“Registrations of ultra-low emission vehicles have taken-off in recent months and the rental and leasing industry has been leading this charge. The uncertainty surrounding the grant was threatening to hike lease prices for ULEVs and reduce their appeal to prospective customers.”
The Plug-In Car Grant was originally launched in 2011 to increase the take-up of ultra-low emission vehicles. Under the scheme, motorists can receive a 35% discount off the basic price of an eligible car, worth up to £5,000.
In April 2015, OLEV announced that the grant would be reviewed, and qualifying vehicles would be classed in three separate categories, based on CO2 emissions and zero emission range.
These are:
- Category 1 vehicles – must have CO2 emissions of less than 50g/km and a zero emission range of at least 70 miles;
- Category 2 – vehicles which emit less than 50g/km CO2 but can only travel between 10 and 69 miles on electricity alone;
- Category 3 – vehicles are classed as those which have CO2 emissions of 50-75g/km and a zero emission range of at least 20 miles.
At present, each of these three categories is eligible for the full 35% discount but the BVRLA believes this is likely to change in the coming months. Around £200M has been set aside to continue the grant scheme from 2015 to 2020 but the grant amounts made available to cars in each of the three categories may need to differentiate, in order to prevent money for the scheme running out before 2020. OLEV will also be reviewing the van grant soon but this is to remain at 20% up to £8,000 until further notice, because there have been only 1,500 van claims to date, compared to over 25,000 car claims.
