THE government has dropped the Plug-in Car Grant (PICG) from £2500 to £1500 as of 0700 today (15 December, 2021).
The grant will now cover 35% of the purchase price.
The change also lowers the qualifying cost of the grant from £35,000 to £32,000 of the recommended retail price inclusive of VAT and delivery fees.
Plug-in Van Grant changed, too
Not only has the car grant been lowered, but perhaps unexpectedly the government has also reduced the amount of money to be available for e-LCVs.
For light commercial vehicles under 2.5 tonnes the grant is reduced from 35% of purchase price with a ceiling of £3000 to 35% of purchase price limited to £2500.
Larger vans of 2.5-3.5t have seen the grant cut to 35% of purchase price with a maximum grant available of £5000 (that’s £1000 less than previously).
The plug-in van grants will be limited to 1000 applications per year for each business to ensure even distribution throughout the light commercial vehicle parc. This restriction will not apply to leasing companies.
Any orders placed by leasing brokers within the last seven days (before 0700 today) that have not yet been ordered via the OZEV Portal, then dealers have seven days to place those orders.
Commenting about the change, Lee Jones – the managing director of FleetProcure, the online vehicle purchasing system – said:
The change has been rumoured for the past few weeks and is therefore not entirely surprising. EV leasing has grown substantially this year with more vehicle choice and lower price entry points.
Lee Jones, managing director, FleetProcure
He continued:
“What remains to be seen in the current vehicle supply issues climate is whether the OEMs will again look to lower their vehicle pricing to counteract these changes, as happened the last time the OLEV grant was reduced.
“Here at FleetProcure, we do not believe these changes will largely affect EV leasing order volumes in 2022.”
The government says it is currently updating the plug-in grant eligibility website and is due to go live at noon today (15 December 2021).
More information on the reducing Plug-in Car Grant
Further changes are likely to happen with immediate effect as OZEV, which administers the grant, manages the amount of money available for electric vehicles. Read OZEV: making a managed exit from Plug-in Car Grant.
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
