Transport minister Trudy Harrison

Motoring organisations have reacted with dismay at today’s news that the government has cut grants and eligibility criteria for buying electric vehicles.

From today, the government will provide grants of up to £1,500 (reduced from £2,500) for electric cars priced under £32,000 (down from £35,000) focusing on the “more affordable vehicles and making best use of taxpayers’ money”.

Wheelchair accessible vehicles are being prioritised, with a higher grant of £2,500 for vehicles priced under £35,000. Small vans will also receive £2,500, and large vans £5,000, with a per financial year limit of 1,000 grants per business to ensure that funding is spread fairly. There will be no changes for small or large trucks, which receive £16,000 and £25,000 respectively.

The changes are aimed at allowing the scheme’s funding to go further, to help more people and businesses to switch to an electric vehicle.

Transport minister Trudy Harrison, 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.

“We want as many people as possible to be able to make the switch to an electric vehicle, which is why we will also be introducing new rules to make it easier to find and pay at chargepoints. This will ensure drivers have confidence in our charging infrastructure, as we look to reduce our carbon emissions, create green jobs and level up right across the UK.

“The government has invested over £1.5 billion since 2010, supporting nearly half a million vehicles. The approach has worked – it has helped to kickstart a market that is now moving forward at pace

She said that around 150,000 zero-emission cars have been sold so far this year - more than 1 in 10 of all new cars sold, while electric van uptake was also accelerating at pace, with grant orders up 250% this year compared with 2020.

However, Mike Hawes, SMMT chief executive, said slashing the grants for electric vehicles once again was a blow to customers looking to make the switch and couldn’t come at a worse time, with inflation at a 10-year high and pandemic-related economic uncertainty looming large.

“Industry and government ambition for decarbonised road transport is high, and manufacturers are delivering ever more products with ever better performance. But we need to move the market even faster – from one in a hundred cars on the road being electric, to potentially one in three in just eight years – which means we should be doubling down on incentives.

“Other global markets are already doing so whereas we are cutting, expecting the industry to subsidise the transition, and putting up prices for customers. UK drivers risk being left behind on the transition to zero-emission motoring.”

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA) which represents franchised car and commercial vehicle dealers in the UK, said it was extremely disappointing that the Government has chosen to reduce the availability of the plug-in grant as the move could derail the progress the sector has made in decarbonising transport, sends the wrong message to the consumers and will adversely impacting less affluent motorists that are seeking a transition to a

“Cutting the grant strongly disincentivises EV adoption across the UK. This, in turn, will exacerbate the unequal, regional EV uptake gap. While the market share of EVs is growing at an impressive rate, it is premature to reduce the levels of this support to the consumer and send the wrong message to the public, especially as other G7 nations continue to ramp up consumer support.”

Jon Lawes, managing director, Hitachi Capital Vehicle Solutions, agreed that the cuts to grants was counter-intuitive to achieving the ambitious targets set by the Government to reduce carbon emissions, and has the potential to dampen the strong demand for zero- emission vehicles seen in recent months.

“Despite the growth of EV registrations, this market remains in its infancy,” he said. “The government rationale to reducing eligibility at this juncture for the second time this year is confusing, as we know financial incentives to encourage EV adoption are an important factor within the vehicle renewal decision making process.”

Denise Beedell, Public Policy manager at Logistics UK, said: “We are disappointed to see reductions for plug-in van grants being brought in without notice and less than a year since the previous plug-in grant rate reduction. Reducing financial support at this time is unhelpful for a sector that is already working hard to decarbonise, while handling significant supply chain and cost pressures. Logistics businesses are determined to move to low and zero tailpipe emissions vans as swiftly and effectively as they can, but the decision to reduce the grants for electric vans under 3.5 tonnes will be detrimental to this transition; we are, however, pleased to see that the grants for larger vehicles (those over 3.5 tonnes) will remain the same.”