Government spares plug-in car grant

By Tom Phillips

28th July 2010

The Transport Secretary, Philip Hammond, has today confirmed that the ‘Plug-In Car Grant’, designed to stimulate demand for low carbon vehicles, will go ahead from January 2011.  

The policy, which was originally proposed by Labour, will mean motorists will be entitled to a 25 per cent discount from the list price of an eligible electric, plug-in hybrid or hydrogen fuel cell car, up to the value of £5,000.

The grant will begin as the VAT rate increases to 20 per cent, adding £640 to the cost of a £30,000 car – which is what a Chevrolet Volt will cost when it goes on sale in the UK in 2012.

The scheme had been in doubt as the government makes aggressive spending cuts. But the £43 million allocated to the grant has been spared, as the coalition is desperate to establish the UK as a willing adopted of ultra-low carbon vehicles. The grant will be available between January 2011 and March 2012.

Speaking at the SMMT, Mr Hammond said, “The coalition government is absolutely committed to low carbon growth, tackling climate change and making our energy supply more secure.  

We are sending a clear signal that Britain is open for business and that we are committed to greening our economy.  This will ensure that the UK is a world leader in low emission vehicles.”

Since the announcement, Nissan and Renault have both welcomed the move. The firms are due to begin selling the Leaf EV and Fluence EV, respectively, in the UK next year.

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