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The plug-in car grant: a quick guide to what you need to know

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To encourage us all to make the switch to electric vehicles, the Government offers money off the cost of buying one, in the form of the Plug-in Car Grant. So how much is the grant worth, which cars are eligible for it, and how well has it worked so far? We answer all these questions, and more, below.

THE ORIGINS OF THE PLUG-IN CAR GRANT

The grant was announced by Gordon Brown’s Labour Government in 2009, although it wasn’t actually introduced until January 2011, by which time the Conservatives and Liberal Democrats were in government. The aim was clear: to get more people to choose electric cars, and thereby cut carbon dioxide and other emissions on Britain’s roads.

Back then, the electric car market was still in its infancy, and only one eligible model was on sale when the grant launched - the Mitsubishi i-MiEV. However, it was soon joined by electric cars from Citroën, Nissan, Peugeot and others in early 2011. Today, there are 35 different models eligible for the grant, including not only Battery Electric and Plug-in Hybrid Vehicles, but also the Toyota Mirai, a Hydrogen Fuel Cell Vehicle.

THE PLUG-IN CAR GRANT TODAY

Originally, the grant gave buyers £5,000 off the cost of any plug-in electric car. In March 2016, though, the Government reduced the grant and introduced different levels for three different categories of car, dependent on their CO2 emissions and their zero-emission range. Now, the most you can get is a grant of £4,500 for the cleanest cars. The table below shows which models are eligible for each level of the grant.

Vehicles in categories 2 and 3 must have a sticker price of less than £60,000 to be eligible for the grant, ruling out more expensive Plug-in Hybrids such as the BMW i8 and the Audi Q7.

The Government has committed to continuing the scheme until at least March 2018. However, a review of the levels of the grant is due in March 2017.

UPTAKE OF THE PLUG-IN CAR GRANT

Sales of electric cars have soared since 2011, although it is unclear how much of this is due to the grant. Manufacturers are constantly developing new, better models that cost less and can go further on a single charge, making it more appealing to drivers to make the switch.

In 2010, the year before the Plug-in Car Grant was introduced, 255 new ultra-low emission cars were registered in the UK, according to the Department for Transport. In the year from October 2015 to September 2016 – the latest period for which official figures are available – 38,827 were registered. 36,201 of those were eligible for the grant. This rapid increase is shown in the graph below.

In total, from January 2011 to the end of September 2016, 78,549 new grant-eligible cars were registered in the UK.

THE PLUG-IN VAN GRANT

In 2012, the Government extended plug-in grants to vans as well. The Plug-in Van Grant offers 20% off the cost of an electric van, up to a maximum of £8,000.

To qualify for the grant, vans must emit less than 75g CO2/km, and must be able to go for at least 10 miles in zero-emission mode. There are currently nine eligible models of electric van, including the Renault Kangoo ZE and the Mercedes-Benz Vito E-CELL.

Since January 2012, 2,816 new grant-eligible electric vans have been registered in the UK, most of them in the last two years.

Of course, the offer of a government grant is just one thing to think about when considering whether an electric car is right for you or your fleet. Stay tuned to Hitachi Capital's blog for further articles setting out the pros and cons of the various Alternatively-Fuelled Vehicles on the market.

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