Daily Mail Online recently published an article titled "Ministers to scrap taxpayer-funded £5,000 grants to electric car buyers after experts find incentive did little to help the environment".
From the article, we learn that the new policy will reduce subsidies in UK, before phasing them out entirely.
After about two years, the UK government spent £11 million (from £30 million available) on the subsidies, which equates to approximately 2,200 electric or plug-in hybrid car grants (£5,000).
The main thesis of the Daily Mail article is that the grants are only allowing rich families to buy a second car on the cheap and that the grant was introduced to fuel a consumer boom in emission-free cars but it "cannot be maintained indefinitely."
"It comes after experts found the incentive was doing little to help the environment and instead allowing rich families to buy a second car on the cheap."
Axing the subsidies for sure will impact short-term electric car sales:
"Research commissioned from the respected Transport Research Laboratory (TRL) suggests that axing the subsidy will come as a major blow to electric car manufacturers."
"The grant is said to play an ‘important role’ in electric vehicle purchase’ in nine out of ten sales."
But is this really true? According to "Driving the Future Today", a strategy for ultra-low emission vehicles in the UK from 04 September, at least until 2015, nothing will change in regards to the plug-in grant scheme and the UK still will invest in electrification:
Annex: Full list of commitments
"Support to 2020 – call for evidence We will make provision for over £500 million from 2015 until 2020 to support the growing market for ultra low emission vehicles. We will launch a call for evidence later in 2013 to inform the development of this package of support, including consumer incentives. This will consider the balance of support between the following workstreams and plot the path to Government’s exit from subsidy."
Is this EV or ICE grin from Transport Minister Norman Baker?
Workstream 1 – Supporting the early market
a) "To provide certainty for investors and consumers the existing plug-in vehicle grants will remain unchanged to May 2015 and consumer incentives will remain in place beyond this date."
Moreover, the new strategy seems to provide some initiatives for FCEVs.
Transport Minister Norman Baker MP, stated:
"These are exciting times for the motoring industry as ultra low emission vehicles are the future for road travel. Our vision is that by 2050 almost every car and van will be an ultra low emission vehicle with the UK at the forefront of their design, development and manufacture. This strategy moves us up a gear in pursuing that vision."