Home News Personal Tax Electric vehicle grants cut to £1.5k for lower priced cars only


Electric vehicle grants cut to £1.5k for lower priced cars only

The government has changed the grant scheme for zero-emission vehicles to remove more expensive models from the list, and pushing lower price electric cars as grant is cut by 40%

The level of grants has been cut to £1,500 from £2,500 for electric cars priced under £32,000, with currently around 20 models on the market. This removes the majority of executive cars, but the government says the grants are directed at those who need more support to make the investment in an electric vehicle.

Support for wheelchair accessible vehicles is being prioritised, with these retaining the £2,500 grant and a higher £35,000 price cap. Government’s total investment in the EV transition remains unchanged.

Grant rates for the Plug in Van Grant will now be £5,000 for large vans and £2,500 for small vans, with a limit of 1,000 per customer per year. Plug in Van Grant orders in 2021 are already over 250% higher than in 2020, demonstrating the strong shift to an electric future.

In a statement the Department for Transport said: ‘This will enable a more sustainable grant scheme and will ensure that taxpayers’ money is distributed more fairly across businesses seeking to transition their vehicles to zero emission.’

Motorcycle and moped grants have also changed, with a £500 grant towards electric motorcycles, and £150 for mopeds, with a price cap of £10,000.

Next year the government will set out its policy on expanding the charging infrastructure over the UK and will see minimum payment requirements as well as creating a comparison service so users can compare the cost of electric recharging points. There are currently only 27,000 public charging points.

Transport minister Trudy Harrison said: ‘The market is charging ahead in the switch to electric vehicles. This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further.’

Analysis shows sales of zero-emission cars are up 89% compared to 2020, and in the last three months nearly one in four new cars sold had a plug.

However, the changes to the grants, already the second reduction this year, have been criticised.

Mike Hawes, Society of Motor Manufacturers and Traders (SMMT) chief executive, 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 10-year high and pandemic-related economic uncertainty looming large.

‘Industry and government ambition for decarbonised road transport is high, and manufacturers are delivering ever more products with ever better performance. But 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.

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