End of plug-in subsidy for cars as focus shifts to improving electric vehicle charging

  • £300million in grants for the sale of electric vans, taxis and motorbikes to bring driving to net zero
  • the success of the UK’s electric car revolution is leading the government to refocus funding for plug-in grants to encourage other vehicles to ‘recharge and go green’
  • part of the government’s zero-emission travel plans, already backed by generous tax incentives for electric cars and a £2.5billion investment

The Government is today (14 June 2022) closing the plug-in car grant scheme to new orders after successfully launching the UK’s electric car revolution and supporting the sale of almost half a million cars electrical.

The program has succeeded in creating a mature market for ultra-low-emission vehicles, helping to boost sales of all-electric cars from less than 1,000 in 2011 to nearly 100,000 in the first 5 months of 2022 alone.

Battery-electric and hybrid vehicles (VE) now account for more than half of all new cars sold and sales of all-electric cars have increased by 70% over the past year, now accounting for 1 in 6 new cars hitting UK roads.

The government has always been clear that the plug-in car grant was temporary and previously confirmed funding until 2022-23. Successive reductions in the amount of the subsidy and the number of models it covers have had little effect on the rapid acceleration of sales or the ever-expanding range of models manufactured.

For this reason, the government is now refocusing funding on the main barriers to VE transition, including public charging and support for the purchase of other road vehicles when the switch to electric requires further development.

To continue the government’s drive towards net zero and ensure taxpayers’ funds are used effectively, £300m of grants will now be redirected to extending plug-in grants to boost sales of taxis, motorbikes, vans and plug-in trucks and wheelchair accessible vehicles. , as announced in the fall statement.

The change in focus will also help enable government funding to target the expansion of the network of public charging stations, helping to eradicate “range anxiety” and ensure that the transition to zero-emission transport is easy and convenient for all drivers across the UK. The government has already committed £1.6 billion to build the UK’s network of public charging stations.

Significant savings in the running costs of electric cars compared to petrol or diesel equivalents can often exceed the current £1,500 value of the grant, and electric car drivers will continue to benefit from generous incentives including zero road tax and favorable company car tax rates, which can save drivers over £2,000 a year.

All existing grant applications will continue to be honored and where a car has been sold within 2 business days of the announcement, but a dealer grant application has not yet been made, the sale will be also still eligible for the grant. .

Transport Minister Trudy Harrison said:

The government continues to invest record amounts in the transition to VE, with £2.5bn injected since 2020, and set the most ambitious phase-out dates for new diesel and petrol sales of any major country. But government funding must always be invested where it has the most impact if this success story is to continue.

After successfully launching the electric car market, we now want to use plug-in grants to match that success on other types of vehicles, from taxis to delivery vans and everything in between, to help make the shift to cheaper and easier zero-emission travel.

As billions in government and industry investment continue to flow into the UK’s electric revolution, the sale of electric vehicles is soaring.

We continue to lead the way in decarbonising transport, with generous government incentives still in place, while creating high-skilled jobs and cleaner air across the UK.

Government measures to support the adoption of electric cars over the past decade have helped to exceed forecasts for electric cars, with 39,000 new VE registrations in March 2022, more than in all of 2019. Since its inception in 2011, the government’s plug-in car grant has provided more than £1.4 billion and supported the purchase of nearly half -million clean vehicles.

A new public assessment report was released today, highlighting that while the plug-in car subsidy was key to building the first market for electric vehicles, it has since had less of an effect on demand, with other existing price incentives such as the tax on company cars. , continues to have a significant impact. The report also revealed that the plug-in van market will benefit more from incentive grants to help companies and their fleets make the switch.

While benefiting from significantly lower running and refueling costs – as low as 2 pence per mile, VE drivers can also expect to see an increase in cheaper, more reliable and faster public charging stations, as the government delivers on its commitment to install 10 times more on-street charging stations by 2030.

Since 2020, the government has committed £2.5 billion for plug-in vehicle subsidies, infrastructure and the wider transition to electric vehicles in the UK. The industry is further accelerating the shift to greener vehicles by expanding its range of more affordable zero-emission cars. A total of 24 models now cost less than £32,000, up from just 15 a year ago, and the cost of monthly buy-and-let programs has come down significantly.

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