The Government is ploughing an extra £18m of funding into the Plug-in Truck Grant to help fleet operators and hauliers go electric.

The extra cash, announced today (Tuesday 7 January), will increase the Plug-in Truck Grant until March 2026, providing discounts of up to £120,000 on new electric trucks.

It’s part of a £318m plan for green freight which is backing British businesses by slashing upfront costs on new lorries and helping businesses to access the lower running costs.

Alongside increased funding, the Government will also launch a consultation on the regulatory roadmap to phase out sales of new non-zero emission HGVs by 2040, giving industry the certainty it needs to invest and plan for the future.

Similar to the Government’s Electric Car Grant, which has already saved over 45,000 drivers up to £3,750 when making the switch, the Plug-in Truck Grant enables lorry operators to access savings of up to £120,000 when buying a new electric truck.

The new funding comes after the Government confirmed last August that the Plug-in Van and Truck grants are being extended until at least April 2027.

The grants previously offered discounts up to £2,500 for small vans, £5,000 for large vans, £16,000 for small trucks, and £25,000 for large trucks.

The new grant levels for trucks mean:

• Smaller trucks (4.25t-12t) could save up to £20,000

• Mid-sized trucks (12t-18t) up to £60,000

• Larger trucks (18t-26t) up to £80,000

• And the largest lorries (26t+) up to £120,000

Keir Mather, Minister for Aviation, Maritime and Decarbonisation, said: “We’re backing British businesses to go green by making electric lorries more affordable, helping hauliers to make the switch whilst turbocharging growth, investment and jobs in the sector.

“Our proposals will provide the certainty the industry has been calling for so that Britain becomes the best place for green investment.”

The Government has already invested over £120m as part of the Zero Emission HGV and Infrastructure Demonstrator (ZEHID) programme to roll out more zero-emission lorries on UK roads.

The new funding is set to further increase zero-emission truck sales to support delivery of UK’s climate obligations.

Day-to-day running costs can already be lower for electric lorries compared to their diesel counterparts, but upfront vehicle costs are typically higher.

The new increase to the Plug-in Truck Grant will help businesses access those daily savings, cutting costs for business as well as emissions.

John Boumphrey, UK country manager at Amazon UK, said: “Amazon welcomes the Government’s continued commitment to supporting the electrification of commercial fleets. The UK will be home to the largest number of electric heavy goods trucks in Amazon’s global transportation network and the first of our record-breaking order of eHGVs are already on the road. We’re investing to help the UK decarbonise and meet our goal of being net-zero carbon by 2040. We look forward to continuing to work with the government to ensure the growth of more sustainable logistics.”

Business group Logistics UK said the Plug-in Truck Grant was fundamental to the continued uptake of electric HGVs, and added that the increased funding was “a welcome step forward that can help support the business case for industry to invest”.

But Lamech Solomon, head of decarbonisation policy, added: “However, with long procurement cycles, the sector needs certainty that these new rates will be maintained far beyond March 2026, so it has confidence to plan and invest: our recently published report highlighted that over 60% of industry respondents believed the Government had not provided adequate funding to support the decarbonisation of their fleets.

“Commercial and operational viability will always be the main driver for logistics operators and alongside the cost of buying new vehicles, one of the main barriers they still face to fleet electrification is the lack of charging infrastructure: 85% of operators who responded to Logistics UK’s recent survey expressed low confidence in the availability of suitable public charging and more than 80% disagree they can install chargers with sufficient capacity at their operating sites. The logistics sector is committed to decarbonising but needs the Government to provide sufficient support to make this transition a realistic possibility for industry.

“These are the factors that need to be considered during the consultation, also announced today, regarding the regulatory roadmap to phase out sales of new, non-zero emission HGVs. The voice of industry must be heard and government should work with our sector to create a viable pathway to decarbonisation that includes all viable technology routes, ensuring the goods that businesses and consumers across the country rely on, continue to move smoothly through the UK supply chains.”

ChargeUK, the campaign group for the charging sector, said the new grants were a welcome kickstarter for the electrification of freight.

But Jarrod Birch, head of policy and public affairs, added: “As with electrification of cars we need long-term, clear policy to encourage investment in both the vehicles and the charging infrastructure. So we hope to see this new funding continue beyond March and be matched with support for the rollout of the widespread and affordable charging infrastructure required for HGVs too.

“Now the Government is showing an intention to support electric HGVs the charging industry will be eager to step up with an acceleration of charge point deployment. To do so a stable and clear regulatory framework is needed, including dedicated funding for charging as well as vehicles, fast tracked grid connections and mechanisms to help bring down public and depot charging costs.”