Motoring industry hits out over plug-in car grant blow

Motoring groups have reacted furiously to the UK government’s decision to cut subsidies for electrified vehicles.

Since 2011, buyers of plug-in hybrid cars could claim a discount of £2,500 off the list price of their vehicle, but from November 9 this will end. Buyers of all-electric vehicles, meanwhile, will have their subsidy slashed from £4,500 to £3,500.

Since 2011, 160,000 new plug-in cars have been supported by the grant. However, the Department for Transport (DfT) said the market was now “established” and it considered the scheme a success, adding it was now time to focus support only on cars with true zero emissions – fully electric and hydrogen fuel cell cars, in other words.

But the Society of Motor Manufacturers and Traders says the cuts to the scheme will have far-reaching consequences for consumers, the motor industry and the environment.

It points to figures that show plug-in hybrid cars still only make up two per cent of the UK new car market, and says “completely removing the grant for plug-in hybrids is totally at odds with government ambition to be the world leader in the take-up of ultra-low emission vehicles”.

In a statement, the trade body said: “As we’ve seen in other European markets, prematurely removing upfront purchase grants can have a devastating impact on demand. In Denmark, for example, sales of pure electric cars plummeted by nearly 73 per cent in the year after that government announced its EV tax incentive would end – the market has still not recovered.”

Mitsubishi builds and sells the UK’s best-selling plug-in hybrid – the Outlander PHEV. It too condemned the decision, saying: “Now should be the ideal time for the government to incentivise plug-in hybrid technology, not pull its support, because such technology forms the perfect segue between conventional vehicles and full electric vehicles.”

The RAC’s head of roads policy, Nicholas Lyes, called the move “a major blow to anyone hoping to go green with their next vehicle choice”.

Questioning the sense of the decision, he said: “With up-front costs still a huge barrier for those hoping to switch to an electric vehicle, this move from the government is a big step backwards and is in stark contrast to countries such as Norway, where generous tax incentives have meant that it has one of the highest ownership levels of ultra-low emission vehicles of anywhere in the world.”