UK Government reduces grants available on the purchase of new electric vehicles (EVs)

Electric car grant falls from £2,500 to £1,500 while the maximum price of an applicable vehicle falls from £35,000 to £32,000

By
Ian Osborne
December 15, 2021
Category:
EV Life

As sales of electric cars and vans increase in the UK, the government has changed the grant scheme for zero-emission vehicles. They have reduced the grants available for electric cars from £2,500 to £1,500 and reduced the maximum price of a vehicle to which the grant can be applied from £35,000 to £32,000.

Similarly, grants for electric vans have also been reduced. The larger van grant has dropped from £8,000 to £5,000, while smaller vans have seen a fall from £3,000 to £2,500. Plus, there’s a new limit being introduced of 1,000 grants per customer per year.

Trudy Harrison, transport minister, said: “The market is charging ahead in the switch to electric vehicles. This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further.

“We want as many people as possible to be able to make the switch to an electric vehicle, which is why we will also be introducing new rules to make it easier to find and pay at chargepoints. This will ensure drivers have confidence in our charging infrastructure, as we look to reduce our carbon emissions, create green jobs and level up right across the UK.”

The total funding committed by this government to support the transition to zero emission vehicles is £3.5 billion. This includes recent investments like an additional £350 million to support the electrification of UK vehicles and their supply chains, as part of our £1 billion commitment, and a further £620 million for targeted electric vehicle grants and infrastructure, with a focus on local on-street residential charge points.

Tax incentives for electric vehicles remain in place. These include company car tax rates, which can save drivers over £2,000 a year and it’s expected that the total cost of electric car ownership to reach parity during the 2020s compared to petrol and diesel cars.

This is the second time this year that the UK government has reduced grants for electric vehicles and would appear to go against encouraging people to make the transition to zero-emissions driving. It will interesting to see how the market responds to this.

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