Electric car prices set to soar as government grants face cuts

Report claims Treasury must secure emergency funds in order to save EV subsidies

Jaguar I-Pace
(Image credit: Jaguar )

Thousands of pounds will be added to the cost of electric cars if the Treasury fails to secure emergency funds, according to a report by the Observer.

The current grant of up to £4,500 that’s given to people buying plug-in hybrid or fully-electric cars could be reduced or axed altogether as a result of budget cuts to one of the Government’s key green initiatives.

Under the new proposals, the maximum grant available to buyers of electric cars would be lowered to £3,500, while the £2,500 allowance for buyers of combustion-engined cars able to travel on up to ten miles of battery power will be scrapped, the newspaper says.

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A cap is also being considered where any electrified vehicle costing over £60,000 would not be eligible for a grant.

The British carmaker Jaguar would be among the worst hit if the plans were to go ahead. Its first and only electric car, the I-Pace, costs around £63,000 and would no longer be eligible for the Government’s proposed grants, says Auto Express.

The cuts are raising concerns about Britain’s green credentials. Removing the grant could have a significant impact on EV sales, which have grown by 23.2% over the first nine months of this year compared to the same period last year, the magazine reports.

The Government takes a different line. A Department of Transport spokesperson says that the tax system also “incentivises the purchase of the cleanest vehicles.”

The spokesperson says that the Government will continue the plug-in grant until “at least 2020 and keep the rates under constant review.”

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