Plug-in car grant fund given £400m extension

Department for Transport says extending grant to end of March 2018 will benefit 100,000 people over the coming years

The government’s Plug-In Car Grant will be extended to at least March 2018 after it was given a £400 million funding boost to further encourage the uptake of ultra-low emission vehicles, the Department for Transport announced today (December 17).

DfT says around 50,000 people have benefitted from the Plug In Car grant since it was introduced in 2011

It means the grant will be extended beyond the latest guarantee of February and could see more than 100,000 people benefit over the coming years – double the number who have already claimed the grant since 2011.

As a result, from next March the buyers of the greenest cars will be able to save up to £4,500 off the overall purchase price of an ultra-low emission vehicles (ULEV).

According to the government, since it was created in 2011, the Plug-In Car Grant has been “instrumental in the UK becoming the biggest ULEV market in the EU, and the fourth largest in the world” with around 50,000 people benefitting from the grant so far.

From March 1 2016, two grant rates will be available. ‘Category 1’ vehicles with a zero emission range of over 70 miles will benefit from a grant of £4,500, while ‘Category 2 and 3’ vehicles with a shorter zero emission range – such as plug-in hybrid vehicles with a petrol or diesel engine – will receive £2,500.

DfT said the new grant levels reflect the strong growth in the sector with sales of ULEVs doubling over the past year, with motorists now having a wider choice of 29 ULEVs on the market – 5 times as many as there were in 2011.

Hydrogen fuel cell vehicles, which also produce zero tailpipe emissions, are also eligible for the £4,500 grant.

Homecharge grant

Meanwhile, the government has also today announced it will continue to provide a grant to help ULEV owners have a dedicated charge point installed at their home.

From March 1 2016, the Electric Vehicle Homecharge Scheme will offer £500 per installation, which on average will cover around half of the cost of getting a charge point.

Both the Plug-In and Homecharge grant schemes are part of the recently-announced £600 million package of measures from the Office for Low Emission Vehicles (OLEV) over the course of the next parliament, with the government committing to make nearly all cars and vans zero-emission by 2050 (see AirQualityNews.com story).

To encourage zero emission vehicles and “maximise the number of everyday motorists who can benefit from government support”, a price cap will also be introduced from 1 March 2016.

Category 2 and 3 models with a list price of over £60,000 will not be eligible for the grant, but all category 1 vehicles with a zero emission range of over 70 miles will be eligible for the full £4,500 grant.

The news comes today as DfT published its first walking and cycling investment strategy up to 2040, which sets a long-term vision for walking and cycling.

‘World leader’

Transport Minister Andrew Jones said: “The UK is a world leader in the uptake of low emission vehicles and the plug-in car grant has been key to that success. Extending the grant in a sustainable way ensures more than 100,000 people will benefit from financial support when purchasing these cheap-to-run and green cars. We are determined to keep Britain at the forefront of the technology, increasing our support for plug-in vehicles to £600 million over the next 5 years to cut emissions, create jobs and support our cutting-edge industries.”

Jim Wright, Nissan GB managing director, said: “Today’s decision by government has reaffirmed their commitment to the uptake of ultra-low emission vehicles. With government support and Nissan’s investment of over £420 million into electric vehicles in the UK, our British made Nissan LEAF has increased in popularity with many UK customers already enjoying the benefits of zero emission and low cost driving. This announcement, together with ongoing infrastructure developments, should see the growth and wider deployment of this technology continue.”

Mike Hawes, SMMT chief executive, said: “We welcome the continuation of the Plug-in Car Grant, which has helped Britain become the fastest-growing market for ultra-low emission vehicles in Europe.

“The recently agreed global climate change targets underscore the important contribution ultra-low emission vehicles make — and will continue to make — to reducing carbon emissions. Manufacturers are offering increasing numbers of these vehicles — but a consistently applied incentive regime is still needed over the coming years to help consumers adopt these ground-breaking technologies.

“The changes to the regime will need effective management and SMMT looks forward to working with government to ensure the planning needs of manufacturers and consumers — both fleet and private — are met.”