Social Leasing could make electric vehicles affordable for more people

T&E UK suggests levy on SUVs could support low cost leasing scheme

A low cost targeted vehicle leasing scheme offering battery electric vehicles (BEVs) to low-income households could make the transition to greener motoring afforsable for more people, suggests clean air and green transport advocacy T&E.

The UK's electric vehicle transition is well underway and accelerating, with EVs now making up a record 23.4% of new registrations in 2025. To build on the success of the Zero Emission Vehicle (ZEV) Mandate, T&E UK is proposing a new 'Social Leasing' plan to ensure the benefits of this transition are shared by everyone, bringing BEV access to lower-income households for as little as £77 a month.

The government's flagship ZEV mandate has been crucial in driving the supply of better and cheaper BEVs, providing the investment certainty the UK automotive sector needs to scale up production. In a new report, T&E UK says that, with consumer demand remaining strong, the next positive step is to broaden access. 

Currently, higher upfront costs mean the absolute cheapest EV lease on the market is £141, while the bottom half of UK earners typically spend under £100 a month on car purchases or leasing. By bridging this gap, policy can unlock the cheaper running costs of BEVs for families with less disposable income, helping to cut bills and tackle inequality.

Eloise Sacares, senior researcher in UK vehicles policy at T&E UK, said: “Social leasing is the perfect next step for the UK’s EV transition. While the mandate is successfully driving supply of better and cheaper EVs, we need to ensure that those on low incomes who need a car can access an affordable EV. Currently, with the cheapest EV lease at £141 a month, those on low incomes are priced out and unable to benefit from lower running costs. By bringing leasing costs down to as low as £77 a month, we can ensure that EVs are accessible and reduce bills for all.” 

T&E UK says the policy could be sustainably funded by a new ‘Large Vehicle Levy’ targeting heavy, high-polluting SUVs, alongside portions of the existing Electric Car Grant budget. 

T&E UK says its ‘Pure Social Leasing' scheme would offer households a small electric car on a secure, eight-year subsidised lease. This removes the upfront cost barrier that currently holds back lower-income drivers from going electric.

Recognising that upfront cost is not the only hurdle, T&E UK also proposes a 'Bundled Lease’ option designed with car-dependent drivers in mind, such as key workers making frequent journeys or rural residents. For a predictable monthly payment of as low as £222, this comprehensive package covers the car, insurance, maintenance, and charging costs. This would ensure those who rely most on their cars have total confidence in their lower running costs and aren't left behind in the transition.

To further accelerate this shift and remove the most polluting vehicles from our roads, the report also recommends a 'Scrappage-for-Leasing' discount. This would allow drivers to trade in their older petrol or diesel cars for a £2,000 bonus, which is applied as a monthly discount on a new BEV lease. This could bring lease costs down to just £156 a month for any household, or £56 a month if the driver also qualifies for the pure social leasing scheme.

International examples show this approach is highly effective. When France launched its social leasing initiative in December 2023, the scheme was met with immediate enthusiasm. While initial funding was planned for 25,000 vehicles, 90,000 households applied in just a month and a half, proving that lower-income drivers are eager to transition to zero-emission mobility when the right incentives are in place.

“The best thing about social leasing for electric vehicles is that it can be sustainably funded by a new Large Vehicle Levy on large SUVs. This could fund 179,000 households a year to take part in the scheme all the while reducing air pollution, and household bills,’’ Eloise Sacares continued.

The T&E UK briefing on the Social Leasing scheme can be found here

Vicky Edmonds, chief executive of electric vehicle drivers' association EVA England, said: “The driver is central to a sustainable transition to electric. If we can make electric vehicles more affordable, we can persuade more households that these cars will work for them. That is why EVA England is pleased to partner with T&E on this important study. It shines a light on the factors that will bring EVs into a price bracket that the majority of families can access, and on the steps that government and industry can take to make sure that driving electric can become a reality for all of us, no matter our personal circumstances.”