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14 Jun 2022

Plug-in car grant scrapped: everything you need to know

The government says it is refocusing funds to make improvements to the public chargepoint network

The government has declared an end to the plug-in car grant (PiCG) that had helped to reduce the purchase price of some new electric cars.

Before being scrapped, the latest version of the grant reduced the cost of a new electric car by £1,500.

To qualify for the grant, the vehicle had to have a list price of £32,000 or less.

Keep scrolling as we take a closer look at the axed plug-in car grant, along with details on what you should do if you've recently purchased an electric car.

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What was the plug-in car grant?

Originally launched back in 2011, the first version of the plug-in car grant offered up to £5,000 off cars with CO2 emissions of less than 75g/km. The aim of the scheme was to increase the sale of low-emission and fully electric cars – only 1,000 were recorded that same year.

Over the years, the grant has been updated and reduced. Most recently, in December 2021 the amount that drivers could benefit from was reduced from £2,500 (for cars with a list price of £35,000 or less) to £1,500 (for cars with a list price of £32,000 or less).

However, the government has now scrapped the scheme entirely with immediate effect.

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Charging an electric car

Why has the plug-in car grant been scrapped?

A statement issued by the Department of Transport claims that the grant has been a major success, supporting the sale of 'nearly half a million' electric cars. It adds that reductions in the size of the grant have had 'little effect' on the 'rapidly accelerating' sales of EVs.

The government says it will refocus the funds in order to tackle 'the main barriers to the EV transition'. Part of that process will mean improving public chargepoints to tackle 'range anxiety'.

According to today's statement, the government has committed £1.6 billion to developing the UK's public chargepoint network.

Trudy Harrison, Transport Minister, said: 'We now want to use plug-in grants to match that success across other vehicle types, from taxis to delivery vans and everything in between, to help make the switch to zero-emission travel cheaper and easier.'

Looking for a cheap electric car? Discover what to look for when buying a used EV and the models to shortlist

What happens if I’ve just purchased an electric car?

Despite the cuts, you should still qualify for the plug-in car grant if you’ve recently purchased an electric car.

All existing applications for the grant will continue to be honoured, and in cases where an eligible car has been purchased in the last two working days but the grant has not yet been applied for, the sale will still qualify for the scheme.

EV charging point

Will electric car prices increase?

We're yet to see how manufacturers will react, but cars under £32,000 are set to become more expensive. The end of the grant may have an impact on EV sales, which is one of the few growth areas in the new-car market. 

Which? research shows one of the biggest barriers to electric car uptake is the upfront cost of electric cars relative to their petrol/diesel alternatives. Today's news will not only further that price gap on the more affordable electric vehicles, but potentially dampen public interest in transitioning to electric vehicles.

How has the car industry reacted?

Many industry experts have expressed concern about the demise of the grant.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said: 'The decision to scrap the plug-in car grant sends the wrong message to motorists and to an industry which remains committed to the government’s net-zero ambition.’

Nicholas Lyes, head of roads policy at RAC, added that 'the UK’s adoption of electric cars is so far impressive, but in order to make them accessible to everyone, we need prices to fall – having more EVs on the road is one important way of making this happen, so we're disappointed the government has chosen to end the grant at this point.’

Charging an electric vehicle

However, car manufacturer Kia has welcomed the move. Kia told AM Online: 'Whilst the plug-in car grant was an important chapter in transitioning to electric power, greater focus should now be placed on ensuring the UK public charging infrastructure is suitable to meet the 2030 and 2035 government powertrain regulations.'

Despite the end of the plug-in car grant, electric vehicles are still an attractive prospect for many.

Explore our expert guide on the best electric cars for 2022 to see which models are genuinely worth considering.

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