Government plans to scrap the £3,500 Plug-in Car Grant subsidy for electric cars

THINKING of upgrading to a new pure-electric car? You may want to consider putting your order in sooner rather than later, as the Department for Transport (DfT) plans to fully phase out the Plug-in Car Grant subsidy.

In an interview with The Times, the transport secretary Grant Shapps confirmed the government wants to pull the plug on the grant, which allows buyers of eligible vehicles to save up to £3,500 on their new car purchase — though didn’t indicate when exactly the incentive will be scrapped.

Shapps said: “I make no bones about it. We want to remove all the subsidy. So you can see this in two ways. If you are out there reading this, thinking of buying an electric car, buy it while the subsidy’s there, because it will go eventually.”

While the transport secretary has personally benefitted from the scheme, having purchased a pure-electric Tesla Model 3 saloon, and believes the scheme is “helping people switch to the emissions-free cars of the future”, he said he can’t promise “lots of extra public bungs of taxpayers’ cash so you can buy your new car” in future.

Phasing out the subsidy for pure-electric cars appears to be at odds with the government’s plans to reduce UK emissions and its Road to Zero strategy, which will require all new cars to produce “effectively zero” emissions by 2040.

The transport secretary says he instead wants policy makers play their part in assisting drivers make the switch to zero emission vehicles, helping to “normalise electric cars as being the way forward”.

Shapps said one way the government could do this is by increasing the number of charging points across the country: “I see government’s role as being to kick-start the market, to put in sufficient charging points, because not everybody will be able to achieve it at home. I have a drive I can put a charging point on and there happens to be a supercharger down the road. That influenced me to order the car — the fact I knew there was a charging point within a mile or two.”

What type of cars are eligible for the Plug-in Car Grant?

In order to benefit from the up-to-£3,500 subsidy, drivers are required to buy a new car that has CO2 emissions of less than 50g/km, and can travel at least 70 miles on electric power alone. By default, this covers pure-electric models including the Renualt Zoe, BMW i3, Nissan Leaf, Kia e-Niro, Jaguar I-Pace, the entire Tesla range and many more options on the way from the likes of Honda, Audi, Porsche and VW. The very small number of hydrogen fuel cell models available, including the Hyundai Nexo, are also eligible.

Contrary to popular belief, the government hasn’t blacklisted plug-in hybrid (PHEV) cars from the Plug-in Car Grant scheme. However, as no PHEV model on sale can be driven on pure electric power for more than 70 miles, none currently qualify for the grant.

While PHEV buyers can no longer get a rebate on their purchase (which, before the Plug-in Car Grant scheme was revised in October 2018, was worth up to £2,500), the government hasn’t completely left them to their own devices. As long as the vehicle produces less than 50g/km 0f CO2 and can travel be driven with battery power alone for at least 10 miles, new PHEV owners are eligible for a £500 discount towards the cost of installing a charging point at their home.

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