Plug-in Car Grant cut with immediate effect

THE government’s Plug-in Car Grant is changing effective today (18 March 2021).

The changes are:

• Amount of grant is reduced from 35% of purchase price up to £3000 to 35% of purchase price up to £2500. 
• Eligibility criteria of cars is changing from less than £50,000 to cars costing less than £35,000.

The government says the changes will mean the funding can last longer and will be available to more drivers. It also said it did not wish to subsidise higher priced vehicles which could be bought by drivers who could afford the switch without taxpayer subsidy.

There have also been changes to the Plug-in Van Grant for light commercial vehicles.

The changes are:

• From 20% of purchase prices upto £8000 to 35% of purchase price up to £3000 for vans below 2.5 tonnes GVW; 
• and 35% of purchase price up to £6000 for for vans 2.5t-3500t GVW
• Eligibility criteria has changed: vans must have CO2 emissions of less than 50g/km and must be able to travel at least 60 miles without any emissions.

The plug-in vehicle grant scheme was renewed last year, with £582 million of funding intended to last until 2022-23.

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.

Rachel Maclean, Transport Minister

The Plug-in Car Grant was introduced 10 years ago to stimulate the early market for zero emission vehicles. The government says it has provided nearly £1.3 billion in plug-in vehicle grant funding.

Maclean added that generous tax incentives, including favourable company car tax rates, which could save drivers over £2,000 a year, would remain in place.

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