Government to axe plug-in car grant

Representatives from the Department of Transport’s Office for Zero Emission Vehicles (OZEV) have confirmed government plans to phase out the plug-in car grant, according to the National Franchised Dealers Association (NFDA).

At a recent NFDA meeting, the OZEV stated that plug-in grants were designed to support uptake of ultra-low and zero emission vehicles in the early stages. Going forward, the government intends to “gradually deliver a managed exit” from the grants (which have been extended until 2022/23) although uptake will continue to be supported through other measures.

The government explained that the relatively low levels of demand when the grant was first introduced meant they were able to give advance notice of rate changes. However, with increasing demand, it says it “has a responsibility to manage the grant budget and to deliver value for money for taxpayers”.

NFDA chief executive Sue Robinson said: “The cost of the electric cars currently available on the market remain higher than their petrol or diesel counterparts and it is vital that buyers continue to be incentivised. Sales of electrified vehicles have been performing well but they still represent a relatively small proportion of the overall market. NFDA has repeatedly highlighted that we must avoid a situation where the least well-off drivers are deterred from buying a new, low-emission vehicle when the time comes to replace their old one.”

The electric car grant was reduced from £3,000 to £2,500 and excluded models that cost more than £35,000 back in March.