Government reduces plug-in car grant for electric cars

Government reduces plug-in car grant for electric cars


The UK government has again reduced the plug-in car grant for electric cars. In an announcement published on 18th March, the Department for Transport (DfT) and the Office for Zero Emission Vehicles (OZEV) confirmed that the grant scheme for electric cars, vans and trucks has been updated.

Effective immediately, the government will provide grants of up to £2,500 – down from £3,000 – for electric vehicles on cars priced under £35,000 (previously less than £50,000).

The plug-in van grant has also changed. It previously covered up to 20% of the van’s cost to a maximum of £8,000. Now, plug-in van grants cover 35% of the purchase price for small vans, up to a maximum of £3,000. They will also pay for 35% of the purchase price for large vans, up to a maximum of £6,000.

According to today’s joint announcement from the DfT and OZEV, the update has been made in order to target less expensive models and reflect a greater range of affordable vehicles available, allowing the scheme’s funding to go further. Ostensibly, this will mean the funding should last longer and be available to more drivers.

UK drivers are already making the switch to electric vehicles. As of the end of February 2021, there were more than 455,000 plug-in vehicles registered in the UK – with approximately 215,000 battery-electric vehicles (BEV) and 240,000 plug-in hybrids (PHEV). 2020 saw the biggest annual increase in number of registrations, with more than 175,000 electric vehicles registered, showing a growth of 66% on 2019 despite the impact of coronavirus.

Transport Minister Rachel Maclean said:

“We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK.

“The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference. We will continue to review the grant as the market grows.”

The plug-in car grant, which was renewed last year, is due to continue until early 2023, with £582 million of funding. After 2023 it could be phased out entirely.