Threat to £5,000 electric car subsidy

Buyers’ bonus could be axed in budget cutbacks, dashes hopes of making UK electric car centre

Auto Express Car Reviews

By Richard Yarrow

28th May 2010

The £5,000 discount scheme to encourage drivers to buy electric vehicles could be scrapped by as part of Westminster cost-cutting.

The move would be a serious blow to auto industry bosses, who want to make the UK a centre of excellence for battery car development and use.

A spokeswoman for the Department for Transport (DfT) told Auto Express: “All spending commitments made since January are being reviewed by the new Government. Grants for electric cars were decided in that time, so it’s had to be resubmitted to the Treasury for approval.” She added that no timescale had been set for a decision.

The discount scheme was due for launch next year, and aimed to boost sales of the likes of the Mitsubishi i-MiEV and Nissan Leaf (right). Prices for the latter – out in February – had been calculated by bosses based on buyers paying £23,350 and the Government stumping up £5,000. If the rebate is axed, the retail price rises to £28,350 – a huge amount for a Ford Focus-sized family car.

A spokeswoman said Nissan was waiting for the Treasury’s decision. “An agreement to bring electric car production to the UK was signed in March,” she added. “The new Government has stated it will progress a greener economy. We believe the introduction of zero-emissions transport is at the heart of this.”

Paul Everitt, boss of the Society of Motor Manufacturers and Traders, told Auto Express: “We understand the need to validate spending decisions made in the recent past. But these expenditures, which support the UK motor industry, are consistent with Government priorities and represent value for money.”

The Coalition has reiterated its desire to build a national electric car charging network.

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5 Comments

Electric cars are a wrong turn - an expensive folly with very limited range that requires an expensive charging network that will put a strain on our failing national grid - the hydrogen fuel cell is the way forward rather than a 'plug-in.'

By biggsy24 on 3 June, 2010, 7:29am

Ash

With the amount of Debt the UK is in, NO New Government can afford this 5K Rebate....it is not justifiable and just insane..Plus you are subsidising ONE or TWO Brands ONLY, would be different if there were a larger selection and the cost benefit analysis was more favorable.The taxpayer CAN Not afford to prop up Nissan.

By rx88888888 on 3 June, 2010, 10:00am

Just make this a £5000 subsidy for MPs expenses.
It'll be an imediate winner!

By toycollector on 3 June, 2010, 7:22pm

Love the Leaf

I love the Leaf and I am going to pre-order one. Hydrogen is not the way forward at all, for cars this size and the size above and all below, battery is the future. For anything bigger or longer range then its range extender like the volt.

The two main techs are electric and volt type range extender...hydrogen possibly for commericals but realistically it will be range extenders for those also and eventually electric...

the oil firms are placing huge dollars into algae which can be processed in existing refineries and the algae can absorb CO2 and eat oil and plastic etc....they then make fuel for range extenders and even conventional cars.....

...the taxpayer is NOT proping up Nissan....the tax payer is assisting in making the UK a hot spot for electric cars that will provide lots of NEW jobs and lots of spin outs...think of all the extra things needed, from charging points to wires to home solar panels etc...so its not about Proping up anyone....its about making the UK a world leader and getting new jobs into the UK....and that is worth the every penny.

say 10K leafs cars are sold in the UK, that is an investment from the taxpayer of just £50m....yet with all the new businesses starting and all the charging points expanding etc....its a very small price to pay....1000's of jobs will be created...in other words, its a good investment from us the taxpayers...think how many people are employed at Nissan making the Leafs...the £50m is a very good investment and will pay back huge amounts.

By Widescreen on 10 June, 2010, 3:37pm

No incentive

£28,350 for a car like this is very expensive. You might as well go with a new Auris hybrid with a 5 year warranty, far better reliability and not using Renault parts!! Widescreen, look at the bigger picture here, a £50m tax payer handout is not important for a car so over priced when we are going to have people out of jobs in the public sector soon (which will then affect the private sector as people won't purchase in retail or services markets) so it is not a good investment for a car out priced in today's market. We can all say the oil companies are putting in vasts amount of $$$ into alternative fuel sources but without their main input (stripping us at the fuel pumps) they are not going to be pleased, just the same as they are anti hydrogen but being forced to put some of these pumps in Europe but those countries governments. You can love the Leaf as much as you want but you are going to be ripped off when you drive off from the show room.

By aarontp on 17 June, 2010, 7:34am

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Threat to £5,000 electric car subsidy