The UK Plug-in Car Grant (PiCG) will now offer a subsidy of £3,000 per vehicle, and there’s a new restriction limiting funding available for models costing up to £50,000.
As announced in the yesterday’s Budget (Wed 11th March), the PiCG has been extended and guaranteed until at least 2022/23, with £403 million in funding available.
Following on from the initial announcement, additional details were confirmed, with the grant available reduced from £3,500 for any qualifying pure-electric car regardless of cost. Changes will come into effect on orders placed from today onwards.
Since the announcement was made after around 1pm on the 11th March and the change in policy due to begin from after 11:59pm the same day, there has been effectively no notice for alterations to be made.
The grant has always been subject to conditions, which is why a price excluding grant is always provided. However, there will be a number of drivers that have ordered their car, but the vehicle hasn’t yet been delivered, who may find the cost increasing by £3,000 overnight.
Having been in place in one form or another since 2011, the PiCG has seen funding levels altered as the market has progressed. Initially available for both pure-EVs and PHEVs, funding was then split between the two powertrain types, before being removed for PHEVs altogether.
As sales of pure-electric cars in the past half a year or so have proven extremely strong – particularly in comparison to the overall market – a change in PiCG levels in the Budget was expected. There remains a good level of financial support from the grant however, and the move to put a price cap on funding will seem logical to many buyers.
Although buyers of cars over £50,000 will lose out on £3,500 worth of grant, there was good news for them in the Budget as the Premium Rate is removed from all pure-electric models. As such, more than £1,600 will be saved in VED over the first six years of ownership, reducing the impact a little of the drop in funding.
Those buyers that benefit most are those buying models costing between £40,000 and £50,000. They will see a significant proportion of the PiCG retained whilst also benefiting from the removal of the Premium Rate for EVs that would have had to have been paid.