UK Lowers Plug-In Car Grant To £2,500

The government updated all the plug-in grants with immediate effect on March 18, 2021.

Hyundai Kona Electric in the UK

Mark Kane

By: Mark Kane

Mar 18, 2021 at 8:35am ET

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The British government announced today an update to the plug-in car, van and truck grant, which are targeted at more affordable models.

The plan was to lower the grants and the price cap to support only the less expensive models. A side effect of that will be that the scheme’s funding will last longer.

Over the past 10 years, since 2011, when the plug-in car grant was introduced, the government has provided close to £1.3 billion in plug-in vehicle grant funding. Purchase of more than 285,000 was supported (on average, over £4,500 per vehicle).

Plug-In Car Grant - up to £2,500

From March 18, 2021, the Plug-In Car Grant is 35% of the purchase price, up to £2,500 (€2,924 / $3,492) and the cost must be less than £35,000 (the recommended retail price (RRP), and includes VAT and delivery fees). Previously it was £500 more with a price cap of £50,000.

Because of the requirement of at least 112km (70 miles) of all-electric range and CO2 emissions of less than 50 g/km, only all-electric models qualify (there are basically no plug-in hybrids with such a high range, especially in the required price range).

According to the government, most of the BEV models will still qualify:

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"The number of electric car models priced under £35,000 has increased by almost 50% since 2019 and more than half the models currently on the market will still be eligible for the grant, including spacious family cars, such as the Hyundai Kona 39kWh and the MG ZS EV.

Government measures to encourage people to switch to electric vehicles are also working, with nearly 11% of new cars sold in 2020 having a plug. This was up from just over 3% in 2019 – and battery electric car sales almost tripled over that same period."

Because the tax subsidies are still strong, we would not expect any big impact on the plug-in market.

Other Plug-in grants:

Motorcycles - no CO2 emissions and can travel at least 50km (31 miles) between charges
"The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £1,500."
Mopeds - no CO2 emissions and can travel at least 30km (19 miles) between charges
"The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £1,500."
Small vans - less than 2,500 kilograms (kg) gross vehicle weight, have CO2 emissions of less than 50g/km and can travel at least 96km (60 miles)
"The grant will pay for 35% of the purchase price for small vans, up to a maximum of £3,000."
Large vans - between 2,500kg and 3,500kg gross vehicle weight, have CO2 emissions of less than 50g/km and can travel at least 96km (60 miles) without any emissions
"The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £8,000."
Taxis - purpose-built taxis and have CO2 emissions of less than 50g/km and can travel at least 112km (70 miles) without any emissions
"The grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £7,500."
Trucks - between 3,500kg and 12,000kg gross vehicle weight, have CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity. They can travel at least 96km (60 miles) without any emissions
"You can get a grant that covers 20% of the purchase price, up to a maximum of £16,000. This grant is available for the first 250 orders placed. Grants at the £16,000 rate are limited to 10 per customer. After the 250 order limit is reached, a maximum grant rate of £6,000 will apply."