The End of the Plug-in Car Grant: What You Need to Know
In a significant shift of policy, the UK government accounced on Tuesday, 14th June, the discontinuation of the Plug-in Car Grant. This grant has been a vital financial incentive for potential EV buyers, offering a discount of up to £1,500 for EVs priced under £32,000.
A Retrospective Glance
The Plug-in Car Grant came into effect in 2011, originally providing a substantial £5,000 discount on all plug-in vehicles. At that time, however, the EV market faced lukewarm reception, with only 1,000 units sold in the inaugural year.
Over the years, as electric vehicles gained traction and consumer interest, the grant amount was progressively reduced. Despite the decrease in the grant value, the number of EVs sold soared. For instance, in the first five months of 2022, a staggering 100,000 fully electric cars were sold, while the grant was fixed at £1,500.
The Rationale Behind the Axe
The decision to scrap the grant stems from the government’s observation that the EV market is not robust and growing rapidly, with diminishing reliance on financial incentives. With the sales of electric vehicles gaining momentum, the government has redirected its funding focus towards enhancing public charging infrastructure. The £300 million previously allocated for the Plug-in Car Grant, will not be channelled to extend plug-in grants to promote sales of plug-in taxis, motorcycles, vans, trucks and wheelchair-accessible vehicles.
Considering the bigger picture
It’s worth noting that the savings generated from the considerably lower running costs of electric cars, when compare to their petrol or diesel counterparts, often outweigh the current value of the grant. Additionally, EV owners stand to benefit from zero road tax and favourable company car tax rates, resulting in annual savings of over £2,000 for drivers.
The discountinuation of the Plug-in Grant signifies a pivotal moment in the UK’s transition to a greener automotive landscape. While ti might impact prospective EV buyers in the short term, the government’s renewed focus on bolstering the public charging network and extending grants to various electric vehicle segments indicates a long-term commitment to sustainable mobility.
Don’t worry if you already have an existing application or have purchased a car in the past two working days before the announcement but an application for the grant from dealerships has not yet been made, the sale will also still qualify for the grant.