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UK Government lowers plug-in car grant again, limits who can claim it

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The UK Government has announced that it is once again lowering the grant provided to consumers buying plug-in electric vehicles. The grant will now only be worth up to £2,500, while cars over £35,000 will no longer be eligible. 

By specifically targeting the grant at cars priced under £35,000, the Government believes that it will now be helping the most price-conscious consumers, rather than those wealthier people who can afford more expensive cars. However, it means that some car manufacturers are now no longer eligible to receive any grant funding – namely Tesla. 

Tesla offers arguably the best electric vehicles on the planet, boasts a reliable network of rapid charging stations and has been the biggest advocate for EVs. The base Model 3 costs a smidge more than the £35,000 cap, while boasting best-in-class efficiency, meaning it costs less to charge in the long-run and is better for the planet. Despite this, the Government would rather consumers pick less efficient EVs. 

Even more concerning for UK consumers is the fact that the change in grant funding is effective immediately, meaning that those drivers currently going through the buying process will have to stump up more of their own cash. That could be potentially disastrous for those who have now found themselves completely ineligible for the funding. 

Rachel Maclean, the UK Transport Minister, commented, “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.”

What we think of the change

The change in the plug-in grant is a blow to the electric vehicle industry. While there are many people in the market looking to make the switch, it’s still true that EVs are more expensive, with grant funding helping to cushion the increased premium. At a time when the Covid-19 pandemic has impacted people’s finances, now is not the time to be withdrawing funding. 

It seems that what this Government says and does are two different things entirely. It says that it’s committed to a green revolution while downscaling funding for electric vehicles, which could impact future demand for the most efficient electric vehicles on the market. It’s not good enough that some people are now switching to electric vehicles, we need everyone to be switching, which is why we previously wrote about needing better incentives in the UK. If you pair this downscaling of funding for electric vehicles with the lacklustre budget, as well as the appalling performance of the Green Homes Grant scheme, then you would think that this Government hasn’t got a clue when it comes to its so-called green revolution.

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