Question to the Department for Transport:

To ask Her Majesty's Government what assessment they have made of their decision to alter the grant scheme for plug-in electric vehicles, announced on 18 March, on demand for electric vehicles from (1) private individuals, and (2) fleet purchasers; and what further financial encouragement they intend to provide to fleet purchasers in order to meet the Government's targets for ending sales of petrol and diesel cars.

We signalled our intention to manage an exit from the plug-in car grant in our Road to Zero Strategy, published in 2018, and transition to support through other measures. As the market has developed, we have changed our criteria to focus the plug-in car grant on vehicles, which have the greatest impact on reducing carbon emissions.

In March 2020, the Government extended the plug-in vehicle grant schemes for another three years to 2022/23. For cars, the grant rate is being reduced from £3,000 to £2,500 per car, allowing the funding to last longer and make it available to 20% more drivers, with the cap reducing from £50,000 to £35,000.  The increasing choice of new vehicles, growing demand from customers and the rapidly rising number of chargepoints, means we are today, re-focusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference.

Although the market is at an early stage, demand for zero emission vans increased substantially in 2020, with increased interest from commercial fleets. We expect this trend to continue as more models are brought to market and supply increases. Since the grant scheme was launched in 2012, it has since supported over 15,000 electric vans and HGVs across the UK. There are now more than 20 models eligible for the grant and this continues to increase.

The Government has pledged a £2.8 billion package of measures to support industry and consumers to make the switch to cleaner vehicles including £1.3 billion for charging infrastructure, £582 million for vehicle grants and up to £1 billion to help secure the transformation of the automotive sector by developing and embedding the next generation of automotive technologies in the UK. We keep our policies and grant rates under review and will monitor the market closely, to ensure the grant remains an effective incentive and good value for money for the taxpayer.