£5k Plug-In Car Grant to be replaced by 2016
The Plug-In Car Grant will be replaced at the end of the year, the Office for Low Emission Vehicles (OLEV) has confirmed.
The grant provides up to £5,000 or 35% towards the cost of a plug-in vehicle with CO2 emissions below 75g/km and has proved instrumental in driving the UK’s electric and hybrid vehicle market since its introduction in 2011.
It is not clear when exactly the grant will be scrapped, however OLEV says it will honour any qualifying car delivered and registered within nine months of the expiry date.
Leasing confusion
The news comes after the British Vehicle Rental and Leasing Association (BVRLA) called for OLEV to set the record straight and combat growing uncertainty within the leasing sector, which had led a number of companies to remove the £5,000 grant from their quotation systems.
BVRLA Chief Executive Gerry Keaney said: “Losing the £5000 subsidy would have a major impact on a monthly lease rental, so leasing companies need to know that their quoted price won’t be hit because the vehicle lead time extends beyond the plug-in grant’s cut-off date.”
Registrations of plug-in vehicles have boomed in 2015, up four-fold on the first five months of 2014, from 2,838 to 11,842, thanks to the grant and a wider choice of vehicles. The number of plug-in cars available has more than tripled since 2011 to around 20 models.
Mr Keaney added: “Registrations of ultra-low emission vehicles have taken-off in recent months and the rental and leasing industry has been leading this charge. The uncertainty surrounding the grant was threatening to hike lease prices for ULEVs and reduce their appeal to prospective customers.”
How will the Plug-In Car Grant be replaced?
A three-band system will eventually be introduced, dividing plug-in cars based on how much carbon dioxide they produce.
Category 1 vehicles must emit less than 50g/km of CO2 and have a zero emission range of at least 70 miles
Category 2 vehicles will emit less than 50g/km CO2 and be able to travel between 10 and 69 miles on electricity alone.
Category 3 vehicles emit between 50-75g/km CO2 and have a 20-mile zero emission range.
As it stands, vehicles in each category are eligible for the full 35% discount, but you can count on that changing before the new system takes effect with more polluting models receiving a smaller discount accordingly.
Plug-in vans remain unaffected by the announcement however it is expected to remain unchanged following a forthcoming review.
