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.
In the UK, new electric cars are eligible for a plug-in car grant (PiCG). The government puts a sum of money towards the purchase of zero-emissions vehicles, creating a cash incentive for buyers to switch to electric cars and vans.
This, along with higher taxes for some new diesel cars, is aimed at helping the country achieve its targets for cutting CO2 emissions. It also makes it easier for people to buy low-emissions cars. So far, the PiCG has helped more than 200,000 purchases.
How does the grant work?
The government sorts all cars on sale into seven categories, depending on how much carbon dioxide (CO2) they produce and how far they can travel without any emissions. Until October 2018, incentives applied to Category 1, 2 and 3 cars, which were deemed to be the least polluting.
However, changes to the PiCG mean that Category 2 and 3 vehicles (all plug-in hybrids) are no longer eligible for the support, while the discount for Category 1 cars has shrunk from £4,500 to £3,000.
The grant is administered by the Office for Low Emission Vehicles (OLEV). It decides which cars are eligible based not only on emissions, but also on factors such as safety features, warranty and top speed.
Today, the grant covers up to 35 per cent of the car’s purchase price, up to a maximum of £3,000, if the car has a list price below £50,000 (any optional equipment selected by the customer is not included in the calculated list price). An eligible car must also have CO2 emissions of less than 50g/km, and be able to travel at least 70 miles without emitting any CO2. Finally, it must be on the OLEV’s approved list.
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, excluding any optional extras, 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 with the best plug-in hybrids only capable of 30-40 miles on electric power.
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.
Are there any other electric car grants?
Yes – the government will also give you up to £350 towards the cost of installing a home-charging wallbox. Among the conditions are that it must be an officially approved ‘smart’ charger and you need to have your own off-street parking. You must also be the registered keeper of an eligible car (or have one on order).
Finally, with sub-75g/km CO2 emissions, any car that’s eligible for the plug-in grant is currently exempt from London’s Congestion Charge.
History of the plug-in car grant
The UK Plug-in Car Grant (PiCG) used to offer Government subsidies 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 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 (although any optional equipment selected does not form part of the calculated list price), which has been reduced once again to £3,000.
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