The government has reduced its financial incentive package available to purchasers of electric cars, the ‘plug-in car grant,’ from £3000 to £2500.
Also, the grant will also now only apply to electric cars priced under £35,000 – the ceiling limit had already been cut to £50,000 in last year’s budget.
According to the government its decision reflects the current situation where the number of electric car models priced under £35,000 has increased by almost 50% since 2019.
The plug-in car grant scheme 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 scheme was renewed last year, with £582m of funding intended to last until 2022 to 2023.
Transport Minister Rachel Maclean said, “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.”
However, Mike Hawes, Society of Motor Manufacturers and Traders chief executive, said, “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.
“This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government’s ambition to be a world leader in the transition to zero emission mobility.”
Gerry Keaney, British Vehicle Rental and Leasing Association chief executive added, “Given the surge in battery electric vehicle adoption, it makes sense for the government to reconsider where and how it uses grants and incentives, but today’s move is poorly timed and will slow down the transition to zero emission motoring.”