2 years ago
The government has axed the plug-in car grant as it ‘has little effect’ on the current explosion in new electric car sales.
The Department of Transport (DfT) said today (June 14) that the scheme – which gives a £1,500 discount on cars costing less than £32,000 – will be closed to new car orders.
The move comes as full-electric car sales have risen by 70 per cent in the last year.
In the announcement, the DfT said the funding will now be ‘refocussed’ on the ‘main barriers in the EV transition’, namely public charging.
The grant is only ending for cars, however, and does not affect plug-in taxis, small and large trucks and vans, mopeds, motorcycles and wheelchair accessible vehicles.
The DfT reiterated the plug-in grant for cars was always ‘temporary’, and that despite reductions in the grant offered and the number of cars it covered, [the reductions] ‘have had little effect on rapidly accelerating sales, or on the continuously growing range of models being manufactured’.
Dealers that have already sold electric cars through the scheme two working days before the announcement today (June 14) will still qualify.
Transport minister Trudy Harrison said: ‘With billions of both government and industry investment continuing to be pumped into the UK’s electric revolution, the sale of electric vehicles is soaring.
‘We are continuing to lead the way in decarbonising transport, with generous government incentives still in place, while creating high skilled jobs and cleaner air across the UK.’
The axing of the grant has been criticised by Ginny Buckley, founder and CEO of electric car website Electrifying.com, though. She warned the move will now cause ‘a two-tier nation’ and will affect hard-working families.
‘Electric cars are already out of reach for many hard working families and I fear this pushes us further down the road of becoming a two tier nation when it comes to ownership,’ she said.
‘As the government points out sales have risen by 70 per cent in the last year, and now represent one in six new cars joining UK roads.
‘But dig a little deeper and those figures reveal that a large proportion are registered to business users benefiting from financial incentives including salary sacrifice schemes and low benefit in kind taxation.’
Buckley added: ‘This grant made a big difference to many hard working families and removing it seems short sighted, particularly as the Scottish government announced last week that £28m will be made available as part of the Low Carbon Transport Loan scheme, giving drivers up to £28,000 in interest-free loans for a new electric car and up to £20,000 for a second hand one.’
Government figures show that since being introduced in 2011, the plug-in car grant has provided over £1.4bn in savings.
As of December 2021, the grant offered a discount of £1,500 on cars costing £32,000 or less, and meant less than 25 EVs qualified.
That reduction was widely lampooned by dealers and car manufacturers, with one retailer telling Car Dealer at the time: ‘Can they make this any harder for us?
‘It’s absolutely shocking they’ve done this. Yes, electric car sales are up but this is a kick in the teeth.’
The rules had been changed in March last year cutting the threshold from £50,000 to £35,000 and the subsidy from £3,000 to £2,500.
At the time, the Society of Motor Manufactures and Traders (SMMT) had called for the plug-in car grant to be preserved, while December’s cut prompted AA president Edmund King to call for VAT on EVs to be cut rather than subsidies.
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