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Subsidy cut leads to fall in ULEV grant applications

Thursday 22nd September 2016

A reduction in the amount of money available through a Government subsidy for new electric cars has led to the number of claimants falling to a two-year low, according to the RAC Foundation.

The motoring charity has obtained figures which show that just 4,200 drivers applied for the plug-in car grant between April and June 2016, compared to 17,500 during the previous three months.

With traffic levels at a record high, the Government is keen to promote the use of ULEVs to help reduce emissions. However, it was recently criticised by the Environmental Audit Committee for failing to implement a clear strategy to increase the use of low emission vehicles.

On 1 March, the Government announced it was to cut the amount of money available to motorists buying new electric or hybrid cars. The grant was reduced from £5,000 to either £2,500 or £4,500, depending on zero-emission range.

While the number of grant applications may have plummeted, figures released by the DfT on 8 Sept show a record number of new ULEVs were registered in the UK during the second quarter of 2016.

9,657 ULEVs were registered during the three-month period from April to June, a year-on-year increase of 49% and a 253% rise on the same period in 2014.

The RAC Foundation suggests the drop-off in applications has been caused by drivers seeking to buy their car before the subsidy was cut.

Steve Gooding, the charity’s director, said: “Given that a 5p charge for a plastic bag changed the shopping behaviour of millions, it should be no surprise that when thousands of pounds are at stake drivers are very shrewd about their buying decisions.

“The cost of green cars is pivotal to their take-up and the market will remain acutely sensitive to changes in price, whether that is driven by manufacturers or ministers.”

 

 

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