Government cuts plug in car grant by 40% – industry responds

The plug in grant has been cut to £1,500 down from £2,500

Big Zero Report 2022

The government has today announced plans to offer grants of up to £1,500 for drivers interested in switching their old car to an electric vehicle (EV).

However, the amount to be provided is lower than the £2,500 grant when it was last cut in March.

The money will be available for cars priced under £32,000, the Department for Transport (DfT) said early in the morning.

The DfT said the update on the scheme will help more people to make the switch.

Grants for large electric vans will be £5,000 and £2,500 for small vans.

Transport Minister Trudy Harrison said: “This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit and enable taxpayers’ money to go further.”

Mike Hawes, Chief Executive of the SMMT, said today’s announcement is “a blow to customers looking to make the switch.”

Mr Hawes added: “It could not come at a worse time, with inflation at a ten-year high and pandemic-related economic uncertainty looming large.

“Industry and government ambition for decarbonised road transport is high, and manufacturers are delivering ever more products with ever better performance. But we need to move the market even faster – from one in a hundred cars on the road being electric, to potentially one in three in just eight years – which means we should be doubling down on incentives.

“Other global markets are already doing so whereas we are cutting, expecting the industry to subsidise the transition, and putting up prices for customers. UK drivers risk being left behind on the transition to zero-emission motoring.”

Edmund King, AA President described the scheme’s update as “great disappointment” for fleets and individuals.

Mr King said: “Many drivers and fleets will be recalculating today to see if they can still afford their chosen EV now that the grants and threshold have been cut. With ambitious targets heading into 2030, it seems counterintuitive to reduce incentives although we accept that those purchasing the lower value EVs probably have greater need for assistance.

“Drivers have consistently told us that the main barrier to EV ownership is the initial purchase price. While we are encouraged that new EV sales have increased this year, we feel this mainly due to company car purchases and salary sacrifice schemes.”

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