The scheme, which offered buyers a government contribution towards the cost of a new electric car, was axed in June but it has now been temporarily reinstated as a result of supply chain issues affecting the car industry.

The Plug-in Car Grant has offered drivers a discount on buying an electric vehicle since 2011.

However, the discount was gradually reduced – from £3,000 to £2,500 in March 2021 and then down to to £1,500 in December 2021. The maximum value of the cars that could be bought under the scheme was also reduced from £50,000 to £32,000.

The government announced in June that the scheme would be scrapped with immediate effect. It said it would spend money on public chargers instead.

Grant to be extended by 18 months

But the Office for Zero Emission Vehicles (OZEV) has now announced that it is extending the program by 18 months and backdating it to cover all eligible EVs ordered since the scheme was cancelled.

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The policy will now be automatically applied to car orders placed between 14 June 2021 and 31 March 2023.

A spokesman for the Department for Transport said: “We have temporarily extended the Plug-in Vehicle Grant delivery period in recognition of the continuing delays in manufacturing supply chains, due to ongoing semi-conductor shortages and the conflict in Ukraine.

“The temporary 18-month extension covers all Plug-in Vehicle Grants logged on the system between 14 June 2021 and 31 March 2023. We will continue to work with industry and monitor issues impacting the supply chain issues.”

‘Cut VAT on public charging’

Simon Williams, RAC electric vehicles spokesperson, said: “Growth in the new car market is a welcome sign after years of disruption because of Covid and semi-conductor shortages but we are still a long way off the market being buoyant. September is also a landmark month for plug-in vehicles, with confirmation that over one million electrified plug-in vehicles have been registered.

“In September alone, new pure electric vehicles were the second largest group of vehicles sold, after petrol. A temporary extension to the plug-in vehicle grant as announced by the government yesterday is also welcome news.

“Drivers clearly see the benefit of clean, economical electric cars which have lower running costs than conventional vehicles. However, clouds may be gathering on the horizon. Rising wholesale electricity costs have made charging more expensive – especially so at public rapid charge points. For those who do not have the ability to charge at home, it’s unfair to expect them to pay much higher charging costs than those who can charge at home. We call on the Treasury to cut VAT on public charging to 5% to ensure fairness for all drivers and to ensure demand remains strong.”