Electric car grants cut12 Oct 2018

No more subsidies for plug-in hybrids

Buyers of plug-in hybrids will soon find themselves unable to claim a government grant.

Ministers are also scaling back the money available for pure battery electric vehicles, from £4,500 to £3,500.

The plug-in car grant was introduced in 2011 since when it has been used to subsidise the purchase of more than 160,000 ultra-green vehicles.

The current grant is tiered and eligible vehicles fall into one of three categories depending on their battery-only range.

But now the scheme will focus only on those cars that have a battery-only range of at least 70 miles (current category 1 cars) which include the Nissan Leaf and BMW i3.

Those currently falling into categories 2 and 3 – effectively hybrids, such as the Mitsubishi Outlander PHEV – will in the future be excluded from the scheme.

This chart shows the top ten plug-in grant eligible cars on the road

Steve Gooding, director of the RAC Foundation, said:

“The plug-in grant schemes were never going to run on indefinitely, but the Government is taking a gamble by turning the tap off entirely for plug-in hybrids.

“Although hybrid sales are outstripping those for pure battery-electric cars the widening price differential might be enough to make some potential purchasers think again, though it’s good to see that those who opt-for any form of plug-in will still get up to 75% support for installing a charge-point at home.

“Looking at motoring costs in the round – including servicing, fuel, insurance etc – a pure battery-electric car might be an attractive option, particularly for those with off-street parking where a Government grant-supported charger can be installed.

“But with uncertainty over residual values also to be factored-in the substantial price gulf between the new and old technologies is still an issue.

“As this change to the grant hints at, the gap will need to be closed by the market rather than government in order for a true electric revolution to take place.”

The changes will come into effect on 9 November or sooner if there is a sudden surge in demand for low-emission vehicles.

ENDS

Contact:

Philip Gomm – Head of External Communications – RAC Foundation

philip.gomm@racfoundation.org | 020 7747 3445 | 07711 776448 | 020 7389 0601 (ISDN)

Notes to editors:

The RAC Foundation is a transport policy and research organisation that explores the economic, mobility, safety and environmental issues relating to roads and their users.

The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist.

All the Foundation’s work is available at: www.racfoundation.org