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, she added.
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 vehicle 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.
The minster 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.”
Logistics UK said the extension provided clarity and reassurance for the sector that the Government was serious about a transition to zero-emission vehicles. But the organisation’s head of decarbonisation policy, Lamech Soloman, said decarbonising commercial transport required a multi-faceted approach.
He said: “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 greenhouse gas emission savings.”
