Electric car grant scheme axed by government sends ‘wrong message’

The Department for Transport (DfT) has announced the closure of the grant scheme for electric cars, claiming that a “mature market” has already been created.

Under the grant scheme, drivers were able to claim up to £1,500 towards the cost of a plug-in car costing below £32,000.

The government has now said it wants to “refocus” its grant funding to encourage the take-up of other types of electric vehicle.

The Society of Motor Manufacturers and Traders (SMMT) criticised the decision saying that it sent the “wrong message” to consumers at a time when the UK is attempting to move towards net zero carbon emissions.

“Whilst we welcome government’s continued support for new electric van, taxi and adapted vehicle buyers, we are now the only major European market to have zero upfront purchase incentives for EV car buyers yet the most ambitious plans for uptake,” said SMMT chief executive Mike Hawes.

The DfT said the scheme would be ended because a “mature market for ultra-low emission vehicles” had been created, with sales of fully electric cars rising from less than 1,000 in 2011 to almost 100,000 in the first five months of 2022 alone.

Successive reductions in the size of the grant, as well as the number of models it covers, have had little effect on rapidly accelerating sales or on the continuously growing range of models being manufactured, the DfT added.

Battery and hybrid electric vehicles (EVs) now make up more than half of all new cars sold and fully electric car sales have risen by 70 per cent in the last year, now representing one in six new cars joining UK roads.

“With the sector not yet in recovery, and all manufacturers about to be mandated to sell significantly more EVs than current demand indicates, this decision comes at the worst possible time,” Hawes said.

The government said it wanted to apply more focus on what it described as “the main barriers to the EV transition” such as a lack of public charging points and supporting the purchase of other road vehicles where the switch to electric requires further development.

Some £300m in grant funding will now be applied to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles. The government has already committed £1.6bn to building the UK’s public chargepoint network.

The UK currently faces vast regional discrepancies on charging points across the country, with 102 public charging devices per 100,000 people in London compared to just 24 charging devices per 100,000 people in the North West.

Transport minister Trudy Harrison said: “The government continues to invest record amounts in the transition to EVs, with £2.5bn injected since 2020, and has set the most ambitious phase-out dates for new diesel and petrol sales of any major country. But government funding must always be invested where it has the highest impact if that success story is to continue.

“Having successfully kickstarted the electric car market, we now want to use plug-in grants to match that success across other vehicle types, from taxis to delivery vans and everything in between, to help make the switch to zero emission travel cheaper and easier.”

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