The UK government has decided to pull the plug on the subsidy for new electric vehicles to focus on other areas in the EV space.
In a statement, the Department for Transport said it was “closing the plug-in car grant scheme to new orders after successfully kickstarting the UK’s electric car revolution and supporting the sale of nearly half a million electric cars.
The £1500 plug-in car grant (PiCG) was launched in 2011 to encourage EV uptake among UK citizens.
According to the government, the PiCG has created a mature market for ultra-low emission vehicles and supported the sale of nearly half a million electric cars.
“Battery and hybrid electric vehicles (EVs) now make up more than half of all new cars sold and fully electric car sales have risen by 70% in the last year, now representing one in six new cars joining UK roads,” the statement read.
The move drew criticism from the auto industry, but the government stressed that it “has always been clear the plug-in car grant was temporary”.
Now, the government plans to refocus the £300m in grant funding to expand the public charge point network and support the sales of other types of EVs such as taxis, motorcycles, vans and trucks and wheelchair-accessible vehicles.
Responding to the announcement, Society of Motor Manufacturers and Traders chief executive Mike Hawes said: “The decision to scrap the Plug-in Car grant sends the wrong message to motorists and to an industry which remains committed to Government’s net-zero ambition.
“Whilst we welcome the government’s continued support for new electric van, taxi and adapted vehicle buyers, we are now the only major European market to have zero upfront purchase incentives for EV car buyers yet the most ambitious plans for uptake.
“With the sector not yet in recovery, and all manufacturers about to be mandated to sell significantly more EVs than current demand indicates, this decision comes at the worst possible time.”
Earlier this week, the British Vehicle Rental and Leasing Association urged the Chancellor to keep the Benefit-in-Kind (BiK) tax rates low.