Government axes EV plug-in car grant

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THE government decision to axe the plug-in car grant has come under fire from industry organisations, dealers and leasing brokers who describe the move as a step backwards.

The DfT said the £1,500 discount on cars costing less than £32,000 is being discontinued as it ‘has little effect’ on the current rise in new electric car sales and funding will now be refocussed on a public charging network, seen as one of the main barriers to EV transition.

The grant will be closed to new car orders although it does not affect plug-in taxis, small and large trucks and vans, mopeds, motorcycles and wheelchair accessible vehicles.

In a statement, the DfT pointed out that the plug-in grant for cars was always temporary and “have had little effect on rapidly accelerating sales, or on the continuously growing range of models being manufactured”. Electric cars already sold through the scheme two working days before the announcement – 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 Society of Motor Manufactures and Traders (SMMT) said the announcement sends out the wrong message. Chief Executive Mike Hawes added: “With the sector not yet in recovery, and all manufacturers about to be mandated to sell significantly more EVs than current demand indicates, this decision comes at the worst possible time. If we are to have any chance of hitting targets, government must use these savings and compel massive investment in the charging network, at rapid pace and at a scale beyond anything so far announced.”

Dealers and leasing brokers also slammed the move saying that the grant was often a key factor in the decisions making process in terms of whether to buy electric or a conventional ICE vehicle.

Karl Howkins, managing director of SOGO mobility, said: “The government has severely misjudged the situation with the removal of the plug-in car grant. As fleet and personal adoption of EVs start to make a meaningful impact on the UK car park, a key incentive is removed.

“Green mobility sits at the heart of SOGO and it’s our mission to help people and companies make more environmentally friendly journeys. The road to net-zero emissions still has significant hurdles for both cars and van fleet. Now is the time for additional measures to be put in place to accelerate change rather than applying the brakes.”

Paul Hollick, chair at the AFP, said: “This is, to our mind, a premature move by the government. The various tax incentives and grants that have been made available to speed EV adoption are playing an important part in businesses and their drivers choosing electric cars. At a time when both vehicle prices and costs are rising, the removal of the grant makes the process of electrification notably more expensive at the sub-£32,000 end of the market where it applied.

“Our worry is that there is a general belief among government decision makers that the EV company car market now has sufficient momentum and can be left to its own devices. We are concerned that similar moves may be made around benefit-in-kind taxation from the middle of the decade, which is an area where we feel there very much needs to be a ‘soft landing’ over time.

“What the government should note is that the impetus behind EV use by businesses is yes, partially driven by environmental concerns but also by financial advantages. If the sums for operating EVs don’t stack up, adoption could very well slow down.

“Of course, all of this is happening against a backdrop of EVs of all kinds simply becoming very hard to get hold of, which further complicates the issue. Anyone ordering an electric company car today will likely not receive it for a year and could still be driving it in 2027-28. That creates a long-term financial risk for employers and drivers that is extremely difficult to forecast.”