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Plug-in car grant scrapped on electric cars over £35,000

Lawrence Allan

Written By Lawrence Allan

Electric Volvo charging
  • Grant for electric vehicles (EVs) cut from £3000 to £2500
  • Electric vehicles over £35,000 will no longer be eligible for the grant 
  • In 10 years, the grant has been slashed by 50% (£5000 in 2011, when the scheme launched)

The Government's plug-in grant scheme for electric cars has been updated to target less expensive models.  The change aims to reflect a greater range of affordable vehicles available, allowing the scheme’s funding to go further and help more people make the switch to all-electric - according to the Department for Transport and Office for Zero Emission Vehicles.

From today (18 March 2021), the Government will provide grants of up to £2500 for electric vehicles on cars priced under £35,000. It was also revealed that cars costing more than £50,000 would no longer qualify for the Government-funded discount.

The changes will affect new electric cars like the Tesla Model 3, Ford Mustang Mach-E and the Polestar 2. Nearly 11% of new cars sold in 2020 had a plug, a figure that's expected to grow in 2021. 

On 12 March 2020, the grant was cut from £3500 to £3000. The plug-in car grant scheme was introduced in 2011 to support the uptake of ultra-low emission vehicles, with the rate originally set at £5000. However, this amount has gradually been cut as EVs have become more popular. 

The grant will no longer be available for higher-priced vehicles, typically bought by drivers who can afford to switch without a subsidy from taxpayers.

The number of electric car models priced under £35,000 has increased by almost 50 per cent since 2019 and more than half the models currently on the market will still be eligible for the grant, including the Hyundai Kona Electric and the MG ZS EV.

Transport Minister Rachel Maclean said: "The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference. We will continue to review the grant as the market grows."

The plug-in car grant was introduced 10 years ago to stimulate the early market for zero-emission vehicles. Since 2011, the Government has provided close to £1.3 billion in plug-in vehicle grant funding to bring ultra-low emission vehicles onto UK roads, supporting the purchase of more than 285,000 vehicles.