Government also announces changes to plug-in car and plug-in van grant scheme, which has been extended to 2020
The popularity of ultra-low emission vehicles â€œcontinues to rise sharplyâ€ in the UK, according to the government, with more than 25,000 plug-in vehicle grant claims submitted in the last five years.
The government also announced on Friday (February 13) that it has made Â£200 million available to continue the plug-in car grant from 2015 to 2020.
Some ultra-low emission vehicles (ULEVs) such as electric and hydrogen fuel cell vehicles, produce zero air pollution emissions at the tailpipe, thereby helping to cut pollution from traffic and benefitting air quality.
First introduced in 2010 by the Office for Low Emission Vehicles (OLEV), the plug-in car and plug-in van grant scheme aimed to encourage the uptake of ultra-low emission vehicles (ULEVs) by enabling car buyers to claim a 25% discount on the purchase of eligible electric vehicles, capped at Â£5,000.
And, the Department for Transport (DfT) revealed on Friday that the scheme is being updated and the discount raised to 35% from April 2015, in order to â€œtake account of rapidly developing technology, and the growing range of ULEVs on the marketâ€.
This 35% discount essentially works as a grant, which the government pays directly to manufacturers up to a maximum of Â£5,000 per vehicle.
The plug-in grant is deducted from the price of the vehicle and charge point at the point of sale by the dealership, meaning there is no paperwork for the customer to complete in order to benefit from the grant.
According to OLEV, there were nearly 2,000 claims in January last year, while total sales of ULEVs in 2014 were four times the level of the previous year. This means that the UK is now ahead of France and Germany in ULEV take-up.
There are now 25 car models and seven van models eligible for the plug-in grant, while the government expects a further 40 ULEV models from major manufacturers to come on to market over the next three years.
Under the plug-in grant scheme, eligible ULEVs must meet criteria in one of the following categories depending on emission levels and zero-emission-capable mileage from April 2015:
Vehicles in all categories will continue to be eligible for the full grant of up to Â£5000, until either 50,000 grants are issued or 2017, whichever is first.
According to OLEV, the new categories will â€œbetter reflect the range of vehicles on the market and make them accessible to the widest range of peopleâ€.
Transport Minister Baroness Kramer said: â€œMore and more people are deciding a ULEV is the right choice for them. They are great to drive, easily chargeable at home or on the street, and cheap to use with running costs from just 2 pence a mile. The governmentâ€™s Â£500 million investment will help more models become available to suit a wide range of budgets. This thriving industry will support jobs and build a stronger economy.â€
The availability of the grant scheme is being promoted as part of the Go Ultra Low campaign, wich is jointly funded by government and industry and aims to increase consumer and fleet uptake of ULEVs.