Government plug-in car grant cut to £2,500, capped for cars costing less than £35,000
March 19, 2021 by Nick Lette van Oostvoorne
Car changing is a big deal
The Government plug-in car grant has been dropped from £3,000 to £2,500 per car and a lower price cap of £35,000 for new cars has been introduced – down from £50,000 previously.
- Plug-in car grant cut to £2,500
- Price cap dropped to £35,000
- Comes into effect 18th March 2021
- Scheme expected to last until 2023
The Government plug-in car grant is a scheme that offers buyers of new plug-in hybrid and electric cars a discount providing their new car emits less than 50g of CO2 per kilometer and can travel at least 70 miles in electric-only mode (producing no emissions).
It was introduced in 2011 to help encourage new-car buyers to make the switch to low-emissions electric and plug-in hybrid cars. Since then, around 285,000 cars have been bought as part of the plug-in car grant scheme.
Until recently, you would receive a £3,000 grant to buy a qualifying electric or plug-in hybrid car, providing it cost less than £50,000 (including VAT).
However, from 18th March 2021, the Government plug-in car grant will be reduced to £2,500 (per car) and will now only be available for cars that cost less than £35,000
This means many cars that were previously eligible for a £3,000 grant under the old scheme’s £50,000 price cap will no longer receive a subsidy.
The grant scheme was renewed in 2020 with an extra £582 million in funding. But, the increasing popularity of electric cars means more people than ever are taking advantage of the scheme.
The change to a smaller £2,500 grant amount (per car) and a lower price cap of £35,000 has been made to help the plug-in car grant funding to last until 2022 or 2023.
The reduced price car does mean that some new electric cars, such as the Volkswagen ID4, are no longer eligible for the Government plug-in car grant. But, the Government states that more than half of all new electric cars on sale will still be eligible for the new £2,500 discount.
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.”
The final point suggests that the Government grant could be reduced in coming years, or that the price cap could be dropped further.
Citroen plug-in car grant
Citroen has confirmed that it will drop the price of the e-C4 electric car in ‘Shine Plus’ trim by £550 so that it will be eligible for the revised Government grant.
The new £2,500 gran amount means that entry-level Citroen e-C4 models will cost from £30,895 while top-spec cars will set you back £32,495.
DS plug-in car grant
A spokesperson for DS cars said:
“DS Automobiles is fully committed to electrification of new cars. We have a wide offering of class-leading electrified cars on offer to UK consumers and any reduction in the incentives to support mass-market adoption is disappointing.”
Ford plug-in car grant
Graham Hoare, chairman, Ford of Britain said:
“Today’s news from the UK Government that plug-in grants for passenger and commercial vehicle customers are being reduced is disappointing and is not conducive to supporting the zero emissions future we all desire.
“Robust incentives – both purchase and usage incentives – that are consistent over time are essential if we are to encourage consumers to adopt new technologies, not just for all-electrics but other technologies too like PHEVs that pave the way to a zero emissions future.”
MG plug-in car grant
MG has confirmed it will supplement the Government’s revised £2,500 grant amount with an extra £500 discount if you buy an MG5 EV or MG ZS Electric before 31st March 2021.
There are plenty of new electric cars available with the revised £2,500 grant, however. Compare the top 10 best electric cars on sale or let carwow help you pick your perfect new car.
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