Plug-in car grant changes come into effect early

“Exceptional demand” forces Government to enforce less generous plug-in car grant structure earlier than planned

Recently announced changes to the Government’s Plug-in Car Grant have been brought into effect earlier than planned, after “exceptional demand” saw the remaining incentives snapped up by car buyers across the country.

It brings to an end the £2,500 discount available on a range of plug-in hybrid (PHEV) cars, while the £4,500 discount available on most electric cars has been reduced to £3,500.

The changes had been due to come into force on 9 November, but the Office for Low Emission Vehicles (OLEV), which controls the grant, made it clear that only 6,000 more PHEVs and 3,000 electric cars would be eligible for the outgoing grant levels.

A spokesperson for the Department for Transport (DfT) said the plug-in car grant had “been a runaway success” that had helped introduce “more than 160,000 ultra-low-emission vehicles to our roads over the last seven years.”

“Following exceptional demand, the sales cap for all vehicles eligible for the grant has been reached, and the new grant rates are now in effect,” continued the DfT.

“These changes will allow us to focus support on zero-emission vehicles, such as pure electric and hydrogen fuel-cell cars. Hybrid vehicles will continue to be supported through lower car tax rates, grants for charging infrastructure and local incentives such as free parking.”

The new Plug-in Car Grant changes explained

The Plug-in Car Grant was designed to encourage the uptake of low-emission vehicles, and with so much importance placed on the environment and clean air these days, the decision to withdraw incentives for plug-in hybrids caused disbelief in some quarters of the car industry.

However the Government says it needs to “focus its support” on zero-emissions vehicles, and it believes the new structure reflects “recent reductions in the price of electric vehicles.”

Until now, cars falling into the Government’s top three low-emission categories have been eligible for the grant. Category 1 cars emitting less than 50g/km of CO2 and capable of travelling at least 70 miles with no emissions at all qualified for a £4,500 discount, provided they cost less than £60,000.

A £2,500 concession was available for Category 2 and 3 cars; the former emit less than 50g/km of CO2 but have a zero-emissions range of between 10 and 69 miles; the latter emit between 50 and 75g/km of CO2 and have a zero-emissions range of at least 20 miles.

However, Category 2 and 3 cars are no longer eligible for any grant whatsoever, effectively ending support for PHEVs. Category 1 cars on the other hand still qualify, although the reduction on offer will drop from £4,500 to £3,500.

In theory, a PHEV could one day be classified as a Category 1 car and earn the new £3,500 discount, however no plug-in hybrid currently on sale offers anything close to the 70 miles of zero-emissions range required.

Also telling is the Government’s commitment “to support purchasing the next 35,000 of the cleanest vehicles,” implying that funding for the grant will be revised again in the near future. More than 11,000 pure-electric cars have been sold since the start of 2018 already, suggesting that the latest criteria could be relatively short-lived.