The Government announces changes to electric car and van grants

19th Mar 2021

The grant schemes for electric cars and vans have been cut, reducing funding for drivers making the shift into electric vehicles.

This week the Government has announced that the grant schemes for electric cars and vans are to be cut. From Thursday the 18th March 2021 the Department For Transport has reduced the grant for electric cars from £3,000 to £2,500. Since 2018 the grant had already dropped from £5k to £3k in a series of changes that also went onto excluded plug-in hybrids from being eligible. While the ceiling limit had already been cut to £50k for cars in last year’s Budget, the car grant will also now only apply to EVs priced under £35k meaning this latest move will eliminate a large number of electric vehicles. 

The government will also alter how it calculates the plug-in van grant, and change the eligibility for the grant to vehicles that are able to travel for 60 miles without any emissions. 

The headlines

-  The grant on electric cars drops to £2,500 from £3,000 and will now only apply to cars under £35k.

-  For vans, the amount available has dropped and two new classifications have been introduced; small vans of under 2,500kg GVW and large vans of between £2,500 to £3,500, both covering CO2 emissions of less than 50g/km and the ability to travel 60 miles emission-free.

-  For small vans, the grant will pay for 35% of the purchase price, up to a maximum of £3k.

-  For large vans, the grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £6k.

-  For trucks, the funding has dropped from £20k to £16k, which is available for the first 250 orders placed. After this point, a maximum grant rate of £6,000 will apply.

The plug-in car grant was introduced 10 years ago, and was designed to reduce the price of electric cars. This was to encourage more people to consider purchasing them, as at that point electric cars generally cost more to make than their petrol or diesel equivalents, resulting in higher purchase prices.

Within this latest announcement the Department For Transport added that the number of electric car models priced under £35k has increased by almost 50% since 2019 and more than half the models currently on the market will still be eligible for the grant. It has also said that cutting the grant would mean funding would last longer and be used by more people. They also wanted to target help at those people less able to afford electric cars, rather than wealthier buyers of premium vehicles.  

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