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Government changes Plug-In Car Grant Overnight

Announced this morning, Thursday 18th March, the plug-in grant scheme for electric cars, vans and trucks has been amended. The government will now provide grants of up to £2,500 for electric vehicles on cars priced under £35,000. The change took effect immediately at 7am. 

The government is targeting less expensive models to reflect the greater range of affordable vehicles now available on the market. This means that the funding will last longer and be available to more drivers and enable them to make the switch to electric. 

Grants are no longer available for higher-priced vehicles, typically bought by drivers who can afford to switch without a subsidy from taxpayers. The grant had previously included vehicles priced up to £50,000.

Transport Minister Rachel Maclean said: 

“We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK.” 

“The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference.” 

“We will continue to review the grant as the market grows.”

Since 2019, the number of electric vehicle models priced under £35,000 has increased by almost 50% and over half the models currently available on the market would still be eligible for the grant, including spacious family cars, such as the Hyundai Kona 39kWh and the MG ZS EV. 

Government measures to encourage people to switch to electric vehicles are also working, with nearly 11% of new cars sold in 2020 having a plug. This was up from just over 3% in 2019 – and battery electric car sales almost tripled over that same period.

The tax incentives, including favourable company car tax rates, which can save drivers over £2,000 a year, will remain in place. 

However, just as consumer confidence in electric vehicles has been growing due to increased mileage range and lower running costs, this cut to the grant and threshold is likely to slow down sales market and ultimately the transition to zero emission motoring. 

Manufacturers and funders will be extremely busy over the coming days and weeks recalculating their price lists, rates and offers. If we have previously quoted you on an electric vehicle, the rates will now be invalid unless your order was confirmed within the last 28 days.

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