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For the second time this year, the UK is slashing the grants available to buyers of electric vehicles (EVs) as it looks to curb spending and targets less expensive models.
“Soaring demand for EVs leads to refocusing of grants on the most affordable zero-emission cars, making best use of taxpayer money,” the UK government said on Wednesday, announcing the changes to its EV incentive policies, the second major change in less than one year.
The grant for EVs is now slashed by 40 percent and limited to buyers of electric cars priced below $42,420 (£32,000). The grant is up to $1,988 (£1,500) for electric cars priced under £32,000, with currently around 20 models on the market, the UK government said today.
The previous grant for electric vehicles was up to $3,313 (£2,500) for cars priced under $46,390 (£35,000).
The up to £2,500 grant was introduced in March 2021, when the UK government cut the grant from $3,976 (£3,000), and incurred the criticism of Society of Motor Manufacturers and Traders (SMMT), which said that it was “the wrong move at the wrong time.”
In its announcement today, the UK government said that the grant scheme “has been updated to target less expensive models, allowing the scheme’s funding to go further and to help more people make the switch to an electric vehicle (EV).”
“The market is charging ahead in the switch to electric vehicles. This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further,” Transport Minister Trudy Harrison said.
SMMT criticized the move, with Mike Hawes, SMMT Chief Executive, saying, “Slashing the grants for electric vehicles once again is a blow to customers looking to make the switch and couldn’t come at a worse time, with inflation at a ten-year high and pandemic-related economic uncertainty looming large.”
Instead of cutting incentives, the government should double down on them, otherwise “UK drivers risk being left behind on the transition to zero-emission motoring,” Hawes said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.