Government announces further cuts to grants for plug-in cars, vans, motorbikes

Wed 15 December 2021 View all news

The Office for Zero Emission Vehicles (OZEV) has announced cuts to plug-in vehicle grants and changes in eligibility criteria, effective from 7am today (Dec 15). The cuts mean a battery electric car costing below £32,000 will be eligible for a £1,500 subsidy. There are also cuts in grant levels for vans and substantial reductions for motorbikes and mopeds.

The Government points to surging electric vehicle sales and says that the grant schemes have been updated to target less expensive models, allowing the scheme’s funding to go further and to help more people make the switch.

Battery electric cars formerly attracted a grant of £2,500 if priced under £35,000. There are currently around 20 models on the market that are eligible under the new rules. Wheelchair accessible battery electric vehicles will, however, retain the £2,500 grant and the higher £35,000 price cap. 

Grant rates for the Plug in Van Grant are now £5,000 (down from £6000) for large vans and £2,500 (from £3,000) for small vans, with a new limit of 1,000 vehicles per customer per year. 

In a surprising move, motorcycle and moped grants were also cut with grants now providing £500 off the cost of a motorcycle, and £150 for mopeds, with a price cap on vehicles of £10,000. The Government had been offering a 20% discount up to a maximum of £1,500 off the cost of both electric motocycles and mopeds. 

OZEV points out that almost 50% of mopeds sold this year were battery electric, with some models now at price parity (after the original grant) with their internal combustion engine equivalents. 

Defending the changes, Transport Minister Trudy Harrison MP said: "The market is charging ahead in the switch to electric vehicles. This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further.

"Generous tax incentives for EVs remain in place, including favourable company car tax rates, which can save drivers over £2,000 a year and we expect the total cost of EV ownership to reach parity during the 2020s compared to petrol and diesel cars."

She added: "The market responded to the last changes to the plug-in grants in March 2021 with car manufacturers dropping prices for 18 zero emission models."

Alongside the plug-in vehicle announcement, the Government also said that it will introduce new rules next year intended to increase confidence in the UK's EV charging infrastructure. The rules will mandate a minimum payment method – such as contactless payment – for new 7.1 kW and above charge points, including rapids. Motorists will also soon be able to compare costs across networks which will be in a recognisable format similar to pence per litre for fuel and there will be new standards to ensure reliable charging for electric vehicle drivers.

Commenting on the revised grants, Andy Eastlake Zemo Partnership CEO said ” Whilst a revision to the car grants was inevitable with the burgeoning sales of BEV cars (over 10% of the new car market YTD), ultra low and zero emission vans make up only around 3.5% of the rapidly growing market, and though electric scooters are making great progress, all other segments of the powered light vehicle (PLV) sector still need significant support.

"It's also worth remembering the many additional mechanisms (Company Car Tax, and salary sacrifice in particular) which are all driving the ULEV car market but which are not available yet in other sectors. Zemo will continue to work with government to channel the incentives where they can help to drive all transport options to zero emissions.”

Image: Pixabay (free)


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