The automotive industry has responded to the £650 million Electric Car Grant (ECG) which will back manufacturers and allow discounts of up to £3,750 for new eligible electric cars priced at or under £37,000.
Applications can be made from 16 July and funding will be available until the 2028 to 2029 financial year.
Mike Hawes, SMMT chief executive, said: “Today’s announcement of the return of government support for the purchase of electric vehicles is a clear signal to consumers that now is the time to switch.
“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 1 in 4 today, to 4 in 5 by the end of the decade.
“This announcement is a welcome response to consistent calls from the industry for more support, which will be in addition to the substantive subsidies already provided by manufacturers. Taken with recent announcements regarding infrastructure investments and the Industrial Strategy, the UK has the opportunity to maintain its position as a leader in both the manufacture and sale of zero emission vehicles.”
Sue Robinson, CEO of the National Franchised Dealers Association (NFDA), added: “The Government has taken positive steps in building a constructive relationship with the automotive industry who have voiced concerns over the ZEV Mandate’s ambitious targets.
“In our response to the ZEV Mandate consultation, NFDA underscored the need for stronger incentives to boost consumer demand for electric vehicles. Our members are in the main EV ready, but they cannot sell EVs when so many are still perceived as representing poor value for money to the consumer.
Robinson notes that the cost of an EV has appeared in surveys as the main barrier to EV adoption.
“While this cost seems to be coming down, it is happening at a slower rate than the industry was hoping for. We have advocated for a return to an electric vehicle grant and called for improvements to inadequate charging infrastructure. It is vital that there is a coordinated and joined up approach to ensure that the transition to EVs is as consumer friendly as possible.”