Thumbs Down for Grant Cuts on Hybrid and Electric Vehicles: UK Car Groups

Motoring groups in the UK have made their discontent clear about the government's decision to cut subsidies for buying green cars.

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It was announced today that starting from November 9 this year, grants for all new UK plug-in hybrids would be stopped, while discounts on all-electric cars would be reduced from £4,500 to £3,500. Until now, cash incentives had been offered since 2011 to help promote cleaner cars and also to meet emissions targets.

The RAC and AA motoring groups stated that the change was a backward step. On the other hand, the Department for Transport said that the Plug-in Car Grant was only introduced seven years ago to help the market become established. The DfT felt that it was now time to emphasize on hydrogen fuel cell cars and other zero-emission models.

The declaration is close to the government’s Road to Zero plan, to completely get rid of petrol and diesel cars from UK roads by 2050, and pushing all motorists to own electric and other low emission models.

The ultra-low emission vehicles currently available for grants and discounts can be categorized into three groups:

Category 1: CO₂ emissions: less than 50g/km and zero emission range: at least 70 miles

Category 2: CO₂ emissions: less than 50g/km and zero emission range: between 10 and 69 miles

Category 3: CO₂ emissions: 50 to 75g/km and zero emission range: at least 20 miles.

The government said the reduction grant for Category 1 cars to £3,500 was owing to recent reductions in the cost of electric vehicles. But prominent motoring groups condemned the modifications, by saying that the move would harm the government’s emissions reduction targets and send out confusion among car buyers.

Manufacturers, will also be affected as they have invested large amounts in electric technologies. Removing purchase grants too soon is expected to have a negative impact on demand and owing to lower incentives encouraging consumers to meet emission targets.

As prohibitive up-front costs are major constraints for people hoping to switch to an electric vehicle, this move is thought to be a poor decision. While the government may want to eliminate the sale of gas and diesel cars, scrapping grants for low emission cars may run counterproductive to their needs. This announcement is expected to put a higher number of drivers from buying greener cars.