The government has announced that the £2,500 grant for buyers of plug-in hybrid cars will end on 12 November, and the EV grant will be cut to £3,500.
Update: The grants will now be cut and removed from 9 November.
Since 2011, with a few tweaks along the way, the government has subsidised sales of low emission vehicles by making a grant available to off-set the higher prices of electric and plug-in hybrid cars.
Currently, you can get a grant of up to £2,500 for Category 2 (CO2 under 50g/km and EV range of 10-69 miles) and Category 3 hybrids (CO2 50-75g/km and range of at least 20 miles), and a grant of £4,500 for a Category 1 vehicle with CO2 under 50g/km and a range of at least 70 miles (really, only EVs). But not any more.
From 12 November (and earlier if you all go out and buy a plug-in hybrid or EV), the grant for plug-ins in Category 2 and Category 3 will be scrapped altogether, and the Category 1 grant will be cut to £3,500.
It’s an unwelcome news for a car industry already struggling with a diesel backlash and Brexit uncertainty, but the rise of popularity of plug-in hybrids has meant a removal of the grant has been on the cards for a while.
When the grant for plug-ins was cut to £2,500 two years ago, Mitsubishi responded by cutting the price of the Outlander PHEV by the same amount, since when sales of the Mitsubishi – and other PHEVs – has continued to rise. So the government probably expects car makers to respond with price cuts and little measurable effect on sales.
Electric cars are a slightly different case, with sales nowhere near as strong as for PHEVs, so keeping the grant – albeit at £1,000 less – is sensible, although car makers are so far down the road with EVs – and costs are dropping – that pushing back on the car industry to makes sales with less help is probably sensible too.
Although the car industry will howl, it’s all common sense. And Toyota and Lexus ‘self-charging’ hybrids suddenly become even more appealing.