The Office for Zero Emission Vehicles (OZEV) has stopped taking applications for the Plug-in Car Grant today (14 June 2022) [1]. Effective immediately, it amounts to a price increase of up to £1,500 for vehicles which had previously been eligible – and it’s not just new orders which could be affected.
What was the Plug-in Car Grant?
It was one of the UK’s earliest electric vehicle incentives. Launched in 2011, the grant was designed to stimulate demand for electric and (at the time) plug-in hybrid vehicles by covering some of the price difference compared to petrol or diesel cars.
Grant levels and eligibility have tightened the market has matured, focusing funding on the most affordable vehicles. Since December 2021 [2], this has provided up to £1,500 (or 35% of the purchase price) if vehicles meet the following criteria:
- 0g/km CO2 emissions
- an electric range of at least 70 miles
- a recommended retail price (RRP) of up to £32,000.
How has the Plug-in Car Grant changed?
From 14 June 2022, OZEV’s online portal no longer accepts new applications for the Plug-in Grant, withdrawing purchase incentives for most new electric cars.
OZEV says the change recognises that progressively lower grant levels haven’t slowed demand; one in six registrations so far this year have been battery powered, according to the Society of Motor Manufacturers and Traders (SMMT) [3].
Grant funding will be re-allocated to grow the public charging network and support demand for other vehicles – such as taxis and vans – to help more drivers switch to electric options.
Why might this affect vehicle orders?
Removing the grant amounts to a £1,500 price increase for vehicles which had previously been eligible, which affects leasing costs too – and not just for future orders.
Recent shortages of materials and components, notably semiconductor chips, are causing long lead times for new vehicles. Not all orders will have been placed with manufacturers yet, and it’s possible that these will no longer be eligible for the grant.
OZEV will still honour all applications made before 14 June 2022, and cars ordered between 10 and 13 June will still be eligible. Dealers must provide proof of the order date and apply for the grant by 14 July 2022.
How do I know if my order is affected?
LeasePlan is monitoring this situation as further details emerge, and we will contact customers individually if their order is affected. However, as most electric vehicle orders are over the grant’s £32,000 price cap, we only expect this to include a handful of customers.
Cars previously eligible for the Plug-in Car Grant
The Plug-in Car Grant is still available for wheelchair-accessible vehicles, offering up to £2,500 towards the pre-conversion cost for models with a RRP of up to £35,000, and grants for commercial vehicles are unchanged.
You can find out more details here on the Plug-in Van Grant
REFERENCES:
[1] OZEV. (2022). Plug-in grant for cars to end as focus moves to improving electric vehicle charging. [online] Available at: https://www.gov.uk/government/news/plug-in-grant-for-cars-to-end-as-focus-moves-to-improving-electric-vehicle-charging [Accessed 14 Jun. 2022].
[2] OZEV (2021). Government funding targeted at more affordable zero-emission vehicles as market charges ahead in shift towards an electric future. [online] Available at: https://www.gov.uk/government/news/government-funding-targeted-at-more-affordable-zero-emission-vehicles-as-market-charges-ahead-in-shift-towards-an-electric-future [Accessed 14 Jun. 2022].
[3] SMMT Media Centre. (2022). May 2022 New Car Registrations. [online] Available at: https://media.smmt.co.uk/may-2022-new-car-registrations/ [Accessed 14 Jun. 2022].
