The government said it would fund the grants until the 2028-29 financial year but the scheme could be amended or closed early, with no notice, if cash reserves for it were depleted. “This will remain under review,” said the spokeperson.
The move comes as car makers are working to hit the UK’s Zero Emission Vehicle (ZEV) mandate, which this year requires them to achieve an EV sales mix of 28% or be fined £12,000 per non-compliant vehicle. So far this year, just under 25% of all new cars sold in the UK have been fully electric, prompting concern – although manufacturers can also trade reductions in their fleet emissions for de-facto ‘sales’ of electric cars.
The motor industry has also flagged that EV sales are being propped up by sales to fleets, which receive significant incentives in the form of benefit-in-kind tax breaks.
Mike Hawes, chief executive of industry body the Society of Motor Manufacturers and Traders, has been one of the most vocal proponents for reintroducing an EV grant. He hailed the news as a “clear signal” for prospective buyers to go electric.
“Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four [new cars sold] today, to four in five by the end of the decade,” he said.
Adam Wood, managing director of Renault UK, said the incentives are “extremely welcome” but called for further action to hit the 80% EV sales threshold for 2030 set out by the Zero Emission Vehicle (ZEV) mandate. “It remains critical that car makers, infrastructure providers and government remain united in delivering everything required to make that happen,” he said.
A spokesperson for Volkswagen Group UK said it was “pleased” the government was implementing a new grant because it signals a “clear direction of travel” towards battery-electric cars. However, they added it was too early to forecast the grant’s impact on its customers, given it has yet to receive full details from the government.
Delvin Lane, CEO of charger provider Instavolt, said the grant will be a “major contributor” to boosting demand for EVs.