The government has just cut the plug-in car grant

The UK’s plug-in car grant (PiCG) has just been cut. Until today you could get £3,000 off the price of an EV costing up to £50,000, but now you can only get £2,500 off the price of an EV costing no more than £35,000.

The government says the updated policy “target[s] less expensive models and reflect[s] a greater range of affordable vehicles available”, and that it allows “the scheme’s funding to go further and help more people make the switch to an electric vehicle”.

It claims the number of EVs available that cost less than £35,000 has increased by “almost 50 per cent” since 2019, and that EVs costing over £35k are “typically bought by drivers who can afford to switch without a subsidy from taxpayers”. The scheme has paid out a total of £1.3billion since it was introduced in 2011.

It remains to be seen whether manufacturers of EVs that were once eligible for the grant will simply increase prices by £2,500 or try and absorb some or all of the cost so customers don’t have to pay more. Notable cars affected by the new policy include the Tesla Model 3, Ford Mustang Mach-E, Mercedes EQA and Volkswagen ID.4.

Transport Minister Rachel Maclean said: "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." 

Ford’s UK boss Graham Hoare said today’s news was “disappointing” and “not conducive to supporting the zero emissions future we all desire”, while chief executive of the Society for Motor Manufacturers and Traders (SMMT) Mike Hawes said it’s the “wrong move at the wrong time”.

Hawes added: “Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply. This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the Government’s ambition to be a world leader in the transition to zero emission mobility.”

The UK government has pledged to ban the sale of new petrol and diesel cars in 2030, though hybrids will still be allowed if they can travel a “significant distance with zero emissions”.