News story

New plug-in grant will treble number of greener cars on Britain’s roads

More than 100,000 motorists to benefit from £400 million fund focused on greenest vehicles.

OLEV cars.

The government has today (17 December 2015) announced a long-term extension to the plug-in car grant, backed by a £400 million package to treble the number of ultra low emission vehicles on Britain’s roads.

The grant will continue well beyond the latest guarantee of February 2016 until at least the end of March 2018 and will mean more than 100,000 people will benefit over the coming years — double the number who have already claimed the grant since 2011.

It means from next March, buyers of the greenest cars can save up to £4,500 off the overall purchase price.

Transport Minister Andrew Jones said:

“The UK is a world leader in the uptake of low emission vehicles and the plug-in car grant has been key to that success. Extending the grant in a sustainable way ensures more than 100,000 people will benefit from financial support when purchasing these cheap-to-run and green cars. We are determined to keep Britain at the forefront of the technology, increasing our support for plug-in vehicles to £600 million over the next 5 years to cut emissions, create jobs and support our cutting-edge industries.”

Jim Wright, Nissan GB Managing Director, said:

“Today’s decision by government has reaffirmed their commitment to the uptake of ultra-low emission vehicles. With government support and Nissan’s investment of over £420 million into electric vehicles in the UK, our British made Nissan LEAF has increased in popularity with many UK customers already enjoying the benefits of zero emission and low cost driving. This announcement, together with ongoing infrastructure developments, should see the growth and wider deployment of this technology continue.”

The grant was created in 2011 to encourage sales of ultra-low emission vehicles (ULEVs) and has been instrumental in the UK becoming the biggest ULEV market in the EU, and the fourth largest in the world. Some 50,000 people have already benefited from the grant.

From 1 March 2016, 2 grant rates will be available to ensure the funding is sustainable and focus financial support on the greenest vehicles. ‘Category 1’ vehicles with a zero emission range of over 70 miles will benefit from a grant of £4500. ‘Category 2 and 3’ vehicles with a shorter zero emission range — such as plug-in hybrid vehicles with a petrol or diesel engine — will receive £2500.

The new grant levels reflect strong growth in the sector with sales of ULEVs doubling over the past year. Motorists also have a wider choice of 29 ULEVs on the market — 5 times as many as when the plug-in car grant was launched. The UK is also at the forefront of the roll-out of hydrogen fuel cell vehicles, which are also eligible for the £4500 grant thanks to their zero tailpipe emissions.

The government has also today announced it will continue to provide a grant to help ULEV owners have a dedicated charge point installed at their home. From 1 March 2016, the electric vehicle homecharge scheme (EVHS) will offer £500 per installation, which on average will cover around half of the cost of getting a charge point.

The plug-in car grant is just one element of a comprehensive £600 million package of measures from the Office for Low Emission Vehicles over the course of this parliament which also includes funding for chargepoints, grants encouraging low emission buses and taxis and R&D funding for innovative technology such as lighter vehicles and longer-lasting car batteries.

To encourage zero emission vehicles and maximise the number of everyday motorists who can benefit from government support, a price cap will also be introduced from 1 March 2016. Category 2 and 3 models with a list price of over £60,000 will not be eligible for the grant, but all category 1 vehicles with a zero emission range of over 70 miles will be eligible for the full £4,500 grant.

The government has committed to make nearly all cars and vans in the UK zero emission by 2050, and announced in the Spending Review to increase funding to £600 million between 2015 and 2020 to support the development, manufacture and uptake of ULEVs.

This commitment was reinforced when the UK was one of 14 international members of the Zero Emission Vehicle Alliance to sign a pledge promoting the uptake of electric cars at the recent Paris climate conference.

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Published 17 December 2015