THE Government has announced changes to the Plug-in Car Grant (PICG) today (15 December, 2021).
The changes take place with immediate effect and reduce the amount of grant available from £2,500 to £1,500 up to 35% of the recommended retail price inclusive of VAT and delivery fees.
The Government has also reduced the qualifying level from £35,000 to £32,000 recommended retail price. Currently there are 20 cars that meet this criteria, although the last time the PICG was reduced, many car makers lowered their price lists to ensure eligibility for the grant.
The Government says it has taken the action to help support as many people make the transition to electric cars as they become more affordable. Currently pure electric cars are running at 10 per cent of the total market.
Announcing the changes, the Government said:
“The government’s approach to supporting the uptake of electric cars is clearly working – while the grant has slowly reduced over time, the sales of electric vehicles has soared. Record sales in 2021 have already exceeded those from 2019 and 2020 combined.”
The Plug-in Car Grant changes in detail
Old grant value
- 35% of purchase price, up to £2,500
New grant value
- 35% of purchase price, up to £1,500
Old grant eligibility
- Cars must cost less than £35,000. This is the recommended retail price (RRP), and includes VAT and delivery fees.
New grant eligibility
- Cars must cost less than £32,000. This is the recommended retail price (RRP), and includes VAT and delivery fees.
Changes introduced to Plug-in Van Grant
Perhaps surprisingly the Government has also chosen to reduce the level of grant support for electric vans (eLCVs). In particular for larger fleets the number of grants will be limited to 1,000 to ensure a more equitable sharing of grant money through the commercial vehicle fleet.
Old grant value
- 35% of purchase price up to £3,000 for small vans < 2.5 tonnes gross vehicle weight (t GVW)
- 35% of purchase price up to £6,000 for large vans 2.5-3.5t GVW
New grant value
- 35% of purchase price up to £2,500 for small vans < 2.5 tonnes gross vehicle weight (t GVW)
- 35% of purchase price up to £5,000 for large vans 2.5-3.5t GVW
Commenting on the Plug-in Van Grant changes the Government said:
“This will enable a more sustainable grant scheme and will ensure that taxpayers’ money is distributed more fairly across businesses seeking to transition their vehicles to zero emission. Plug in Van Grant orders in 2021 are already over 250% higher than in 2020, demonstrating the strong shift to an electric future.”
What happens next?
The changes are immediate. So customer orders that have been placed already will be honoured at the old grant rates; but new orders, or proposals, will be at the new lower rate which may have an on impact the overall lease rental price.
Talk to us
If you are affected by these changes, or think you may be, please talk to us on 01283 351200.
