The government has scrapped grants on plug-in hybrids such as the Mitsubishi Outlander and reduced grants on fully electric vehicles.
Previously hybrids were entitled to a £2500 grant, this has been completely removed and electric vehicles received a £4500 grant which has been lowered to £3500.
The government has said it will now focus its support on zero emission models such as the Nissan Leaf and hydrogen fuel cell cars.
Industry groups have condemned the decision. Sue Robinson, director of the National Franchised Dealers Association (NFDA) said: “It is extremely disappointing to see that the Government has decided to remove the grants for plug-in hybrids and cut those for electric cars, which, in the short term, can undermine the progress made so far in the development of the low emission vehicles sector.”
The grants have been offered to consumers since 2011 to help promote cleaner cars. “To meet the emissions targets and ensure a solid growth of the electric vehicle market, it is crucial that the Government works with the industry to ensure that consumers feel confident enough to switch to a low emission car.
“Retailers are working hard to clarify a number of issues affecting our sector, especially regarding emissions and fuel types. Consumers need to be supported and this announcement is likely to create further confusion.” Robinson added.
The British Vehicle Rental and Leasing Association (BVRLA) chief executive Gerry Keaney agrees with the NFDA. He said: “The Government’s decision to cut the plug-in grant just months after launching the Road to Zero strategy is unbelievably short-sighted and will only serve to stifle the uptake of electric vehicles.
“This year we have already seen a significant increase in the uptake in electric vehicles. There is clearly momentum for change amongst motorists, but this has always been dependent on them being able to afford to choose an electric vehicle. The plug-in grant has been essential in supporting this growth. The BVRLA also took a big step forwards on this front when it launched its ‘Plug-in-Pledge’ in July this year, which could supercharge the uptake of lower emission vehicles by increasing our member’s electric and hybrid plug-in fleets to 720,000 by 2025. The changes announced to the plug in grant can only serve to obstruct the achievement of this goal.
“The removal of the plug-in grant incentive makes our calls to expedite the shift to a 2% tax rate for ULEV company cars even more crucial, as without either measure there is very little motivating motorists to choose a low emission vehicle. Only last month the Prime Minister was setting out a variety of excellent plans to stimulate the production of electric vehicles and support the implementation of additional charging infrastructure. All this good work will be for nothing if the demand side of the equation is not equally incentivised.
“We are calling on the Government to rethink this decision as a matter of urgency. The plug-in grant, together with our calls for the leveraging of the company car tax within this month’s Budget, would actively encourage motorists to make less polluting vehicle choices. Not doing so puts the Road to Zero ambitions in real jeopardy.”
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