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Changes to the plug-in car grant

The Plug-in Car Grant was established in 2011 to support the early market for ultra low emission vehicles, offsetting the higher upfront purchase costs of these vehicles. Over the last seven years, the grant has disbursed over £0.5 billion, supporting the purchase of over 160,000 ultra low emission cars. The market share of these vehicles is now 2-2.5% of new car sales and growing.

The changes announced yesterday will now focus the Governments support on zero emission models like pure electric and hydrogen fuel cell cars. Consequently, we are retaining a substantial level of grant for the cleanest vehicles: up to £3,500 – reduced from £4,500. This reflects recent and anticipated future reductions in the price of these vehicles. We are re-confirming today our previous commitment that the plug-in car grant will extend until at least 2020, encouraging the next 35,000 ultra low emission vehicles onto UK roads.

Two out of three new cars bought using the grant are plug-in hybrids. With this segment becoming more established, the grant will no longer support the purchase of these vehicles. Plug-in hybrids are some of the cleanest cars on the road – they can deliver significant air quality and CO2 savings compared with petrol and diesel cars. They will therefore continue to attract favorable treatment in the taxation regime, grants for charging infrastructure, and local incentives (such as free parking in certain areas).

These moves reflect the on-going success of the grant in driving behavior and helping zero emission vehicle technologies to achieve economies of scale that drive down the prices for motorists. As set out in our Road to Zero strategy in July, increased uptake of the grant brings higher costs to the taxpayer. Yesterday’s announcement underlines the commitment made in the strategy to deliver a managed exit from grant funding over time. The changes will be implemented in a month’s time, subject to uptake levels. The Road to Zero Strategy makes clear that beyond 2020, incentives for consumers to purchase these clean vehicles will continue to be important.

The plug in car grant is one of a wide range of measures to drive the transition to a zero emission transport future. We are taking forward other demand incentives, supply-side measures such as research and development funding and support for infrastructure. Government remains strongly committed to leading the world in the design and manufacture of zero emission vehicles, delivering the ambitions set out in the Road to Zero Strategy in July – that between 50-70% of cars sold in 2030 will be ultra low emission vehicles and that by 2040 all new cars and vans will be effectively zero emissions – and we will continue to drive towards these goals.

Transition to new grant rates

The precise date that rates will change will depend on how many new vehicles are sold during the transition period (11 October to 21st October). However, they will come into effect at 00:01 on Sunday 21 October the latest.

Which cars qualify for the electric car grant?

Given that its official name is the plug-in car grant, it’s unsurprising that the only cars eligible are those that you plug in to recharge. That means that most brand new electric cars, which are powered only by their electric motors, will qualify for an incentive which reduces their purchase price. These inlcude the Nissan Leaf, Renault Zoe. Plug-in hybrid cars (known as PHEVs) were eligible for a grant until October 2018. These have a petrol or diesel engine, but also a large battery pack that can power the car for 20 miles in some cases. These cars no longer qualify, but buyers of new and second-hand PHEVs are usually eligible for a discount on a home charging point.

How much is the electric car grant worth?

The most you can get is 35% of a car’s purchase price - up to a maximum of £3,500, but this only applies to cars that meet certain criteria, including the requirement for a a range of at least 70 miles on a single charge. A grant of £1,500 is offered towards the cost of electric motorbikes and mopeds. If you’re looking to buy an electric van, you could be eligible for £8,000 towards the cost.

How is the electric car grant calculated?

Plug-in vehicles must meet certain criteria in order to qualify for a grant. Cars are put into three categories, depending on their range from a single charge and carbon dioxide emissions, which determines how much of an incentive they qualify for. The figures used come from the standard European test that every new car model must undertake. They aren’t representative of real-world conditions (cars generally have a shorter range and higher CO2 emissions in normal driving), but are currently the only common standard. In some cases, a car’s recommended retail price (RRP) affects its eligibility for a grant. The criteria for each category are summarised in the table below, with a more detailed explanation further down.

Category CO2 emissions Electric range from one charge Grant Grant cap
Cars: category 1 Under 50g/km At least 70 miles 35% of RRP £3,500
Motorbikes 0g/km At least 31 miles 20% of RRP £1,500
Mopeds 0g/km At least 19 miles 20% of RRP £1,500
Vans Under 75g/km At least 10 miles 20% of RRP £8,000

Plug-in grant Category 1

Maximum grant £3,500

Vehicles in category one qualify for the full grant. In theory, this is worth up to 35% towards the cost of the car, but there is a maximum cap of £3,500. This means that any electric car costing more than £10,000 - the vast majority - will get the flat £3,500 grant.

