Slow sales could see £170m of electric car grants go unclaimed

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17 Feb, 2014 2:15pm Alex Yau

Government green car grants worth £170m could be unclaimed by 2015 as electric car sales fail to take off

Millions of pounds worth of government grants designed to encourage the purchase of 'ultra low-emissions’ vehicles may remain unclaimed by 2015.

The scheme set up in 2011 by then transport secretary Philip Hammond, has failed to meet initial predictions so far. £400 million was set aside to fund grants of up to £5,000 for anyone purchasing an eligible hybrid or electric car. However, slow uptake of these vehicles has forced the government to accept that only £230 million may actually be handed out by the 2015 deadline, leaving £170 million unclaimed.  

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Roads minister Robert Goodwill said: “Sales of ultra low emission vehicles have been increasing year on year, but at a slower rate than originally anticipated. We are currently projecting to spend £230 million over the period. 

"Grant uptake in 2013 was 335 per cent higher than in 2011, grants in January 2014 were at a record level and 679 per cent higher than the equivalent month in 2013.”

Recent figures from the Department of Transport show that only 6,709 claims, costing £33.5 million, were made by December 2013. Demand also fell short of the 8,600 claims expected by the Government in the scheme’s first year. 

A similar grant encouraging the purchase of low-emission vans has also failed to take off. Owners of eligible vans can get up to £8,000 in grants, but only 404 claims have been made since January 2012. 

Professor Stephen Glaister, director of the RAC Foundation, said: “Battery powered cars might well be the future, but these figures demonstrate a continuing consumer suspicion of their abilities and economics. 

"A big vote of confidence would be more interest from fleet buyers and businesses. The good news for drivers thinking of going green is that there is plenty of grant money left in the pot for them and the underlying price of these vehicles is gradually falling.”

Deputy Prime Minister Nick Clegg recently announced a £9 million investment in charging points to boost low-emission cars that would help meet future emissions targets. He also unveiled Go Ultra Low, a publicity campaign aimed at dispelling common myths about the cost and reliability of electric and hybrid vehicles