PICG to be cut under £35k, removed over £35k
Discussion
https://www.thetimes.co.uk/article/end-of-the-road...
Grants for electric cars will be cut by £500 and abolished altogether for more expensive models under plans designed to stretch taxpayer support further.
The government will announce that the plug-in car grant will drop from £3,000 to £2,500 from today after a surge in demand for electric vehicles put massive strain on the scheme.
At the same time, the upper limit of cars eligible for the scheme will be reduced from £50,000 to £35,000.
The change means that Tesla’s popular Model 3, which costs from £40,500, will no longer be covered by the grant. It has consistently been the country’s best-selling electric car over the past year.
Other new models, such as the forthcoming Ford Mustang Mach-E, will not be covered either.
The government insists that overall funding for electric cars will remain unchanged. In March last year the Treasury announced that £403 million would be made available for the plug-in car grant up to April 2023.
However, Whitehall sources told The Times that huge demand for electric cars meant that it was no longer sustainable to keep individual grants at previous levels, meaning that the pot will be spread more thinly over the next two years.
It was claimed that more than half of electric car models would still be eligible for funding after the change.
“We’re ending the Tesla subsidy,” the source said. “Taxpayers should not be subsidising people to buy £50,000 cars.”
The move is likely to annoy motor manufacturers and environmental groups, which have called for more generous incentives to allow motorists to abandon petrol and diesel cars in favour of less polluting models.
Although plug-in cars have far lower day-to-day running costs, the upfront price is still seen as a huge driver of sales.
The government has already announced that it will ban the sale of petrol and diesel cars and vans in 2030, with hybrids following five years later.
Some 108,205 pure electric cars were sold last year, almost three times the number in the previous 12 months, although they still made up only 6.6 per cent of new registrations.
The plug-in car grant has steadily been cut over the past two and a half years. It was £4,500 in late 2018.
The government insisted that the overall level of funding remained “as high as ever”.
It added: “Given soaring demand we are refocusing on the more affordable zero-emission vehicles . . . where taxpayers’ money will make more of a difference.”
Edmund King, the AA president, said: “This is not great news for those waiting for delivery of the stylish entry-level Ford Mustang Mach-E as they will find that the price has ‘gone up’ by £3,000. Many buyers would have been counting on the subsidy.
“On the other hand, most drivers knew that the ‘free ride’ wouldn’t last for ever and at least more early adopters should be able to benefit from spreading the grant further.”
This month, the Social Market Foundation, a cross-party think tank, called on the government to abolish VAT on electric cars for people from poor households, providing about a £6,000 discount for some cars.
The report said that electric cars could cost up to £10,000 more than petrol or diesel equivalents, and although plug-in vehicles are much cheaper to run, that initial price difference affects sales hugely.
It said that the up-front price of electric cars was “not expected to be comparable with conventional vehicles until late 2020s”.
It warned that it could potentially delay transition to green cars, particularly among poorer households.
Grants for electric cars will be cut by £500 and abolished altogether for more expensive models under plans designed to stretch taxpayer support further.
The government will announce that the plug-in car grant will drop from £3,000 to £2,500 from today after a surge in demand for electric vehicles put massive strain on the scheme.
At the same time, the upper limit of cars eligible for the scheme will be reduced from £50,000 to £35,000.
The change means that Tesla’s popular Model 3, which costs from £40,500, will no longer be covered by the grant. It has consistently been the country’s best-selling electric car over the past year.
Other new models, such as the forthcoming Ford Mustang Mach-E, will not be covered either.
The government insists that overall funding for electric cars will remain unchanged. In March last year the Treasury announced that £403 million would be made available for the plug-in car grant up to April 2023.
However, Whitehall sources told The Times that huge demand for electric cars meant that it was no longer sustainable to keep individual grants at previous levels, meaning that the pot will be spread more thinly over the next two years.
It was claimed that more than half of electric car models would still be eligible for funding after the change.
“We’re ending the Tesla subsidy,” the source said. “Taxpayers should not be subsidising people to buy £50,000 cars.”
The move is likely to annoy motor manufacturers and environmental groups, which have called for more generous incentives to allow motorists to abandon petrol and diesel cars in favour of less polluting models.
Although plug-in cars have far lower day-to-day running costs, the upfront price is still seen as a huge driver of sales.
The government has already announced that it will ban the sale of petrol and diesel cars and vans in 2030, with hybrids following five years later.
Some 108,205 pure electric cars were sold last year, almost three times the number in the previous 12 months, although they still made up only 6.6 per cent of new registrations.
The plug-in car grant has steadily been cut over the past two and a half years. It was £4,500 in late 2018.
The government insisted that the overall level of funding remained “as high as ever”.
It added: “Given soaring demand we are refocusing on the more affordable zero-emission vehicles . . . where taxpayers’ money will make more of a difference.”
