The future of the Plug in Car Grant (PiCG) - which sees government subsidies knock £3,500 off the price of a new electric car - looks increasingly shaky, following statements from two Government ministers that cast doubt on the scheme, which is due to end in March 2020 by default.
This is despite the ban on sales of new petrol and diesel vehicles being brought forward from 2040 to 2035, and the expansion of the ban to take in hybrids and plug-in hybrids (PHEVs).
The Department for Transport’s Future of Transport Minister, George Freeman, told Auto Express the grant was only ever intended "to kick-start the early market for electric vehicles, and funded over 200,000 electric vehicles including pure electrics and plug-in hybrids."
Freeman added: “But as prices of these cars come down, it is right that the Government ensures value for money for the taxpayer while focusing our support on zero emission models.”
The increasing popularity of electric cars bringing about a reduction in pricing is, however, an uncertain future trend. Car makers struggle to turn a profit on electric cars, with Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, describing EVs as “generally loss leaders” for firms.
Further uncertainty over the future of the PiCG was sewn by secretary of state for justice, Robert Buckland, who told a Question Time audience that instead of the PiCG: “We think there’s a better way of doing it...By scaling up the infrastructure it means that more people will start to buy electric cars, and with that scale of demand then the price starts to come down. I think that’s the way we’re going to do this.” Buckland added that he couldn’t “judge what’s going to happen in the budget”, however.
The Budget, which is to be delivered on March 11, is under the control of the Chancellor of the Exchequer and the Treasury, with a spokesperson for the latter telling The Telegraph that “We have always said we would phase out the subsidies gradually, but there are other ways we can help people to go electric.”
The paper’s Government source insisted that “consumer incentives will continue to play a role beyond 2020” and that “we are not going to end up in a cliff-edge situation where we suddenly stop subsidising electric cars”.
But with rumours continuing to circulate that the PiCG will end in March, and no firm denial from Government this this will be the case, it looks increasingly likely that the only incentives to remain will be a £500 discount on home EV chargers, exemption from VED road tax, and reduced taxation for company car drivers, who will escape all Benefit-in-Kind charges this financial year if they choose an electric car.
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