Electric car prices set to soar as government grants face cuts

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.”