Plug-In Car Grant for electric cars scrapped

Shaun Davison
Electric car

The government has announced that it is withdrawing the £1,500 Plug-In Car Grant (PICG), with immediate effect (as of 14 June 2022), for new order of electric cars.

Electric car

The scheme, which has been in existence since 2011, initially provided a cash incentive of £5,000 – by reducing the list price of qualifying electric vehicles. Over the past six years, the level of the grant has gradually been reduced and until recently drivers could claim up to £1,500 towards electric cars costing less than £32,000.

To continue the government’s drive towards net zero they have refocused £300 million of earmarked grant funding towards extending plug-in grants to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles. The shift in focus will also help allow government funding to target expanding the public charge point network.

The PICG scheme has undoubtedly been an important factor to kickstart the UK’s electric car revolution and to create a mature market for ultra-low emission vehicles, however, for many drivers the plug-in car grant is no longer a major incentive for switching to an electric vehicle.

The cost of buying an electric car is considerably cheaper than it was a decade ago, with the price of electric cars falling to just above par of their petrol/diesel counterparts. Despite increasing energy costs over the past year, it is still cheaper to recharge an electric car opposed to filling up with a tank of fuel, there are expected savings for ongoing maintenance to factor in and not forgetting no road tax to pay.

On top of this, businesses can still benefit from generous tax reliefs on the purchase of fully electric cars and favourable company car tax rates for Directors and employees, which are currently expected to be frozen at their 2022/23 levels until 2025.

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