Grants for electric and plug-in hybrid cars slashed early after spike in demand

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Government grants for new low-emission cars have been slashed earlier than planned due to a spike in demand.

The amount of money available for pure electrics has been reduced while hybrid models are no longer eligible for the scheme.

When the Department for Transport (DfT) announced the changes on October 11, it said they would not come into effect until November 9 unless subsequent sales were “higher than expected”.

But the rate at which grant eligible vehicles were sold in the following days was more than six times higher than normal, causing officials to implement the new grants on Sunday.

An average of 900 grants at the previous, more generous levels were claimed each day since the announcement, compared with 140 during the first six months of the year.

Cash incentives through the plug-in car grant have been offered since 2011 to encourage more people to buy greener cars.

Vehicles included in the scheme were previously divided into three categories based on their CO2 emissions and zero-emission range.

Motorists who bought Category 1 cars – pure electrics which meet the toughest CO2 restrictions – could claim up to £4,500 towards the cost of purchase.

Grants for Category 2 and 3 models – plug-in hybrids – reached £2,500.

Following the changes, the maximum grants for Category 1 cars has been cut by £1,000 while Category 2 and 3 models are no longer eligible for the incentives.

Motoring groups have warned that the decision will leave the Government struggling to meet targets to reduce vehicle emissions.

Steve Gooding, director of the RAC Foundation, said: “Whilst ministers might have fallen out of love with hybrid technology, this last-minute rush to showrooms suggests the reassurance of running in part on conventional fuel is attractive to buyers with range anxiety, especially when it comes at an attractive price.

“The big question is whether motorists’ enthusiasm for hybrids will hold up now that the plug has been pulled on the grant.”

The Government has announced a plan to ban new diesel and petrol cars and vans in the UK from 2040 in a bid to tackle air pollution.

A DfT spokesman said: “Following exceptional demand, the sales cap for all vehicles eligible for the grant has been reached, and the new grant rates are now in effect.

“These changes will allow us to focus support on zero-emission vehicles, such as pure electric and hydrogen fuel cell cars.

“Hybrid vehicles will continue to be supported through lower car tax rates, grants for charging infrastructure and local incentives such as free parking.”

Figures from the Society of Motor Manufacturers and Traders show the market share for alternatively fuelled new cars last month was 6.9%, up from 5.3% in September 2017.

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