Extension announced for Plug-in Car Grant

Extension announced for Plug-in Car Grant

A long-term extension to the UK Government's Plug-in Car Grant (PiCG) has been announced today, guaranteeing it until the end of March 2018. More than 100,000 motorists over the course of the next couple of years are expected to benefit from the £400 million fund.

To reflect the changes in the market, the Department for Transport has made some changes to the PiCG. The maximum available discount on the overall purchase price drops from £5,000 to £4,500, with a weighting towards pure electric cars.

The PiGC is now linked in directly with the Office for Low Emission Vehicles' vehicle categories released earlier this year. These split the cars into three categories depending on emissions and range.

Category 1: CO2 emissions <50g/km and a zero emission range of at least 70 miles
Category 2: CO2 emissions <50g/km and a zero emission range between 10 and 69 miles
Category 3: CO2 emissions of 50-75g/km and a zero emission range of at least 20 miles

From 1st March 2016, two different grant rates will kick in, focusing on supporting those buying the greenest vehicles. Category 1 vehicles will benefit from the full £4,500 grant while Category 2 and 3 vehicles will receive £2,500. The current grant scheme will run until March 2017 or until a certain number of each grant has been awarded.

The PiCG will come under review when a cumulative total of 40,000 Category 1 claims have been made, and 45,000 Category 2 and 3 combined sales have gone through. Both these totals will include cars sold before March 2016.

A price cap will also be put in place to encourage everyday motorist's uptake of plug-in cars. Category 2 and 3 models with a list price of more than £60,000 will not be eligible for the PiCG, though all Category 1 vehicles will be able to have the full PiCG no matter what their cost.

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 five years to cut emissions, create jobs and support our cutting-edge industries."

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.”

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 £420m 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."

Ken Ramirez, Managing Director, Renault UK said: "We welcome the significant changes to the grant structure announced today. Differentiating Ultra Low Emission Vehicles into three categories and placing a clear £2,000 financial benefit for choosing the most environmentally friendly Category One vehicles over the other two categories, is recognition that the UK sees a strong future in zero tailpipe emission vehicles and the air quality benefits they offer."

Alongside the PiGC, the government has announced it will continue the Electric Vehicle Homecharge Scheme - though at a reduced cost. Plug-in car buyers will now get £500 towards the cost of installing a charging point at their home, rather than the £700 maximum.

David Martell, CEO of charging point provider Chargemaster, said: "Reducing support for electric car owners to install a charger at home is premature and a step backwards for UK carbon reduction and the necessary push towards air quality improvement. It means that many plug-in hybrid vehicle drivers will simply not bother fitting a charger at home and run their cars on fossil fuel instead. To get the full benefit of owning an EV, a homecharger is vital.

"Support for home charging offers much better value for money than many other areas that OLEV spends its resources on. It is also most regrettable that this change has been made giving little more than two months' notice. Until now, UK government has led the way in supporting charging at home.

"This move is difficult to understand when the market is still fragile and only just starting to gain momentum. It is even more surprising considering government's recent announcement that it will allocate £600m to support ultra-low emission vehicles over the next six years. To reduce its annual support for charging at home from £12m to £7.5m is unfortunate at this stage of the development of the market."

Click here for the official explanation of the new PiGC levels

Chris Lilly

Author:Chris Lilly
Date Updated:17th Dec 2015

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