What is the UK plug-in car grant?
UK Plug-in Car Grant offers a discount on the cost of buying an electric car - read our guide to the eligible cars and how much it can save you.
The UK Plug-in Car Grant (PiCG) used to offer discounts on a selection of PHEVs (plug-in hybrid electric vehicles) and EVs (electric vehicles). However, reforms have brought an end to financial support for PHEVs, while the maximum grant for electric cars and vans has been cut to just £3,000.
The grant was scheduled to come to an end in March 2020, but after being put under significant pressure from the car industry, the Government announced that it would be extended until the 2022-23 financial year, albeit with some cutbacks.
The plug-in grant provides a cash incentive that cuts the list price of the electric cars on sale in the UK today in an effort to encourage people to buy one. The main aim being to reduce emissions and improve air quality.
The plug-in grant scheme has been in place since 2011, although with the arrival of more AFVs (alternatively-fuelled vehicles) to market, the Government adjusted the PiCG in 2016, 2018 and 2020 to reflect this, refocusing the funding on the most environmentally-friendly models.
If you bought an eligible car before 2016, the Government paid £5,000 towards its list price. In 2016, that amount was reduced, while PHEVs received a reduced grant. This meant full EVs received a maximum discount of £4,500, while plug-in hybrids had £2,500 knocked off their list price.
The 2018 changes further reduced the full grant for EVs to £3,500, while removing PHEVs from the scheme completely. Now, only new EVs costing less than £50,000 are eligible for the grant, which has been reduced once again to £3,000.
What cars qualify for the PiCG?
If you're looking to buy an electric car or plug-in hybrid, then you'll want to know if the car you're buying is eligible for the PiCG, and our handy guide below will tell you exactly what kind of reduction you can expect. First, you need to know if your car falls into one of the three categories of low emissions vehicle that the Government uses to determine if a vehicle qualifies for the PiCG as follows:
- Category 1: Vehicles with a range of 70 miles making zero emissions, and a manufacturer quoted CO2 emissions figure of less than 50g/km.
- Category 2: Vehicles with a range of at least 10 miles making zero emissions, and a manufacturer quoted CO2 emissions figure of less than 50g/km.
- Category 3: Vehicles with a range of at least 20 miles making zero emissions, and a manufacturer quoted CO2 emissions figure of between 50-75g/km.
If your car qualifies for Category 1 and costs less than £50,000 new, then you can benefit from the PiCG maximum, which pays 35 per cent of the car's value, up to a maximum amount of £3,000.
Category 2 and 3 vehicles used to qualify for a 35 per cent reduction if they cost under £60,000, with the maximum amount saved at £2,500. However, the 2018 reforms mean Category 2 and 3 cars no longer qualify for the PiCG.
It’s also worth noting that, while the only Category 1 vehicles at the moment are full EVs, a PHEV with CO2 emissions lower than 50g/km and capable of travelling for 70 miles on electric power could technically qualify for the PiCG. However, that technology is still some way off and, with new hybrids set to be banned from sale in the UK by 2032, it may not be developed at all.
The objective of these changes is to encourage buyers to go for the lowest emitting vehicles, full EVs in particular, rather than just encouraging buyers to switch to save on the initial purchase price and then not use the hybrid element of their cars to help lower emissions when driving. It costs a lot more money to develop a zero-emissions EV, so they tend to have a higher purchase price than a similarly sized petrol, diesel or even hybrid vehicle in the same class. That's why the lowest emitting cars still get the maximum PiCG afforded to them.
How do I apply for a Plug-in Car Grant?
There's no need for buyers to do anything to ensure that the Plug-in Car Grant is applied to the car that they buy, because the dealer they're buying from will handle all the paperwork.
The grant is deducted from the car's list price, and the dealer does the rest. There might be some paperwork in terms of a feedback questionnaire, but that will be all that's needed to get behind the wheel.
How long can I get the Plug-in Car Grant for?
Following calls from across the car industry, the PiCG has been renewed and is now scheduled to come to an end in the 2022-23 financial year.