Plug-in car grant cuts: how electric vehicle buyers are affected

Drivers looking to buy hybrid or electric cars will no longer be eligible to receive subsidies as of next month, the Government has announced.

The £2,500 grant currently handed to buyers of plug-in hybrid cars will be axed from 9 November, while the grant available for fully electric cars will be cut from £4,500 to £3,500.

Under the present system, the Department for Transport (DfT) and the Office for Low Emission Vehicles (OLEV) splits cars with electrified powertrains into three categories:

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• Category 1: vehicles with an electric-only range of at least 70 miles and CO2 emissions of 50g/km or less
• Category 2: vehicles with an electric-only range of ten to 69 miles and CO2 emissions of 50/km or less
• Category 3: vehicles with an electric-only range of a minimum 20 miles and emissions ranging between 50 to 75g/km

The new system will see categories 2 and 3 scrapped, with the reduced discount applying only to category 1 cars, says Auto Express.

Given that there are currently no plug-in hybrid vehicles on sale that meet the category 1 criteria, only fully electric cars such as the new Jaguar I-Pace, the Tesla line-up and the upcoming Audi E-tron will be eligible for discounts.

The decision to cut the grants reflects “the recent reductions in the price of electric vehicles”, according to the Government.

A statement from the Department for Transport and the Office for Low-Emission Vehicles said that the subsidies had “helped the plug-in hybrid market become more established”, and noted that the discounts have been applied to more than 160,000 electrified car sales since the scheme launched in 2011.

What do the experts say?

The move has been criticised by the motoring industry, with experts warning that it could hit sales of cleaner cars.

Mikes Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said the cuts were “totally at odds with already challenging ambitions for CO2 reduction and sends yet more confusing signals to car buyers”.

Those concerns have been echoed by Nicholas Lyes, the RAC’s head of road policy. Lyes told the BBC that the cuts signalled “a major blow to anyone hoping to go green with their next vehicle choice”.

Jack Cousens, head of road policy at the AA, added: “The Government wants to end the sale of petrol and diesel cars but scrapping grants for low emission cars may well stall their progress.

“This announcement will simply put more drivers off from buying greener cars.”