Electric cars get a £500 million government cash boost – but will it get spent?

The government has committed an additional £500 million to boost the sales of electric cars, including money for more rapid charging points.

The subsidy of up to £5000 paid to buyers of electric cars has been with us for three years, but it hasn’t had much impact on EV sales and it did look like the government had decided to scrap it all together.

But it looks like the coalition has allowed Nick Clegg to have his way with EV subsides in a move that will see £500 million injected in to promoting and supporting electric cars in the UK in the next few years.

Of the £500 million set aside, £200 million is going to extend the £5k subsidy for buyers of new electric cars until 2017, £32 million is being spent on more rapid charging points, and towns and cities will be be given funds to make life easier for EV drivers.

A further £100 million will be spent in the next five years on research and development of low emission technology.

But what impact will the half a billion pounds have? Judging by the take-up rate of the current EV subsidy scheme, not a huge amount.

The extra £200 million set aside for subsidies equates to the maximum subsidy on 40,000 EVs, and the funding is available until 2017.

That means there will need to be over 13,000 EVs sold each year to use up the money provided, but in the last year – two years and more since the £5k subsidy came in – just 2500 EVs were sold. Sales will have to increase 5-fold to use up the £200 million, and if sales stayat the same level just a fraction of the subsidy will be used.

As for providing ‘perks’ for EV drivers – like free recharging, free parking and being allowed to use bus lanes – all that’s likely to do is make the 99.9 per cent of drivers who don’t have an EV angry at subsidising the perks given to those who can afford to run an EV.

Still, if you do want an EV to play with it’s good news.