Government reduces plug-in car grant rates

EMISSIONS

The Government has cut the level of grant support to buyers of pure electric vehicles, and eliminated the grant for plug-in hybrids. 

The Plug-in Car Grant was introduced in 2011 and has so far supported the purchase of more than 160,000 ultra-low emission vehicles, of which 100,000 were plug-in hybrids.

Until now, for grant-making purposes, ultra-low emission vehicles have been placed in one of three categories, according to their carbon dioxide emissions:

• Category 1 – carbon dioxide emissions below 50g/km and a zero emission range of at least 70 miles

• Category 2 – CO2 emissions of below 50g/km and a zero emission range between ten and 69 miles 

• Category 3 – CO2 emissions of 50 to 75g/km and a zero emission range of at least 20 miles 

The grant for category 1 cars was 35 per cent of the purchase price, up to a maximum of £4,500. For category 2 and 3 cars, the maximum grant was £2,500.

But in a change announced two weeks ago and introduced with almost immediate effect, the grant is now focused on zero emission models, i.e. pure electric and hydrogen fuel cell cars, such as the Nissan Leaf and the BMW i3. 

The grant rate has been cut from £4,500 to £3,500. The Department said the reduction reflected the recent fall in the price of EVs.

Category 2 and 3 vehicles will no longer be eligible for grant support. “Plug-in hybrid vehicles are among the cleanest on the road, and can deliver significant CO2 savings compared to petrol/diesel cars,” said the DfT. “These vehicles will continue to receive support through lower car tax rates, grants for charging infrastructure and local incentives (such as free parking).”

SMMT data shows that alternatively fuelled car registrations had a market share of 5.9 per cent in the year to date (to the end of October).  Of these, 3.5 per cent were hybrid petrol-electric; 1.8 per cent plug-in hybrid electric; and 0.6 per cent battery electric vehicles. 

The total of new cars registered in the year to date was 2.064 million, down 7.2 per cent on the 2.224 million registered in the same period of 2017.