The Fiat 500e has become one of the UK’s cheapest cars after being approved for the top band of the government’s Electric Car Grant (ECG).

The ECG provides either £1500 or £3750 off the price of a new EV based on several factors, including the emissions from the production of its battery and the full vehicle, as well as several warranty requirements. 

The new £3750 discount on the 500e cuts its starting price to £17,245 – which makes it cheaper than the forthcoming 500 Hybrid by £1750.

Indeed, the only cheaper cars currently on sale are the Kia Picanto (£17,095), Dacia Sandero (£14,765), Leapmotor T03 (£12,995) and Dacia Spring (£11,995).

The significant cut in the 500e’s starting price will come as welcome news for Fiat, which has so far struggled to find a market for the model.

Autocar understands fewer than 1000 examples were registered in the UK last year. Meanwhile, Fiat’s sales for the first half of 2026 were down by 39% compared with the same period last year, to 3748.

Improving the sales performance of the 500e will prove crucial as Fiat looks to comply with the UK’s zero-emission vehicle (ZEV) mandate, which requires car firms to increase the proportion of EVs they sell here annually. 

This year, every one in three cars sold by a firm must be electric. Alternatively, it must sell a sufficient number of low-emissions ICE cars to convert savings in emissions into ‘credits’ that can be traded for de facto EV sales.

Manufacturers that do not meet their targets face penalties of £12,000 per combustion-engined car sold over their allowed quota.

The majority of Fiat’s UK sales this year have been mild hybrids, Autocar understands. Ramping up sales of the 500e would give the brand crucial flexibility to sell its most popular cars, such as the mild-hybrid 600 crossover. It will also be instrumental in allowing Fiat to expand its range with new offerings such as the pure-petrol, manual-gearbox Grande Panda.

The 500e is due to be updated next year in a bid to make it more competitive with the new wave of small European EVs, such as the Renault Twingo.

It's earmarked for a revised battery pack with a greater energy density (therefore capacity), which should improve its range from the current 118 miles in Urban Range form or 199 miles in Standard Range guise.

The latter car now starts from £20,245, following the 500e’s qualification for the ECG.

The Abarth 500e hot hatch – built in the same factory in Pomigliano, Italy – now also qualifies for the £3750 grant, cutting it to £24,245.