Electric car grant cut was ‘inevitable’ with new calls for major interest-free loan scheme

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Earlier this week, the Department for Transport announced that the Plug-in Car Grant would be closed immediately. The grant allowed drivers to claim up to £1,500 off the price of an electric car with a retail price of under £32,000.

The Government department said it had “successfully kickstarting the UK’s electric car revolution” and supported the sale of almost 400,000 cars.

It was originally launched in 2011 when less than 1,000 people took advantage of the offer.

In comparison, the scheme increased the sales of fully electric cars to almost 100,000 in just the first five months of 2022.

Ben Nelmes, Co-Founder and Head of Policy and Research at New AutoMotive, said it was unfortunate that the grant had been cut, urging the Government to continue its net-zero work.

Speaking to Express.co.uk, he said: “The recent news that the Government is cancelling the £1500 plug-in car grant (PiCG) with immediate effect was inevitable, but it is essential that the Government continues to support motorists to make the switch to electric vehicles. 

“With the cost of petrol and diesel constantly rising, EVs can help lower the cost of living for British families, whilst also helping ensure the country stays on track to achieve its goal of net-zero by 2050.

“In place of the grant, the Government should implement an interest-free loan scheme aimed at helping car-dependent families who drive the most miles purchase second-hand EVs. 

“This scheme would not only help relieve cost-of-living pressures on these families who are struggling with fuel price rises, but also facilitate a quicker transition away from petrol and diesel cars.”

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Battery and hybrid electric vehicles now make up more than half of all new cars sold and fully electric car sales have risen by 70 percent in the last year, representing one in six new cars joining UK roads. 

The Government has always been clear the Plug-in Car Grant was temporary and previously confirmed funding until 2022 and 2023.

Despite this, many experts are still concerned that many lower-income families may not be able to access electric cars.

This comes less than eight years before the ban on the sale of new petrol and diesel cars.

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The Government has confirmed it will refocus funding toward the “main barriers” to the EV transition, namely public charging and supporting the purchase of other road vehicles.

This includes £300million to extend Plug-in Grants to boost sales of plug-in taxis, vans, trucks, motorcycles, and wheelchair accessible vehicles.

Mr Nelmes added: “Amid global supply chain disruption and a cost of living crisis driving people away from petrol and diesel, it’s encouraging that electric cars continue to grow in popularity.

“Electric cars are a great way to beat the rising cost of petrol and diesel; driving a mile in an electric car is around a fifth of the cost of driving a mile in a petrol or diesel car.

“While the steady growth of electric cars is welcome, the UK can and should be going faster. Ministers need to make the UK the best place for manufacturers to sell their electric vehicles, and a strong California-style ZEV mandate which will drive up car sales is the first step.”

Based on the most recent analysis from New AutoMotive, electric cars were the only fuel type that saw growth in both the absolute numbers and market share in May.

The new car market was down overall in May, from 147,115 new cars in May 2021 to 108,369 cars in May 2021. 

Global supply chain issues and the aftermath of the coronavirus pandemic continue to have an enormous impact on the automotive manufacturing industry.

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