The UK’s Plug-in Van and Truck Grants are being extended for a further year, helping thousands of businesses and vehicle operators to electrify their fleet.

Future of Roads Minister Lilian Greenwood confirmed the grants will continue through to at least April 2027, delivering certainty for businesses to continue their switch to electric.

Grant levels for the 2026/27 financial year have not been announced yet though and will be “confirmed in due course”.

The Plug-in Van and Truck Grants currently offer 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 extended grants are open to fleet operators, ranging from major logistics firms to smaller independent businesses, along with individual drivers, making it cheaper to buy an electric van and putting money back into their pockets.

The move will support the rollout of electric commercial vehicles and the industries behind them across the UK while helping fleets to cut running costs; by switching to electric, businesses could save more than £2,800 annually on fuel alone according to industry figures.

Lilian Greenwood said: “Extending these grants is another decisive step to power Britain’s transition to cleaner transport while backing the industries that keep our economy moving, driving new investment in EVs and helping businesses cut costs and expand.

“Every EV on our roads means healthier communities and new economic opportunities across the country, which is why grants like these are crucial to both accelerating that transition and building a resilient, competitive economy.”

John Boumphrey, UK country manager at Amazon, said: “We welcome the Government’s continued commitment to supporting the electrification of commercial fleets. Decarbonising the transportation network is a critical step to enable us to achieve our goal to reach net zero carbon emissions across our operations by 2040.”

Checkatrade CEO Jambu Palaniappan also greeted the news.

“This news is a big boost for tradespeople across the UK. Lower running costs, freedom from charges like ULEZ, and the ability to plan ahead with confidence –it all adds up to real, practical support. For many Checkatrade members, with help to switch to electric vans, they can keep moving, win more work and build a future that’s both cost-effective and sustainable.”

And Logistics UK said the extension provides clarity and reassurance for the sector that the Government is serious about a transition to zero-emission vehicles.

But the organisation’s head of decarbonisation policy Lamech Soloman said decarbonising commercial transport requires a multi-faceted approach.

“Commercial and operational viability will always be the main driver for transport 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. We regularly hear from our members that depot charging alone will not be enough and that there must be a mix of depot and en route charging to make operations viable.

“The sector needs greater clarity and support from government to give it the confidence to invest in these new technologies: we are urging that freight hubs and depot facilities are prioritised for grid connections to ensure confidence in the new technologies involved. It is also critical that the government does not continue to overlook the role of Low Carbon Fuels, such as HVO and biomethane, in decarbonising commercial transport and which can provide immediate Green House Gas emission savings.”

Soloman also said the Plug-in Van and Truck Grants should be delivered as part of a multi-year settlement, as procurement cycles for commercial vehicles can take longer than a year.

“Operators need certainty over the long term to plan investments and create confidence required to transition at scale.”

Nicola Dobson, Peugeot UK managing director, said: “The Plug-in Van Grant is essential to help more businesses make the switch to electric, so we’re pleased that the Government has confirmed it will continue until at least 2027. Peugeot is at the forefront of the electric van market with three fully electric models, part of the widest electric vehicle line-up of any mainstream European brand, and is committed to supporting businesses in the electric transition.”

Finally, Kirsty Pendleton, head of business services product and marketing at the AA, said the extended Plug-in Van Grant was welcome news.

“The extension of the existing grant scheme will create confidence for businesses large and small that rely on vans and is vital if the Government is to achieve its ambitious targets for decarbonising transport. We have long campaigned for the removal of barriers to EVs such as cost and access to suitable infrastructure, that could impede progress.

“The AA has been an enthusiastic advocate for EVs but as an organisation with a recovery fleet of more than 3,000 vehicles and the leading roadside recovery partner for business in the UK, we recognise that the numbers must stack up when it comes to making decisions about switching to EVs, especially when it comes to vans, the vital workhorse for many businesses.”

The funding for the extended grants forms part of the Government’s £650m scheme to make it cheaper to buy EVs and helping to boost growth as part of Labour’s Plan for Change.

Commercial transport is responsible for more than a third of CO2 emissions on UK roads. By switching to EVs, fleets can expand their own sustainable operations, whilst helping keep the UK “on track to becoming a clean energy superpower”.

The Government is also helping to drive the rollout of charging infrastructure, including a £30m investment announced in July to install over 3,000 new charge points at depots across the UK. That’s in addition to the near-85,000 public charge points in the UK and the 100,000-plus on the way through the £381m Local EV Infrastructure fund.

The Government also continues to roll out the new Electric Car Grant, offering discounts of up to £3,750 off the price of new EVs and now available on 24 models, following the announcement over the weekend that Cupra, Volkswagen and Peugeot models are eligible.