In an announcement yesterday, the Department for Transport revealed updated terms to the plug-in vehicle grant scheme, which aimed to encourage electric vehicle uptake.
As part of the update, individual grants will be reduced from £3,000 to £2,500 and available only for vehicles priced under £35,000.
The grant scheme was renewed last year, with £582 million in funding pledged to last until 2023. However, the new updates mean the funding will “last longer and be available for more drivers,” according to Transport Minister Rachel Maclean.
“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,” she said.
The justification for the new price cap is also due to the fact that higher-priced vehicles are “typically bought by drivers who can afford to switch without a subsidy from taxpayers”.
“The increasing choice of new vehicles, growing demand from customers and rapidly rising number of charge points 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,” Maclean added.
Prices have fallen for electric vehicles in recent years. Since 2019, the number of electric car models priced under £35,000 has increased by 50%.
Similarly, more than half the models currently on the market will still be eligible for the grant, including “spacious family cars”.
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Motor industry representatives have criticised the move as restrictive and counterproductive to the uptake of electric vehicles.
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT) described the decision as the “wrong move at the wrong time”.
“Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply,” he said.
“This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the Government’s ambition to be a world leader in the transition to zero emission mobility.”
In a statement yesterday, the government insisted its measures to encourage the switch to electric vehicles are working. Nearly 11% of new cars sold in 2020 had a plug, marking an increase of 3% since 2019.
Battery electric car sales nearly tripled over that same period, the government added.
“We have been clear since 2018 that we intend to reduce the plug-in car grant. We are retaining support for the switch to electric vehicles through other new investments,” the government said. “Today’s changes are the latest step in this.”