The government in the UK has announced today that it is ending the plug-in car grant scheme for plug-in and electric vehicles (EVs). Instead, it plans to concentrate funding on expanding the public chargepoint network as well as grants for electric taxis, vans, trucks, motorcycles and wheelchair accessible vehicles.
The plug-in car grant helped to kickstart the UK’s electric car revolution and supported the sale of nearly half a million electric cars. It helped to increase the sales of fully electric cars from less than 1,000 in 2011 to almost 100,000 in the first five months of 2022 alone.
Battery and hybrid electric vehicles now make up more than half of all new cars sold. Fully electric car sales have risen by 70 percent in the last year, now representing one in six new cars joining UK roads.
The government always said that the plug-in car grant was temporary and previously confirmed funding until 2022-23. Successive reductions in the size of the grant, and the number of models it covers, have had little effect on rapidly accelerating sales or on the continuously growing range of models being manufactured.
The government is now refocusing funding towards the main barriers to electric car adoption. This includes spending on public charging and supporting the purchase of other road vehicles where the switch to electric requires further development.
It plans to invest £300 million in grant funding that will now be refocused towards extending plug-in grants to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles. A list of vehicles that qualify for the new grant can be found here.
While this is a blow to anyone looking to buy a new plug-in vehicle, the significant savings in running costs compared to a petrol or diesel car will still make them an attractive option. This alone will save more annually than the current £1,500 grant.
Plus, electric car drivers will continue to benefit from generous incentives including zero road tax and favourable company car tax rates, which can save drivers over £2,000 a year.
All existing applications for the grant will continue to be honoured and where a car has been sold in the 2 working days before the announcement, but an application for the grant from dealerships has not yet been made, the sale will also still qualify for the grant.
Trudy Harrison, Transport Minister, said: “The government continues to invest record amounts in the transition to EVs, with £2.5 billion injected since 2020, and has set the most ambitious phase-out dates for new diesel and petrol sales of any major country. But government funding must always be invested where it has the highest impact if that success story is to continue.”
“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.
“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.”
Since its inception in 2011, the government’s plug-in car grant has provided over £1.4 billion and supported the purchase of nearly half a million clean vehicles.
A new public evaluation report has been published today highlighting while the plug-in car grant was vital in building the early market for electric vehicles, it has since been having less of an effect on demand, with other existing price incentives such as company car tax, continuing to have an important impact. The report also found the plug-in van market will benefit from grant incentives more to support businesses and their fleets in making the switch.
While benefitting from significantly lower running and refuelling costs, as low as 2p per mile, electric vehicle drivers can also expect to see a surge in cheaper, more reliable and quicker public chargepoints, as the government delivers its commitment to install 10 times more on-street chargers by 2030.
Since 2020, the government has committed £2.5 billion to plug-in vehicle grants, infrastructure and the wider transition to electric vehicles in the UK. The industry is further boosting the switch to greener vehicles by expanding its range of more affordable zero emission cars.
A total of 24 models are currently priced under £32,000, compared to just 15 a year ago. Plus, the cost of monthly purchase and rental schemes have fallen significantly.