Plug-in Car Grant cut by a sixth

Published:  18 March, 2021

The Plug-in Car, Van and Truck Grant, which incentives buyers to opt for EVs, has been cut by a sixth, a move which has been characterized as counter-productive by the automotive sector given the 2030 goal to end the sale of new petrol and diesel cars government has set itself.

From today (18 March), government will provide grants of up to £2,500 for electric vehicles on cars priced under £35,000.According to the Department for Transport (DFT), the move is actually a rebalancing, intended to target less expensive models and reflect the greater range of affordable vehicles now available, allowing the scheme’s funding to go further.

Grants will no longer be available for higher-priced vehicles, which the DFT believes are typically bought by drivers who can afford to switch without a subsidy. The number of electric car models priced under £35,000 has increased by almost 50% since 2019 and more than half the models currently on the market will still be eligible for the grant.

Transport Minister Rachel Maclean said: “The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference. We will continue to review the grant as the market grows. The plug-in car grant was introduced 10 years ago to stimulate the early market for zero emission vehicles. Since 2011, government has provided close to £1.3 billion in plug-in vehicle grant funding to bring ultra-low emission vehicles onto UK roads, supporting the purchase of more than 285,000 vehicles.”

Commenting on the move, SMMT Chief Executive Mike Hawes said, "The decision to slash the Plug-in Car, Van and Truck Grant is the wrong move at the wrong time. New battery electric technology is more expensive than conventional engines and incentives are essential in making these vehicles affordable to the customer. Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply. This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government’s ambition to be a world leader in the transition to zero emission mobility.”

NFDA Chief Executive Sue Robinson added: “The decision is extremely disappointing as it risks undermining the progress the UK has been making towards a zero-emission market in line with the 2030/2035 deadline set by the government. The cost of the electric cars currently available on the market remain higher than their petrol or diesel counterparts and it is vital that buyers continue to be incentivised. Additionally, commercial vehicles keep the economy running, as the recent increase in LCV registrations demonstrates, and this reduction will have a significant impact on small businesses and sole traders. Sales of electrified vehicles have been performing well but they still represent a relatively small proportion of the overall market; the timing of the cut to the grant is unfortunate as a number of private customers are currently waiting for showrooms to reopen to get familiar with new types of vehicles, including EVs. NFDA has repeatedly highlighted that we must avoid a situation where the least well-off drivers are deterred from buying a new, low-emission vehicle when the time comes to replace their old one.”

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