Plug-in car grant shutdown sends “wrong message”

Published:  15 June, 2022

The government’s decision to end the plug-in car grant (PICG), with funding being instead funnelled into electric vans, taxis and motorcycles, as well as towards charging infrastructure sends the “wrong message,” the car industry has warned.

The scheme, which ended yesterday (14 June 2022) helped to push EV sales from under 1,000 during 2011 to almost 100,000 in the first five months of 2022 alone. According to the SMMT’s new car sales figures for May, EVs made up 12.4% of the total. Overall, three in 10 new cars sold in during the month electrified to some extent.

Commenting on the decision to close the scheme, Transport Minister Trudy Harrison said:
“Having successfully kickstarted the electric car market, we now want to use plug-in grants to match that success across other vehicle types, from taxis to delivery vans and everything in between, to help make the switch to zero emission travel cheaper and easier.”

However, according to SMMT Chief Executive Mike Hawes, the government may have picked the wrong moment to end its support for EV car sales: “With the sector not yet in recovery, and all manufacturers about to be mandated to sell significantly more EVs than current demand indicates, this decision comes at the worst possible time.

“The decision to scrap the Plug-in Car grant sends the wrong message to motorists and to an industry which remains committed to government’s net zero ambition. While we welcome government’s continued support for new electric van, taxi and adapted vehicle buyers, we are now the only major European market to have zero upfront purchase incentives for EV car buyers yet the most ambitious plans for uptake. “

Mike added: “If we are to have any chance of hitting targets, government must use these savings and compel massive investment in the charging network, at rapid pace and at a scale beyond anything so far announced.”

RAC Head of Policy Nicholas Lyes said: “The UK’s adoption of electric cars is so far impressive but in order to make them accessible to everyone, we need prices to fall. Having more on the road is one important way of making this happen, so we're disappointed the government has chosen to end the grant at this point. If costs remain too high, the ambition of getting most people into electric cars will be stifled."

NFDA Chief Executive Sue Robinson observed: “The PICG existed as a highly effective and highly utilised financial incentive to support UK motorists in their transition to electric. Although the market share of electric vehicles is continuing to grow at an impressive rate, it is premature to remove this vital support mechanism and risks the UK falling behind other G7 nations in reaching their challenging net-zero targets.”

Mike Coulton, EV Consultant at Volkswagen Financial Services UK, added: “While it should not come as a surprise to see the government have brought to a close the PICG, it is nonetheless hugely disappointing that more is not being done to encourage and support lower-income households in the transition to EVs. Maintaining or even increasing the PICG for the least expensive EVs to make them more affordable, and encourage manufacturers to produce electric cars at a lower price-point, could have been a strong incentive to help adoption for this sector of the market. This in turn would help to remove older and dirtier internal combustion engine vehicles. That said, the government’s focus on further improving public charging, while still incentivising adoption in other areas of the vehicle market such as LCVs is to be welcomed and encouraged.”

£300 million in funding will now be directed into grants for plug-in electric vans, taxis and motorcycles, as well as wheelchair accessible vehicles. Meanwhile, the government had already earmarked £1.6 billion to building the UK’s public charge point network.

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