Last week the government announced the plug-in car grant scheme for electric vehicles (EVs) closed, having previously confirmed funding until 2022-23. Why? Well, the government stated it would allow it to concentrate funding towards what it called the main barriers to the EV transition, including public charging and supporting the purchase of other vehicles. The £300mn available in plug-in grant funding will now be refocused towards extending plug-in grants for vans, trucks, taxis, motorcycles, and wheelchair accessible vehicles.
While there are concerns that the grant cut will undermine consumer confidence at a time of rising costs and inflation, government emphasised that new car EV sales have surpassed the Office for Zero Emission Vehicle’s (OZEV) original expectations when the grant was first launched. However, new BEV van registrations have not met OZEV’s original projections, with issues including limited model choice holding back uptake. Only £150mn of grant funding has been provided for vans to November 2021 compared to £1,360mn for electric cars. With van model choice now increasing, and demand picking up, the government has decided to shift support away from the fast-growing electric car market to ensure funds are available to support e-van purchases, with upfront costs remaining a big challenge for many fleets.
Hey, are you ready for this?
The grant ending means that the 24 cars that were under its £32,000 threshold will no longer receive the £1,500 grant off the vehicle cost, effectively increasing the price for consumers overnight. The government has gradually dropped the plug-in car grant value and threshold over time since its introduction in 2011, and was expected to end the grant entirely in the relatively near-term. However, some have responded negatively to the timing of the change with the Society of Motor Manufacturers and Traders (SMMT) stating the decision came “at the worst possible time” and sends the “wrong message to motorists”. Others such as the British Vehicle Rental & Leasing Association (BVRLA) believed it was right that the government prioritises its EV subsidies towards vans and charging infrastructure but suggested that OZEV should extend the window for cars to be delivered once ordered and still receive the grant beyond the current 12 months, due to supply issues causing significant delivery delays.
Are you hanging on the edge of your seat?
Alongside offering grants to the vehicle types still needing support, and to groups such as disabled drivers, the industry has indicated that price has become a relatively less important issue for electric cars over time, with charging becoming an increasingly prominent concern. The majority of EV owners (95% in a recent survey from the Department for Transport) currently have access to off-street parking, but there is a real challenge now in ensuring the public infrastructure is able to support all kinds of drivers and the varied needs of fleets. Around 30% of households in England do not have access to off-street parking, rising to 60% in cities. This is reportedly even higher for fleet drivers who take their vehicle home overnight, who will likely be more reliant on local public charging solutions. To support fleet electrification, access to on-street charging for vans will be key, as well as schemes like local rapid hub charging.
SSE Energy Solutions and Cornwall Insight Electric Vehicle Webinar
28 June 2022 | 1 – 2pm
SSE Energy Solutions and Cornwall Insight will be digging into the challenges of providing charging infrastructure for fleets in a free webinar at 1 – 2 pm on 28 June 2022. The panel will be sharing their expertise and insider knowledge on the issues and solutions, and you’ll also have the opportunity to have your questions answered via live Q&A session with the panel. Please register here.