The government has axed the £1500 plug-in car grant (PiCG) with immediate effect – bringing to an end an electric car incentive scheme that dates back to 2011.
The government hails “success in the UK’s electric car revolution” as a reason for the decision, saying that it has helped to boost sales of pure-EVs from 1000 units in 2011 to nearly 100,000 in the first five months of 2022 alone. The PiCG has been applied to more than 500,000 EVs since its inception, amounting to a total contribution of more than £1.4 billion.
Repeated cuts to the amount of money awarded as part of the PiCG have prompted speculation about its demise for several years, and the government’s earlier commitment to funding until the 2022/2023 financial year suggested that was when would it end.
Confirmation of its cancellation comes just six months after the amount was cut from a maximum of £2500 to £1500, and the maximum cost of eligible vehicles was reduced from £35,000-£32,000 – leaving only the most affordable EVs on the market eligible for the PiCG. The government says the number of EVs available below this price point now stands at 24, up from 15 last year, as manufacturers usher in cheaper entry-level EVs.
The government said: “The government has always been clear the plug-in car grant was temporary and previously confirmed funding until 2022-23. Successive reductions in the size of the grant, and the number of models it covers, have had little effect on rapidly accelerating sales or on the continuously growing range of models being manufactured.
Due to this, the government is now refocusing funding towards the main barriers to the EV transition, including public charging and supporting the purchase of other road vehicles where the switch to electric requires further development.”
In place of the PiCG, the government has pledged £300 million towards providing incentives on plug-in taxis, motorcycles, vans, trucks and wheelchair-accessible vehicles.
It also says the “shift in focus” will allow for heightened investment in the UK’s EV charging infrastructure, but has not detailed any plans to add to the £1.6bn of funding in this area – which will see the amount of EV chargers increased tenfold nationwide – it announced earlier this year.
The government claims that reduced running costs of electric cars – compared to conventional combustion equivalents – “can often exceed” the £1500 incentive, and notes that EVs will continue to attract zero road tax (VED) and benefit from reduced company car tax rates.