Andy Alderson, founder and CEO of online leasing giant Vanarama, was left gobsmacked when the government announced yesterday that it would cut the Plug-In Car Grant (PiCG) by 60 percent with immediate effect and without any prior warning to the industry or car buyers.
He said the move would hit the automotive industry hard just when it was showing signs of recovery from the effects of the pandemic by damaging consumer confidence. Alderson also warned the government had ‘shot itself in the foot’ by making the ‘ill-timed’ changes and had plunged its own goal of ending all petrol and diesel sales by 2030 into jeopardy.
It came just weeks after the brand announced that electric vehicle sales had skyrocketed by more than 1,000 percent in 2021. However, the new grants could stifle the huge demand for EVs Vanarama is expecting in the next 12 months.
“After Boris’s cringeworthy address and Peppa Pig references to the CBI a few weeks ago, I suppose we shouldn’t be surprised to see him making a PIcG’s ear of the Plug-in Car Grant, but this situation is far from funny” said Mr Alderson. “Yesterday’s government announcement came as a complete shock to the industry and has the potential to do enormous damage both economically and environmentally. The Plug-in Car Grant and Plug-in Van grant have both been major factors in helping people make the decision to move away from older and more polluting technologies to greener and cleaner EV. We all knew grants couldn’t continue forever but to slash them so savagely and with immediate effect just as the industry prepares to hit the EV tipping point in 2022 doesn’t seem sensible at all. The government’s own plans to end petrol and diesel sales by 2030, as was talked about so much at the COP26 summit just last month, must now be in serious doubt. As a business we have hundreds of EVs on order and we now have to go back to customers and tell them the grant they would have received earlier in the week will no longer be available. We had no warning and no time to prepare. This move is ill-timed at best.”
The full changes to the Plug-In Car and Plug-in Van grants announced yesterday by the Office for Zero Emission Vehicles are:
The Plug-in Car Grant has been cut from £2,500 to £1,500 and now excludes models that cost more than £32,000.
The Plug-in Car Grant will remain at £2,500 – and £35,000 – for vehicles converted to wheelchair accessible (subject to limits).
The Plug-in Van Grant has been cut to a maximum of £2,500 for small vans (< 2.5 tonnes gross vehicle weight) and £5,000 for large vans (2.5t-3.5t GVW).
Each business, organisation or individual may receive up to 1,000 Plug-in Van Grants each financial year (1 April to 31 March). Limits apply to end customers and not to lease companies.
There are no changes to grant rates for vehicles over 3.5 tonnes.
The new terms apply from 07:00 today (Wednesday 15 December 2021). The portal has been suspended while these changes are made.
The guidance on the gov.uk website will be updated to reflect the new grant rates and eligibility criteria. A revised list of vehicles which are now eligible for the grants will be available after 12 noon today (15 December 2021) here.
For additional information: