Plug-in grant to focus on zero emission cars

Funding support for purchases of electric vehicles is to be reduced or stopped altogether for some categories but will run for a further 35,000 vehicles.

In an announcement yesterday (11 October), the Department for Transport and the Office for Low Emission Vehicles, noted that over the last seven years, the Plug-in Car Grant (PICG) has provided a discount to the price of over 160,000 new ultra-low emission cars.

Explaining the reductions in incentives, the government pair said these “reflect the ongoing success of the PICG in increasing uptake of electric vehicles, a key part of the government’s Road to Zero strategy.

They added: “The PICG has helped the plug-in hybrid market become more established, and the government will now focus its support on zero emission models like pure electric and hydrogen fuel cell cars.

“The changes to the grant announced today will mean that the grant rate for Category 1 vehicles will move from £4,500 to £3,500 and Category 2 and 3 vehicles will no longer be eligible for the grant.”

plug in

Grants are to remain for electric-powered vehicles but will be reduced

Early market

The PICG was first introduced in 2011 to help stimulate the early market for ultra-low emission vehicles.

In their statement, OLEVand the DfT said that with plug-in hybrid models like the Mitsubishi Outlander becoming popular among consumers, the government is focussing its attention to zero emission models such as the Nissan Leaf and BMW i3.

They explained: “Plug-in hybrid vehicles are among the cleanest on the road, and can deliver significant CO2 savings compared to petrol/diesel cars. These vehicles will continue to receive support through lower car tax rates, grants for charging infrastructure and local incentives (such as free parking).”

And, following the success of the PICG scheme the government has rolled out Plug-In Van, and Motorcycle grants, available to both private and business buyers across the UK.

Following the Last Mile call for evidence, and in light of evidence from other countries, a £2 million fund is planned. This will contribute 20% of the purchase price of new e-cargo bikes, up to a threshold of £5,000. Funding will be conditional on individual businesses following a code of cycle safety good practice.

Air quality

This new fund, said DfT and OLEV, will help to cut congestion and improve air quality, encouraging companies to replace older, polluting vans with a zero emission alternative to create a cleaner, greener future. Money will be split between larger fleets and smaller operators to ensure benefits are available to and spread between all sizes of business.

FACTS AND FIGURES (source: DfT and OLEV)

Ultra-low emission vehicles are placed into different categories on the basis of their CO2 emissions and their zero emission range:
Category 1 – CO₂ emissions of less than 50g/km and a zero emission range of at least 70 miles
Category 2 – CO₂ emissions of less than 50g/km and a zero emission range between 10 and 69 miles
Category 3 – CO₂ emissions of 50 to 75g/km and a zero emission range of at least 20 miles

The changes to the grant will mean:

  • the grant rate for Category 1 vehicles will move from £4,500 to £3,500
  • Category 2 and 3 vehicles will no longer be eligible for the grant
  • new grant rates will come into effect on Friday 9 November – if sales are higher than expected, we may reduce grant rates earlier than this date
  • a new grant rate for category 1 vehicles will be set at £3,500 to reflect the recent reductions in the price of electric vehicles – Category 1 vehicles have CO2 emissions of less than 50g/km and can travel at least 112 kilometres (70 miles) without any CO2 emissions from the tailpipe at all
  • See Low-emission vehicles eligible for a plug-in grant for more details.