Chinese electric cars look set to be excluded from the UK’s Electric Car Grant scheme launched this week.

Announced earlier this week, the ‘Electric Car Grant’ (ECG) commits £650m to the new car market, offering discounts of up to £3,750 off the cost of a new electric vehicle with an initial list price up to or under £37,000.

Applications for the grant opened on 16 July 2025 and will run until the 2028/29 fiscal year.

The grant is only available for vehicles that have been approved as eligible, with criteria based on the sustainability of vehicle manufacturing.

The highest grant, available for cars with the lowest carbon emission scores, is £3,750. The second level of grant is £1,500.

Lilian Greenwood, the transport minister, told the BBC’s Today programme on Wednesday: “We don’t expect any cars that are assembled in China to be eligible for this scheme.

“The grant is restricted to those manufacturers that reach minimum environmental standards. And, frankly, if you generate a lot of the electricity that powers your factory through coal power stations, then you are not going to be able to access this grant.”

The restrictions come as growing numbers of Chinese firms bring their EV models to the UK. Earlier this month, Geely Auto, parent firm of Lotus, Volvo and Polestar, confirmed plans to enter the UK market as a standalone brand and debuted its first model in the form of the EX5 all-electric SUV. Its compatriot Chery has since announced its plans to enter the UK as a standalone brand this summer, hot off the heels of its success with the launch of the Omoda and Jaecoo brands, and revealed its first two models.

The plans to exclude Chinese EVs from the Electric Car Grant have prompted a backlash from Chinese officials. Beijing told Labour it “resolutely safeguard” its electric car industry and called on the UK to follow World Trade Organisation (WTO) rules and create a “non-discriminatory environment for investment”.

The Electric Car Grant sets out a range of measures to ensure eligible vehicles don’t come from nations with poor sustainability records or high carbon emissions.

Manufacturers must hold a verified Science Based Target and the carbon emissions incurred in vehicle assembly and battery cell production locations must be below certain thresholds.

Applications must also provide evidence of which country the vehicle is assembled in. This will contribute to the environmental score given to the vehicle, which determines the grant banding it receives.

The vehicle assembly emissions account for 30% of the overall environmental score given to the vehicle, reflecting the relative carbon intensity of vehicle assembly to battery production for a zero emission vehicle.