Should you buy a ‘green’ car ahead of incentive cuts?
In a highly controversial move, the Department for Transport and Office for Low Emission Vehicles announced major changes to the Plug-In Car Grant (PICG).
Essentially it means grants of up to £2,500 for plug-in hybrid cars will be completely axed (category 2 and 3 cars), while the discount available when buying electric cars (category 1) will be slashed from £4,500 to £3,500.
These are the categories based on CO₂ emissions:
- Category 1 – CO₂ emissions of less than 50g/km and a zero emission range of at least 70 miles
- Category 2 – CO₂ emissions of less than 50g/km and a zero emission range between 10 and 69 miles
- Category 3 – CO₂ emissions of 50 to 75g/km and a zero emission range of at least 20 miles
The changes are expected to come into effect by 9 November, though it could be earlier if there’s a sudden rush of orders. A cap has been set of 3,000 sales for category 1 and 6,000 for category 2 and 3 vehicles. However, as of 19 October, just 315 remaining orders can be made for category 1 cars, while 777 orders can be made for category 2 and 3.
The government said that over the last seven years, the PICG has provided a discount to the price of over 160,000 new ultra-low emission vehicles.
But the changes “reflect the ongoing success of the PICG in increasing uptake of electric vehicles” and the government “will now focus its support on zero emission models like pure electric and hydrogen fuel cell cars.”
However, plug-in vans, taxis and motorcycles will not be impacted by the change – it only effects plug-in cars.
‘Major blow to anyone hoping to go green’
RAC head of roads policy, Nicholas Lyes, said the reduction of the plug-in car grant makes little sense when efforts should be focused on lowering emissions from vehicles.
“With up-front costs still a huge barrier for those hoping to switch to an electric vehicle, this move from the government is a big step backwards and is in stark contrast to countries like Norway where generous tax incentives have meant it has one of the highest ownership levels of ultra-low emission vehicles of anywhere in the world.”
Jack Cousens, head of roads policy for the AA, said: “The government wants to end the sale of petrol and diesel cars, but scrapping grants for low emission cars may well stall their progress.
“Seven out of 10 drivers say grants are necessary to buy an ultra-low emission vehicle until such time that the price compared to a conventional petrol or diesel car is the same. And eight out of 10 say the high purchase price of electric and hybrid cars is the main stumbling block to owning such a car. This announcement will simply put more drivers off from buying greener cars.”