‘Short-sighted’ cuts to electrified vehicle grant more like pulling plug
PUBLISHED: 15:33 19 October 2018 | UPDATED: 15:33 19 October 2018
The automotive industry is shocked at disappointed the Government is cutting the plug-in car grant. Motoring editor Andy Russell says that with the demise of diesel it should be stepping up incentivising switching to electrifed vehicles.
The Government pulling the plug on much of the grant aid to encourage drivers to switch to electrified cars could put a brake on its green motoring targets.
With many motorists dithering about replacing their ‘demonised’ diesels, the Government should be encouraging them into low-emission, fuel-efficient alternatives by incentivising plug-in hybrid technology, not pulling support. Perhaps it feels diesel drivers will make the switch, regardless of cost, for fear of being hit with higher taxes in the future – or is that me being cynical?
Either way, it seems a knee-jerk reaction as the Department for Transport (DfT) gave just a month’s notice the plug-in car grant for pure electric vehicles will be cut by £1,000 to £3,500 from November 12, as a result of recent reductions in EV prices, while plug-in hybrids will lose the current £2,500 altogether.
The Society of Motor Manufacturers and Traders (SMMT) warned the move would have far-reaching consequences for consumers, the environment and industry, especially as the UK was one of the EU’s biggest markets for electrified vehicles.
It said it was totally at odds with the Government’s ambition to be the world leader in the uptake of ultra low-emission vehicles, announced in its Road to Zero Strategy, and would make meeting CO2 reduction targets impossible.
The grant has helped drive more motorists into plug-in hybrids, most of them able to run on battery power with zero emissions for around 30 miles, but, at less than 2pc, uptake is still very small.
The grant has helped incentivise 160,000 plug-in hybrid sales over the past seven years but it’s less than 0.5pc of the 34.7 million cars currently on the road. To achieve the Government’s ambition for at least half of new cars to be ultra low-emission vehicles – with CO2 emissions below 50g/km – by 2030, registrations would have to rise 30pc year-on-year for the next 12 years.
The EV fears are not without some foundation – prematurely removing upfront purchase grants can really hit demand as has been seen in other European market. Denmark saw pure EV sales plummet nearly 73pc in the year after that government announced its EV tax incentive would end – the market has still not recovered. Let’s hope our 22pc EV cut has less impact.
Mike Hawes, SMMT chief executive, said: “We understand the pressure on the public purse but, given the importance of environmental goals, it’s astounding that just three months after publishing its ambitious vision for a zero-emissions future, government has slashed the very incentive that offers our best chance of getting there.”
Gerry Keaney, chief executive of BVRLA – the trade body for the vehicle rental and leasing sector, said cutting the plug-in grant was “unbelievably short-sighted and will only serve to stifle the uptake of electric vehicles”.
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