posted 3 weeks ago

Motoring Industry Calls for Rethink over Plug-In Grant Cuts

The Government seems somewhat short-sighted in aiming towards new cars on our roads having ultra-low emissions

Last week the Government announced it was tightening its purse strings when it comes to motorists going green. As of November 10th, you’ll only be granted £3,500 in government funds off a pure EV, that’s £1,000 less than what you’d get right now.

The OLEV scheme has always been used as an incentive, to bring zero and low emission vehicles into the realm of affordability for average Joe motorist. It effectively nullified the premium price of EV’s and bought them in line with range-topping diesels.

Suddenly a VW e-Golf costs £28k not £33k. While it’s still a lot of money, you might consider it instead of a GTD as it now falls within your budget. The grant is a superb way to incentivise people who normally wouldn’t dream of going electric. That goes for plug-in hybrids too. Sadly, they’ve got an even worse deal.

These new changes mean that vehicles emitting less than 50g/km of CO₂ with a zero-emission range of 10-69 miles aren’t eligible for any funding. The same goes for cars that produce 50-75 g/km of CO₂ and can drive at least 20 miles on battery power. That means all plug-in hybrids lose their £2,500 grant; these cars are arguably the stepping stone before the eventual switch to full-blown EV’s. This loss will no doubt impact plug-in hybrid sales in a big way.

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Although these cuts will happen at precisely 23:59 on November 9th there’s ultimately going to be an order race with people bringing forward the purchase of their next car to take advantage of the current higher grant rate.

To counter this predicted surge, the Government have set secretive limits during the ‘transition period’ that only they know of. If demand is that great and the limits are reached then the new grant rate will take effect the next working day, sneaky.

OLEV have released some figures showing that since the announcement there have been roughly 1,064 PHEV’s and EV’s ordered every single day. Compare that to the whole of last year, and the average sales for both pale in comparison at just 329 per day. That’s over three times as many being sold in the previous week alone.

If you already have a car ordered and the dealer has filed the correct OLEV paperwork, you’ll get the grant. However, your vehicle must be delivered within nine months of the order being submitted.

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Another relief is that the EVHS or Electric Vehicle Homecharge Scheme which pays £500 towards a charger being installed at your home isn’t changing.

It also doesn’t hit you if you’re planning to purchase a plug-in van, taxi or motorbike.

Sadly the cuts mean there will be fewer greener vehicles on our road, which is terrible for everyone. It seems somewhat short-sighted by the Government, especially when they’re aiming towards their target of over half the new cars on our roads being ultra-low emission by 2030. This ‘Road to Zero’ doctrine was only launched in July this year.

It’s also started to worry the industry that this is a slippery slope to the ending of the grant altogether, which would be disastrous for both manufacturers and the countries CO2 reduction targets. As the Society of Motor Manufacturers commented, Denmark removed a similar scheme and EV sales dropped by a massive 73% the following year.

While it’s clear the Government don’t have endless amounts of our money to keep dishing out, some things are a worthy cause. The OLEV grant changes people’s minds and opens their purchasing decision to consider that plug-in hybrid, or to go fully electric. Without it, low emission vehicles will just become an overpriced white elephant that languishes at the back of the showroom gathering dust.

It’s possible a U-turn will happen in the future, or instead of eating humble pie the Government will come out with a new-fangled grant that differs ever so slightly to the original so that they don’t look as though they’re backtracking. Fingers crossed they have a big rethink on this one.