These are the qualifying requirements:

  • Electric range of at least 70 miles on a single charge
  • Average carbon dioxide emissions below 50g/km
  • No limit on the car’s price

The majority of vehicles in this category are pure electric cars, with no petrol or diesel engine, so they have no carbon dioxide exhaust emissions.

Plug-in grantCategory 2 & 3
Grant abolished

Category 2 and 3 cars are plug-in hybrid models, which were previously eligible for a discount.

This changed in October 2018, so buyers of new cars no longer get any government money towards the cost.

Most of these vehicles are eligible for up to £500 towards the cost of a home charging point

Plug-in grantVan category
Maximum grant £8,000

The largest plug-in grants are available for electric vans, worth 20% of their recommended retail price - up to a maximum of £8,000. Given their size and weight, the requirements are less arduous than for cars. To qualify, vans need to be able to travel for at least 10 miles on electric power without needing to recharge, and have CO2 emissions of less than 75g/km. The Nissan ENV200 is one of the vans that meet the criteria

Information for car buyers

I currently have a vehicle on order – will I still get a £4,500/£2,500 grant?

Yes. As long as the dealer has correctly submitted the claim for the vehicle to OLEV, then it will qualify for a grant at the rates that were in effect when the car was ordered. However, the car must be delivered within 9 months of when the claim was submitted.

If I order a vehicle before the grant rates change, but it is not delivered and registered until after the grant rates change, will I still get a £4,500/£2,500 grant?

Yes. As long as you order the vehicle before the grant rates change and the dealer has correctly submitted the claim for the vehicle to OLEV. Your dealer will be able to notify you of the grant you will be eligible for at the time of ordering the car.

How will I know when the grant rate has changed?

When the grant rates change we will update the OLEV website to reflect the fact that new grant rates are in effect. We will also email all dealers to let them know, so you can also check with your dealer.

If I place an order before the change in grant rate, is there a time limit for when the car must be delivered?

Yes. Your car must be delivered within 9 months of when your dealer submitted the grant claim to OLEV to be eligible for the plug-in car grant. If it is not delivered within 9 months, the grant claim will be cancelled. If you have any questions, please contact your dealer.

I ordered a vehicle more than 9 months ago and it still hasn’t been delivered / won’t be delivered until after the grant rate change. Will it still qualify for a £4,500/£2,500 grant?

If a vehicle is not delivered within 9 months of when your dealer submitted the grant claim to OLEV, the grant claim will be cancelled. Please speak to your dealer if you think this applies to your order.

It is not yet 21 October, but my dealer has informed me that the car I wish to purchase is no longer eligible for the full £4,500/£2,500 grant. Is this correct?

This could happen if sales are particularly high within the transition period and a sales cap is reached. To ensure we can continue to fulfil the grant, we have had to restrict the number of orders that can be made at the higher rates before 21 October. For some cars, the new grant rates could apply before 21 October. However, we will be providing daily updates on orders to all dealers on weekdays during the transition period. Your dealer will notify you of the grant you will be eligible for at the time of ordering the car.

Will the same cars still be eligible for the grant after the grant changes?

No. Once the grant changes for Category 2 and 3 vehicles there will no longer be any grant subsidy available for purchase of these vehicles. This will either be on 21 October, or before if sales are higher than expected. However, although they are no longer eligible for the grant, plug-in hybrid vehicles remain a good option for some buyers. They are still ultra low emission vehicles and qualify for other government incentives.

Will the same cars still be eligible for the Category 1 grant (currently £4,500) after 21st October?

The eligibility criteria for Category 1 vehicles will be unchanged, but the value of the grant will reduce to £3,500.

I’m looking at buying a particular vehicle but can’t see it listed as an eligible vehicle, why not?

Eligible vehicles must meet the criteria for the plug-in car grant, including for CO2 emissions and zero emission range. The most common reason for exclusion of a plug-in car from the list is that it does not meet the CO2 requirement of less than 75gCO2/km. Manufacturers must apply to be eligible for the scheme and provide evidence that their vehicle meets the strict criteria.

However, once the plug-in car grant changes for Category 2/3 vehicles, we will remove these vehicles from the eligibility page of the OLEV website. Please refer to the OLEV website for more details of the plug-in car grant criteria.

Can I still get an electric vehicle homecharge scheme (EVHS) grant for a car that is no longer eligible for the plug-in car grant?

Yes. All ultra low emission vehicles remain eligible for the electric vehicle homecharge scheme grant, even if they are no longer eligible to receive the plug-in car grant