Expert Blog

Clarification needed for those ordering low emission vehicles for Plug-In grant

Back in 2011, the Plug-In Car Grant scheme was launched by the Office for Low Emission Vehicles (OLEV), to continue to support the early adoption of ultra-low emission vehicles (ULEV) into the automotive marketplace.

It was designed to accelerate the uptake of ULEVs (currently any vehicles which produce 75g/km CO2 or less) by enabling motorists to receive up to a 35% discount (or up to £5,000) off the basic purchase price of an eligible car.

While this was originally supposed to stop until either 50,000 qualifying cars had been sold, or in 2017 regardless, accelerated uptake of ULEVs such as the BMW i3 Range Extender, Audi A3 e-tron and Mitsubishi Outlander 2.0 PHEV has seen registrations of vehicles applicable for the plug-in grant surpass 14,500 between January and June 2015.

This represents a 256% increase on suitable vehicles registered in the first six months of 2014 alone, while already exceeding 2014’s whole-year-total. Favourable tax incentives due to low emissions and healthy MPG figures have clearly had the desired effect; the Plug-In Car Grant scheme could cease as early as August or September 2015.

Although OLEV has announced a further £200m to continue the scheme between 2015 and 2020, and will continue to honour any existing deals placed with them before the grant period has expired, some fleets may miss out on receiving this for existing and future orders.

As the exact end date of the grant is flexible, and despite OLEV’s best efforts to notify fleets of any sudden changes, fleet managers will need to ensure that orders for the ULEV grant have already been placed on existing deals, ULEVs have been assigned to their applicable customers and will be delivered within nine months of the grant expiring, and all paperwork has been fully submitted.

Any existing orders that do not currently have OLEV grant paperwork submitted, or should the estimated delivery date of a qualifying vehicle be extended beyond the scheme expiry date, are in risk of not qualifying for the maximum £5,000 grant. 

Hitachi Capital have already removed two models from their qualifying list, due to lengthy lead times combined with an uncertainty as to when the current grant will expire.

Alongside ensuring that all existing orders are in a position to be honoured should OLEV advise fleets that the grant is ending, fleets will need to stay on top of future OLEV announcements outlining changes to the criteria for qualifying vehicles.

Despite rising numbers or fleets adopting ULEVs and qualifying for the plug-in grant, businesses will need to keep abreast of Government alterations going forward. Prioritising existing deals, alongside keeping on top of future changes to grant allowances, will reflect favourably on their bottom line in the long-term.

- Suzanne Phillips, National Fleet Consultant, Hitachi Capital

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