Changes announced to plug-in car, van and truck grants

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The grant scheme for electric cars, vans and trucks has been updated to target less expensive models to allow the scheme’s funding to go further and help more people make the switch to an electric vehicle.

From 18th of March, the government will provide grants of up to £2,500 for electric vehicles on cars priced under £35,000.

Grants will no longer be available for higher-priced vehicles, typically bought by drivers who can afford to switch without a subsidy from taxpayers.

The plug-in vehicle grant scheme was renewed last year, with £582 million of funding intended to last until 2022 to 2023.

Transport Minister Rachel Maclean commented on the announcement: “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.

“The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints 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 – where most consumers will be looking and where taxpayers’ money will make more of a difference.

“We will continue to review the grant as the market grows.”

The number of electric car models priced under £35,000 has increased by almost 50% since 2019 and more than half the models currently on the market will still be eligible for the grant, such as the Hyundai Kona 39kWh and the MG ZS EV.

Nearly 11% of new cars sold in 2020 had a plug, up from just over 3% in 2019 – and battery electric car sales have almost tripled over that same period.

The plug-in car grant was introduced 10 years ago to stimulate the early market for zero emission vehicles.

Since 2011, government has provided close to £1.3 billion in plug-in vehicle grant funding to bring ultra-low emission vehicles onto UK roads, supporting the purchase of more than 285,000 vehicles.

The government has stated since 2018 that they intend to reduce the plug-in car grant, intending to retain the support for the switch to electric vehicles through other new investments. Today’s changes are the announced to be the latest step in this.

Tax incentives, including favourable company car tax rates, which can reportedly save drivers over £2,000 a year, will remain in place.

The government is also investing more than £15 billion of new money in alternatives to cars, including:

  • £3 billion for buses.
  • £2 billion for cycling.
  • More than £4 billion for local transport in cities.
  • £5 billion for enhancements to the rail network, including electrification and reopening lines closed under the Beeching cuts.

More information about the Plug-in car grants and Plug-in van and truck grants is available on the government website.