Latest changes to the Plug in Vehicle Grant

A summary of all the changes are below:

Plug-in Car Grant

Funding has been reduced from £2,500 per vehicle, to £1,500.
Grants are only available for vehicles with a recommended retail price (RRP) of less than £32,000, down from to £35,000 previously. An updated list of eligible vehicles is available here.
Eligible vehicles still have to offer a 70-mile electric range, but the CO2 cap has been reduced from 49g/km to 0g/km CO2. This excludes plug-in hybrids, though no current models were eligible anyway.
The changes do not affect wheelchair accessible vehicles, which are still eligible for the £2,500 grant, as long as the RRP is under £35,000.

Plug-in Van Grant

Funding for small vans (<2.5t GVW) has been reduced from £3,000 to £2,500.
Funding for large vans (2.5-3.5t GVW) has been reduced from £6,000 to £5,000.
Each ‘end customer’ (the fleet operator, not the leasing company) is limited to 1,000 van (and truck) grants per financial year (1 April to 31 March).
Eligibility is unchanged; vehicles must offer an electric range of 60 miles, and CO2 emissions of 49g/km or less. Funding for larger vans has also not changed.

New vehicle limits

Grant applications must also be allocated to an 'end customer' within a new digital portal. This will enable OZEV to ensure that fleet operators haven't exceeded the Plug-in Van Grant vehicle limits, and any missing or incorrect information will lead to applications being cancelled. Van orders placed on the portal before 7am on 15 December will not count towards this year's limits.

Timings

OZEV is offering a grace period of seven days prior to the change being introduced for older orders to be logged. This means any orders placed between 00:01 on 8 December 2021 and 23:59 on 14 December 2021 will be processed according to the previous rates and eligibility criteria. The portal has been suspended temporarily while the new rates are introduced.

Vehicles available

An up to date list of available vehicles eligible for plug-in grants are available on the Gov.uk website here.

Commenting on the announcement:

Office for Zero Emissions Vehicles (OZEV):

“Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers and, as signalled to industry following the March 2021 grant changes, has therefore been unable to provide notice ahead of the grant changes. When we have given the market prior notice of changes to the Plug-in Grants in the past, this has caused order spikes which are unaffordable within allocated budgets.”
“Government recognises that when immediate changes are made to Grants it will mean funders and leasing companies are often not able to honour quotes given to customers for orders if the full ordering process is not complete when the grant change happens.  Whilst OZEV appreciates the disappointment this could cause for affected drivers, in the context of our responsibility to protect public funds it is unfortunately unavoidable.”

British Vehicle Rental & Leasing Association (BVRLA):

“While we’ve seen high levels of uptake within the car market, the situation is not the same for electric vans. The disparity across the industry means that sweeping solutions are not suitable. Incentives have had a positive impact to date but there is more to be done. It is disappointing to see support declining when cost remains a crucial stumbling block.
There remain many barriers that are slowing down the mass transition to electric vans. Today’s news increases those challenges and will delay the uptake of electric vans. This is particularly the case for SMEs, where the lack of price parity between ICE vehicles and electric alternatives makes it hard to create a realistic business case to make the switch.
For the move towards electric vans to gain momentum, more support and incentives are essential, now is not the time to remove or reduce them. “We are calling on the Government to provide more support around commercial vehicles, including an extension of the Plug-in Van Grant beyond the current 2022/2023 end date.”

Further information

Read the full press release here from the Department for Transport and Office for Zero Emission Vehicles

Published at 20 December 2021

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20 December 2021