligibility
To qualify, a van needs a zero-emission driving range of at least 60 miles and CO2 emissions below 50g/km - in practice this means a genuine battery-electric van rather than a plug-in hybrid. The grant is applied automatically as a point-of-sale discount by the dealer; there's no separate application for the buyer to complete.
What this means for your finance figure
Because the grant reduces the purchase price before finance is arranged, it directly lowers your borrowing requirement. For example, a large electric van listed at £42,000 with the full £5,000 grant applied effectively finances like a £37,000 vehicle - which on a typical HP structure can mean a meaningfully lower monthly payment than the sticker price would suggest.
Model the difference yourself
Run the discounted price through our HP calculator to see the monthly payment with the grant applied.
Combine it with the new leasing capital allowance
If you're financing through a business, it's also worth knowing that a new 40% first-year capital allowance for leased vans took effect from January 2026, improving the cash-flow case for leasing an electric van on top of the upfront grant discount. Together, the two make electric vans meaningfully more affordable to finance in 2026 than the headline list price suggests.
The catch: funding is finite
Unlike a tax rule, the PiVG is a funded grant scheme, not an entitlement - the £120 million pot is allocated until it runs out or the scheme's current end date (April 2026) is reached, whichever comes first. If you're planning an electric van purchase around this grant, it's worth confirming current availability with the dealer before finalising your finance application, since funding schemes like this have been narrowed or closed early in the past.