The Office for Low Emission Vehicles has confirmed plans to extend time on the UK government's current scheme to subsidise purchases of hybrid and electric vehicles.
The scheme was set to end in February 2016, but new plans will extend the incentive for two more years until "at least the end of March 2018". More than 100,000 motorists could still benefit when purchasing a new hybrid or electric car, according to transport minister Andrew Jones.
However, the announcement also introduces a few changes to the way the grants will work. The maximum subsidiary is now £4,500, down £500, and three vehicle categories have been introduced with two different rates.
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Category 1 is reserved for cars with zero emissions range of over 70 miles, and will be eligible for the full £4,500 grant when the new rates are introduced early next year. Fully electric vehicles, like the Nissan Leaf and Tesla Model S will fall into this category.
Category 2 and 3 vehicles with shorter zero emissions range – such as petrol and diesel plug-in hybrids – will be available with a £2,500 grant.
There's a cap on the price of category 2 and 3 cars too. Vehicles with a list price over £60,000 will not be eligible for the grant, such as the BMW i8. All category 1 cars, regardless of price, will receive the maximum subsidiary.
Motorists can also receive a grant of £500 to help cover the costs of installing a dedicated charging point at home, but this is down from £700 currently.
Nissan, the manufacturers of best-selling all-electric Leaf, which has now sold 200,000 units, welcomed the decision.
Autocar reports that since the scheme was first introduced in 2011, around 50,000 motorists have taken advantage of the subsidiaries on offer, and the level of consumer choice in low emission vehicles has increased five-fold.
Fleetworld adds that the £8,000 grant for ultra-low emission vans will not change.
The announcement comes not long after the UK government signed an agreement with 13 other countries and US states to start an aggressive promotion of low emission vehicles with an aim to make every new car sold in Britain emit zero emissions by 2050.