Government switches EV investments

The government’s decision to close the plug-in car grant scheme for new orders has received a mixed response from the industry.

While it is expected to have a negative impact on EV adoption in the car market, further investment in the commercial sector and EV infrastructure is welcome.

Mike Coulton, EV consultant at Volkswagen Financial Services UK, said: “While it should not come as a surprise to see the government has brought to a close the Electric Vehicle Plug-In Car Grant (PICG), it is nonetheless hugely disappointing that more is not being done to encourage and support lower-income households in the transition to EVs.

“Maintaining or even increasing the PICG for the least expensive EVs to make them more affordable, and encourage manufacturers to produce electric cars at a lower price-point, could have been a strong incentive to help adoption for this sector of the market. This in turn would help to remove older and dirtier ICE (internal combustion engine) vehicles in the same way that scrappage schemes have successfully done in the past.

“That said, the government’s focus on further improving public charging, whilst still incentivising adoption in other areas of the vehicle market such as LCVs is to be welcomed and encouraged. We would ask that further clarity is urgently provided in key areas, such as BIK rates beyond 2025, and a realignment of the AER rates to reflect the costs of charging an EV away from home, for those who cannot make use of a cheaper overnight electricity tariff.”

Meanwhile, Toby Poston, director of corporate affairs at the BVRLA, said: “This move has been well signposted and it is right that the government prioritises its electric vehicle subsidies towards vans and charging infrastructure, where they are needed most.

“Although the grant was small and only a handful of electric vehicles were eligible, its withdrawal will be a symbolic moment that could damage confidence in the fragile EV market.

“Most demand for EVs is being driven by the favourable Benefit-in-Kind tax rates available to workers in company car or salary sacrifice schemes. As inflation surges and business and consumer confidence falls, government needs to maintain these incentives if the country is to have any chance of hitting its ambitious decarbonisation targets..

“Our big concern is for the thousands of drivers that have already ordered EVs in good faith, expecting to get the benefit of the grant. The supply issues that continue to beset the automotive industry mean that many vehicle orders are being delayed or even cancelled. OZEV should review its decision to remove grant eligibility for vehicles delivered more than 12 months after an order was entered on the grant register.”