The government’s decision to lower the Plug-In Car Grant (PiCG) could not have come at a worse time for buyers and the UK car industry, an influential trade association has said.
As part of the changes, the grant has been slashed by £1,000 to £1,500, while the number of vehicles eligible for the scheme has also been reduced.
In order to qualify for the PiCG, new vehicles need to emit CO2 emissions of less than 50g/km, and be capable of travelling 70-or-more miles on zero-emission power.
The decision has been heavily criticised by the Society of Motor Manufacturers and Traders’ Chief Executive, Mike Hawes.
The PiCG has been targeted three times in the last two years; it was reduced from £3,500 to £3000 and then further reduced to £2,500 back in March of this year.
“Slashing the grants for electric vehicles once again is a blow to customers looking to make the switch and couldn’t come at a worse time, with inflation at a ten-year high and pandemic-related economic uncertainty looming large,” said Hawes.
“Industry and government ambition for decarbonised road transport is high, and manufacturers are delivering ever more products with ever better performance.
“But we need to move the market even faster – from one in a hundred cars on the road being electric, to potentially one in three in just eight years – which means we should be doubling down on incentives.
“Other global markets are already doing so whereas we are cutting, expecting the industry to subsidise the transition, and putting up prices for customers. UK drivers risk being left behind on the transition to zero-emission motoring,” he added.
The number of hybrid, plug-in hybrid and pure electric vehicles sold this year has steadily risen, the latest SMMT figures have shown. Last month alone, battery-powered vehicles’ share of the UK’s new car market equated to 18.8% – or 21,726 units.
When combined with hybrid electric vehicles’ 9% share, it means that more than a quarter (26.5%) of the UK’s new car market has been electrified during 2021.
In a statement to the House of Commons, under-secretary of state for transport, Trudy Harrison, defended the government’s move.
“With demand [for EVs] so strong, it is right that we seek to focus the grants, which are funded by the taxpayer, on the areas where they will have the most impact and where the market still needs government support,” she said.