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UK Government makes changes to plug-in car grant

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As of the 18th of March, the government made effective their plan to reduce their “plug-in car grant” by £500, from £3000 to £2500, although it remained as 35% of the purchase price, without even a whisper of warning to the general public. Furthermore, the government also decreased the number of vehicles eligible for the subsidy, with only electric vehicles less than £35,000 being permitted to apply for the subsidy. Considering, only two weeks ago, all electric vehicles under the price tag of £50,000 were entitled to the grant, this change could have a prodigious impact on consumers and the growth of the electric vehicle market in the UK.

The Department justified this abrupt change in policy by referencing the swelling popularity and increasing diversity and availability of affordable electric vehicles, in which they also claimed that the majority of people able to purchase an electric vehicle around the price of £50,000 should have enough money to not require a subsidy to compel them to transition to 
e-mobility. As a result, the government has said that the reduction in the grant and the range of vehicles it applies to has been done in the best interests of taxpayers and to divert funding to those consumers willing to buy an electric vehicle but daunted by the price of them.

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The government has also attempted to legitimise their decision by stating how the proliferating demand for electric vehicles and the requirement to subsidise these vehicles is not sustainable within the borders of the government’s budget and that, in order to maintain and preserve the grant scheme for a significant period of time and to facilitate the realisation of their ambitions to eliminate all combustion engine vehicles by 2030, the changes made to the grant were imperative and needed to be implemented urgently to prevent a panic surge in orders and deliveries.

Transport minister Rachal Maclean that “The increasing choice of new vehicles, growing demand from customers, and rapidly rising numbers of charge points mean that, while the level of funding remains as high as ever, given soaring demand, we are re-focusing 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.”

Despite what the government has said, their decision to reduce the grant has been criticised from all areas of the motoring industry, being condemned particularly by the chief executive of the Society of Motor Manufacturers and Traders, Mike Hawes, who said that “it was the wrong move and that wrong time” and “New battery-electric technology is more expensive than conventional engines and incentives are essential in making these vehicles affordable to the customer. Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply.”

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Other notable voices, individuals, and organisations have remarked on how this change will complicate and will not by any means expedite the UK government’s desire to become a global leader in the electric vehicle market and clean energy and technology, in which a consistent grant system is instrumental for sustaining public interest in and demand for electric vehicles, while making the act of buying one more appealing than a conventional combustion engine vehicle. Whether this grant will be a dramatic hindrance in the government’s aspirations or a decision that needed to be made, will manifest itself in due time. Nevertheless, the changes made to the grant could have profound consequences on consumer activity in the UK and to the popularity of electric vehicles, for better or for worse, in which the government has already suggested that there will be another revision of the grant, most likely in the March of 2022. 

More details concerning the grant are available on the government website, with plug-in trucks and vans also being affected.

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