Edmund King, the AA president, said: “This is not great news for those waiting for delivery of the stylish entry-level Ford Mustang Mach-E as they will find that the price has ‘gone up’ by £3,000. Many buyers would have been counting on the subsidy.
“On the other hand, most drivers knew that the ‘free ride’ wouldn’t last for ever and at least more early adopters should be able to benefit from spreading the grant further.”
This month, the Social Market Foundation, a cross-party think tank, called on the government to abolish VAT on electric cars for people from poor households, providing about a £6,000 discount for some cars.
The report said that electric cars could cost up to £10,000 more than petrol or diesel equivalents, and although plug-in vehicles are much cheaper to run, that initial price difference affects sales hugely.
It said that the up-front price of electric cars was “not expected to be comparable with conventional vehicles until late 2020s”.
It warned that it could potentially delay transition to green cars, particularly among poorer households.
My personal view based on threads on here and Speakev is that most “purchases” over this sort of value are how leases or PCP. Very few buy their cars outright ( I am lucky enough to have done that, but it cost less than £35k!).
As such it will just mean “a bit more on the monthlies”.
How many people actually “own” a Tesla M3P?
As such it will just mean “a bit more on the monthlies”.
How many people actually “own” a Tesla M3P?
Seems reasonable to me. I don't understand why we've been subsidising £50k cars either. I've seen some YouTube pundits questioning why electric versions of ICE cars need to be £10k more expensive, and if their claims are right then perhaps manufacturers could do more themselves to incentivise people to make the switch.
To be expected and probably a sensible move to wind it back now EVs are catching on and from 2030 that's all you will be able to buy.
There was sense pump-priming demand in the early years but no sense in just keeping a government bung on all purchases long term.
If some EV's are too expensive, well, buy a cheaper one. We'd all love a Bentley on a Nissan budget.
If all new EV's are too expensive, well, keep your current car or buy a used one. While we've all grown used to chopping in cars frequently and getting new on cheap PCP deals, there's no golden rule that everyone should be able to buy a new car. It never used to be like that - cars were expensive, you kept it as long as it lasted and probably bought second hand the next one.
2nd hand EVs will come along in volume soon enough if you really want one and can't afford new, and nobody its going to take the ICE car off you after 2030 anyway.
There was sense pump-priming demand in the early years but no sense in just keeping a government bung on all purchases long term.
If some EV's are too expensive, well, buy a cheaper one. We'd all love a Bentley on a Nissan budget.
If all new EV's are too expensive, well, keep your current car or buy a used one. While we've all grown used to chopping in cars frequently and getting new on cheap PCP deals, there's no golden rule that everyone should be able to buy a new car. It never used to be like that - cars were expensive, you kept it as long as it lasted and probably bought second hand the next one.
2nd hand EVs will come along in volume soon enough if you really want one and can't afford new, and nobody its going to take the ICE car off you after 2030 anyway.
Nuts. I was considering a Polestar 2 for later on this year. However I think they are right. It had to come to an end at some point and I think the now the EV market has gained enough momentum now to move ahead on it's own steam. There has been a lot more choice appearing over the last few months.
https://www.gov.uk/government/news/plug-in-car-van...
On GOV.UK now, so official.
Effective today, so no warning lol.
Hard to argue against the logic of it though. If you’re considering a Tesla or other premium EV it’s because you want that brand, the grant is a nice bonus.
The grant is - or should have been - about getting your average person out of their new ICE car, into an EV. For the most part that’s going to be people in runabouts - e.g. Zoes, Leafs, i3s, etc.
On GOV.UK now, so official.
Effective today, so no warning lol.
Hard to argue against the logic of it though. If you’re considering a Tesla or other premium EV it’s because you want that brand, the grant is a nice bonus.
The grant is - or should have been - about getting your average person out of their new ICE car, into an EV. For the most part that’s going to be people in runabouts - e.g. Zoes, Leafs, i3s, etc.
Edited by Durzel on Thursday 18th March 08:22
page3 said:
My view is that the manufacturers have been artificially inflating their prices in order to pocket the grant money. I don’t believe the consumer has benefited for quite a while.
I suspect you're right. Prices move to what they think the market will bear. Same with many other things.page3 said:
My view is that the manufacturers have been artificially inflating their prices in order to pocket the grant money. I don’t believe the consumer has benefited for quite a while.
Yep, exactly the same as grants for charger installation, sucked up by the installers. Same as any grant scheme frankly, straight into the pockets of the profiteers and rarely, if ever achieve the desired goals.andyeds1234 said:
page3 said:
My view is that the manufacturers have been artificially inflating their prices in order to pocket the grant money. I don’t believe the consumer has benefited for quite a while.
This.. watch the prices drop.Not sure on where commercial stands, that GOV article states From today (18 March 2021), the government will provide grants of up to £2,500 for electric vehicles on cars priced under £35,000.
So the words "vehicles" then "cars" in the same sentence, is the commercial grant dropping from up to £8000, down to £2500!
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