The biggest 2026 change is in the US, where the federal $7,500 new-EV and $4,000 used-EV tax credits ended on 30 September 2025. What remains stateside: state/utility rebates, a home-charger credit (30% up to $1,000, before 1 July 2026) and a vehicle-loan interest deduction up to $10,000/year for 2025–2028. The UK offers the Electric Car Grant (£1,500–£3,750) on eligible sub-£37,000 models, plus a low 4% Benefit-in-Kind rate for company cars — though VED now applies to EVs. In India, EVs attract just 5% GST (versus 28%+ for petrol cars), with state subsidies, road-tax and registration waivers, and PM E-DRIVE support for two- and three-wheelers.
EV incentives by country at a glance
| Country | Main purchase incentive (2026) | Other key support |
|---|---|---|
| US | None federal (credits ended 30 Sep 2025) | State/utility rebates; home-charger credit; loan-interest deduction |
| UK | Electric Car Grant £1,500–£3,750 (sub-£37k) | 4% company-car BiK; salary sacrifice; cheap off-peak tariffs |
| India | 5% GST vs 28%+ for ICE | State subsidies; road-tax/registration waivers; PM E-DRIVE (2W/3W) |
United States: the credits have ended
This is the headline every US buyer needs. Under the One Big Beautiful Bill Act, the federal Clean Vehicle Credit ($7,500 new), Previously-Owned Clean Vehicle Credit ($4,000 used) and Commercial Clean Vehicle Credit (45W) are not available for vehicles acquired after 30 September 2025. For most of 2025 the $7,500 credit had been cancelling out the EV price premium; from late 2025 on, buyers carry that gap themselves.
What still exists at the federal level:
- Home-charger credit (Alternative Fuel Vehicle Refueling Property): 30% of hardware and installation cost, capped at $1,000, for equipment placed in service before 1 July 2026 — but only in eligible census tracts (low-income or non-urban areas).
- Vehicle-loan interest deduction: a new above-the-line deduction of up to $10,000 per year on interest for qualifying new-vehicle loans, available 2025–2028, accessible even to non-itemisers. Over four years this can rival the old credit for eligible buyers.
- Section 179 / bonus depreciation: for business buyers, immediate expensing remains (heavy-SUV cap $32,000; 100% bonus depreciation through 2026).
US state and utility incentives still matter
State programmes increasingly do the heavy lifting. California's Clean Vehicle Rebate Project offers up to $7,500 for income-qualifying buyers, and its Clean Cars 4 All programme up to $12,000 for low-income residents, including home-charger help. Colorado offers a state tax credit of up to $5,000 for new EVs, with extra rebates for income-qualified buyers. Many utilities add charger and off-peak-charging rebates. Always check your own state and utility, as these change frequently.
There is no federal purchase credit for new or used EVs after 30 September 2025. Budget on the real price of the car, then look to state, local and utility programmes, the home-charger credit (until 1 July 2026) and the loan-interest deduction to claw back some cost.
United Kingdom: grant plus company-car advantage
The UK leans on grants and tax treatment rather than upfront cash to consumers:
- Electric Car Grant (ECG): launched 16 July 2025 and extended at the November 2025 Budget into 2026–27, this £650m+ scheme takes £1,500 or £3,750 off the price of eligible new EVs under £37,000. The discount flows into the price/lease cost rather than arriving as a cheque.
- Benefit-in-Kind (BiK): company EVs are taxed at just 4% of P11D value in 2026/27, rising to 5% (2027/28), 7% (2028/29) and 9% (2029/30) — still far below petrol cars. This underpins salary-sacrifice schemes.
- Vehicle Excise Duty (VED): the EV exemption has ended. Zero-emission cars pay a £10 first-year rate, then the standard £195 from year two; EVs over £50,000 also pay the £425/year 'expensive car supplement' from April 2026.
- Cheap off-peak electricity tariffs make home charging very low-cost, reinforcing running-cost savings.
India: tax treatment and state subsidies
India's support works mainly through tax and state-level perks:
- GST: EVs are taxed at just 5%, versus 28% plus cess for petrol and diesel cars — a large structural saving on the purchase price.
- PM E-DRIVE: the ₹10,900-crore central scheme (running to 31 March 2028) gives buyer incentives mainly for electric two- and three-wheelers (around ₹2,500 per kWh, capped) — electric cars are not covered, on the basis that 5% GST already makes them cheaper. The 2W incentive is scheduled to end 31 July 2026.
- State subsidies: these drive the biggest buyer-facing relief — e.g. Delhi up to ₹1.5 lakh and Maharashtra up to ₹2.5 lakh for electric cars, plus road-tax and registration-fee waivers (e.g. Telangana's 100% waiver to 31 December 2026).
How to make the most of what's available
- Confirm current rules at the official source before buying — incentives change fast and vary by trim, price cap and income.
- Stack what you can: in the US, combine state/utility rebates with the home-charger credit and loan-interest deduction.
- In the UK, weigh salary sacrifice and the Electric Car Grant together — often the cheapest route to a new EV.
- In India, check your specific state policy, not just central schemes — that's where most of the saving is.
- Factor incentives into total cost of ownership, not just the sticker, and reverify before you sign.
Frequently asked questions
Is the $7,500 federal EV tax credit still available in 2026?
What US EV incentives are left after the credits ended?
What is the UK Electric Car Grant?
Do EVs still pay road tax in the UK?
What incentives apply to electric cars in India?
Sources & further reading
- IRS — Clean vehicle tax credits
- Kiplinger — The Federal EV Charger Tax Credit for 2026
- The Electric Car Scheme — Electric Car Grant 2026
- PM E-DRIVE — official scheme portal
Figures, prices and policy details were current at the last-updated date above. Automotive pricing, incentives and regulations change frequently — verify time-sensitive details with the linked primary sources. Read our editorial policy and fact-checking standards.
