Government announces reduction to electric car grant, and reduces price limit

Government announces reduction to electric car grant, and reduces price limit

Automotive industry has slammed the decision

The government has reduced the grant available on new electric cars from £2,500 to £1,500, while also limiting it to more affordable models 

The grant was only revised in March this year, when the saving was reduced from £3,000 to £2,500, and only new EVs costing under £35,000 could benefit from the incentive. However, the grant has now been slashed to just £1,500 on electric cars, while also being limited to cars costing under £32,000. 

That £3,000 drop might not sound all that significant, but it actually sees 23 different EVs either wholly or partly excluded from the grant, including popular models like the Kia e-Niro and Skoda Enyaq iV.

The government says that the plug-in car grant has supported nearly half a million new electrified models (it used to be available on plug-in hybrids), and that the grant has been reduced to ‘allow the scheme’s funding to go further and help support the switch to an EV’. 

Meanwhile grants for electric vans have been reduced to £5,000 for large models and £2,500 for smaller models, though these are limited to 1,000 customers per year. 

The decision to reduce the grant, though, has been slammed by many in the industry, with automotive trade body the SMMT saying it ‘couldn’t come at a worse time’.

Mike Hawes, chief executive of the SMMT, said: “Slashing the grants for electric vehicles once again is a blow to customers looking to make the switch and couldn’t come at a worse time, with inflation at a ten-year high and pandemic-related economic uncertainty looming large.

“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.”

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