The government’s intention is that the grant should be targeted at more affordable models to allow more people to make the switch. From Friday, the government will provide grants of up to £2,500 for electric vehicles on cars priced under £35,000. The government believes this will make the funding last longer and be available to more drivers. Grants will no longer be available for higher-priced vehicles, typically bought by drivers who can afford to switch without a subsidy from taxpayers.
The number of electric car models priced under £35,000 has increased by almost 50 percent since 2019 and more than half the models currently on the market will still be eligible for the grant, including spacious family cars, such as the Hyundai Kona 39kWh and the MG ZS EV.
The government believes that its measures to encourage people to switch to electric vehicles are working, with nearly 11 percent of new cars sold in 2020 having a plug. This was up from just over 3 percent in 2019 – and battery electric car sales almost tripled over that same period. The plug-in vehicle grant scheme was renewed last year, with £582 million of funding intended to last until 2022 to 2023.
“We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK” said Transport Minister Rachel Maclean. “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. The government said it has always been clear since 2018 that the plug-in car grant would be reduced and that the changes introduced on Friday are the latest step in this.
However, the British Vehicle Renting and Leasing Association (BVRLA), which represents over 970 companies engaged in vehicle rental, leasing and fleet management, expressed its dismay at the announcement.
“Given the surge in battery electric vehicle adoption, it makes sense for the government to reconsider where and how it uses grants and incentives, but today’s move is poorly timed and will slow down the transition to zero emission motoring” said BVRLA Chief Executive Gerry Keaney on Friday in response to the government’s announcement. “Confidence in electric vehicles and their running costs is fragile, so slashing the grants and eligibility criteria will put a brake on the fantastic market momentum we have seen in recent months. This will come as a particular blow for the commercial vehicle sector, where BVRLA members have been working so hard to drive uptake of electric vans and trucks. Coming just months before the COP 26 summit and as other countries are increasing their zero emission subsidies, this move could also have a big impact on the supply of electric vehicles coming into the UK.”
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