The UK Government’s announcement that it is cutting the plug-in car grant designed to entice consumers into making the switch to electric appears to have caught the industry off-guard.
Rather than easing the industry into a reduction, the Government confirmed that, effective immediately, it would only offer £2,500 towards the cost of a brand-new EV. That means overnight electric cars across the board are now at least £500 more expensive.
The situation is even worse for car manufacturers that offer electric vehicles over £35,000, with those vehicles no longer eligible for the grant at all. That means many customers will now have to stump up £3,000 more than they expected to pay when they pre-ordered a car.
One manufacturer that finds itself in this situation is Ford. The car company will soon begin delivering its first electric vehicle built from the ground-up, the Mustang Mach-E, to UK customers. That vehicle starts at just over £40,000, meaning it is no longer eligible for the plug-in car grant.
Graham Hoare, chairman, Ford of Britain, commented, “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.”
Ford isn’t alone in its shock to the Government’s changes. MG Motors, a company that offers electric vehicles that is still covered by the plug-in car grant, also appeared to be shocked by the move.
Guy Pigounakis, MG’s commercial director, said, “While we welcome any news that encourages people to buy affordable electric cars, for it to come in the middle of the toughest March trading conditions ever is a blow to customers.
“At MG, we believe in ensuring our customers are as happy as they can be with their new cars and in recognition that many of them will have made the decision to buy an MG EV with the £3,000 grant funding in mind, we have decided to honour that for all purchasers who order a new MG ZS Electric or MG5 EV for delivery before the end of this month.”
At Electrical Review, we made our position clear that now is not the time to be removing incentives for electric vehicles, and it’s good to see that the car industry is in agreement. RAC head of roads policy Nicholas Lyes also hit out at the Government in a statement to Sunday Times Driving.
“Ministers seem to talk-the-talk when it comes to encouraging people into cleaner vehicles, but cutting the plug-in car grant certainly isn’t walking the walk,” he said.
“While it’s understandable to focus grants on the affordable end of the market where there’s the best opportunity for greater take-up, the industry has been hit hard by the pandemic and incentives to get consumers to go green remain vital in encouraging the sale of clean new cars.
“The extent to which drivers might delay upgrading their vehicles as a result of the economic effects of the coronavirus is also yet to be seen, which makes the timing of this announcement all the more surprising.
“Even though more models are coming on to the market, our research suggests upfront cost remains a concern to drivers when comparing the cost of an electric vehicle with a similarly sized conventional vehicle.”