New Electric Car Grant of up to £3,750 – but will it have ANY impact?

The government has announced a new electric car grant of up to £3,750 for EVs costing under £37,000. But will it have any impact?

It’s been three years since the Plug-in Car Grant (PiCG) for electric cars was scrapped, and there have been endless calls for it to be reintroduced to boost sales of EVs as we head for a ban on new ICE cars in 2030.

Now, the Labour government has bowed to that pressure and has announced a new electric Car grant delivering a subsidy of up to £3,750 for EVs listed at £37,000 or less, with a pot of £650 million to pay for it until 2029 (or it runs out of money).

To qualify for the grant, the EV in question will need to comply with sustainability criteria to get the full grant, otherwise it will be £1,500, with manufacturers needing to have a verified science-based target for carbon reduction and have emission scores below an (as yet undisclosed) threshold.

Unlike the previous PiCG, where buyers had to apply for the grant, it looks like the grant will go to the car makers to reduce the list price at the point of sale. But we really can’t see that working.

Car makers are already massively discounting EVs to get buyers to move into an EV, and it seems highly likely they will simply reduce the discounts they already offer on new EVs by the amount of grant they get.

Or are we being too cynical?