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Plug-in Car Grant Withdrawn

The Government has withdrawn the plug-in car grant (PiCG), which was worth up to £1,500 off an electric vehicle (EV), with immediate effect.

Transport minister Trudy Harrison said: “The Government continues to invest record amounts in the transition to EVs, with £2.5 billion injected since 2020, and has set the most ambitious phase-out dates for new diesel and petrol sales of any major country.

“But Government funding must always be invested where it has the highest impact if that success story is to continue.

“Having successfully kickstarted the electric car market, we now want to use plug-in grants to match that success across other vehicle types, from taxis to delivery vans and everything in between, to help make the switch to zero emission travel cheaper and easier.”

Just six months ago, the plug-in car grant was cut by £1,000, from £2,500 to £1,500, and the eligibility was changed, from cars with a recommended retail price (RRP) of £35,000 or less to cars with a price of £32,000 or less.

Gill Nowell, Head of Electric Vehicles, LV= General Insurance and ElectriX comments:

“The withdrawal of the plug-in car grant comes as no surprise, however we must ensure that other mechanisms are in place to encourage more people to make the switch to an electric car. It’s true that the new registration numbers are encouraging for EVs, but they still only constitute a small percentage of the total car parc in the UK. LV= research shows that 45% of people across the UK are put off buying an electric car due to the higher upfront sticker price. This is why total cost of ownership is so important. We know through the LV= Electric Car Cost Index that electric cars can be cheaper over a four year lease term or seven years of outright ownership, and all electric cars are almost 50% cheaper to run. However we do need to reach price parity with petrol and diesel cars. It is to be hoped that the Zero Emission Vehicle Mandate, that will require car makers to sell a certain percentage of electric cars from 2024, will drive us towards price parity.

“In parallel, we need to make sure that public charging infrastructure meets the needs of both current and future EV drivers. Government commitment on this front is to be welcomed, although Government could look at VAT rates on public charging to make it fairer for those people who cannot charge at home and are dependent on public charging to get from A to B. Underpinning all of this must be consistent and accessible information for people who are considering making their next car electric. The road ahead is electric, but we have a long way to go to ensure that electric cars are more affordable to more people.”