Transport minister hints that subsidy for electric cars will be completely scrapped

Rachel Maclean, the minister for the future of transportation and decarbonisation, has hinted that subsidies to help people buy expensive electric cars will be scrapped

Rachel Maclean, minister for the future of transport and decarbonisation, has provided another hint that the government plans to cut subsidies to help drivers buy expensive electric vehicles.

With the ban on the sale of new petrol and diesel cars in just eight and a half years, drivers’ purchases will soon be limited to battery-powered models only.

The high price of electric models remains one of the main stumbling blocks that prevent motorists from buying them in larger numbers today.

Nevertheless, in March the government cut the Plug-in Car Grant, reducing both the grant amount by £500 to £2,500 and only qualifying models priced up to £35,000 when it was previously available for those up to £50,000.

In a recent interview with Trainer, Mclean defended the decision to cut the grant — and said its availability would be monitored.

First launched in 2011, the grant offered up to £5,000 off the price of new plug-in vehicles.

Over the last ten years, the subsidy amount and the eligible vehicle types have been regularly adjusted, with the last changes only a few months ago.

The move was reviled at the time by industry insiders and vehicle manufacturers, with Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, describing the decision as the “wrong move at the wrong time.”

He said the government had risked leaving the UK ‘even further behind other markets’ in terms of vehicle offerings and said it had sent the ‘wrong message’ to consumers’ who may be considering buying a greener vehicle. .

Ford of Britain chairman Graham Hoare said it was a ‘disappointing’ move that was ‘not conducive to supporting the zero-emissions future we all want’, while Nicholas Lyes, the RAC’s head of road policy, criticized MPs for making a decision that ‘people with longer can drive on their older, more polluting vehicles’.

The Plug-in Car Grant was first launched in 2011, offering up to £5,000 off the price of new plug-in vehicles.  Today, however, the value of the grant is just £2,500 - and only models costing less than £35,000 are eligible for the incentive

The Plug-in Car Grant was first launched in 2011, offering up to £5,000 off the price of new plug-in vehicles. Today, however, the value of the grant is just £2,500 – and only models costing less than £35,000 are eligible for the incentive

However, Maclean, who spoke exclusively to Autocar magazine, defended the actions.

She said it would be good for the government to focus subsidies only on cheaper electric vehicles because “people there are less likely to be able to finance the costs entirely out of pocket.”

The move means no Tesla vehicle will qualify for the scheme, nor will Ford’s new Mustang Mach-e, which will be priced in the UK from £40,270.

In fact, fewer than 30 electric cars on sale today qualify for the scheme – you can see which ones qualify in our full report.

The government's decision to lower the price eligible for the subsidy means that no Tesla car is eligible for the scheme

The government’s decision to lower the price eligible for the subsidy means that no Tesla car is eligible for the scheme

In the interview, Maclean also hinted that the days of the grant could be numbered, with the prospect of the incentive being scrapped entirely.

The government’s 2018 Road to Zero strategy first stated that as the market “became more established and competitive, the need for direct government financial support will diminish.”

It added: “We therefore expect to achieve a controlled exit from the subsidy in due course and continue to support the introduction of ultra-low-emission vehicles through other measures.”

Maclean – who owns an electric Jaguar i-Pace, which costs £65,000 and has never been eligible for the plug-in car subsidy – repeated that statement to Autocar, saying: ‘I think it’s good to to keep looking at that. [the future of the scheme]Because ultimately we need to make sure we don’t use public money to help people buy cars they could have afforded anyway.

“One of our concerns is to make this transition fair for everyone, and electric cars are obviously a bit more expensive at the moment, but if you factor in the total cost of ownership, they will soon be equal.”

Rachel Maclean drives an electric Jaguar i-Pace, which costs from £65,000 and was never eligible for the plug-in car subsidy

Rachel Maclean drives an electric Jaguar i-Pace, which costs from £65,000 and was never eligible for the plug-in car subsidy

Hydrogen and synthetic fuels will play a role in decarbonising transport, but NOT for passenger cars

In the interview, Maclean also suggested that hydrogen and synthetic e-fuels will play a role in decarbonising transportation, but are more likely to be applied to vehicle types other than passenger cars.

“The truth about hydrogen is that it is very expensive to produce,” the Transport Minister explained.

She added that the government will come up with a hydrogen strategy very soon, but suggested it would be to decarbonise other vehicle types, including trucks, planes and ships.

Maclean added that synthetic fuels, such as Porsche’s e-Fuel currently being developed in Chile, will also “play a role” in cutting emissions, but explained that it will be more likely to be used for aviation and maritime industry.

Porsche believes synthetic fuels should be part of the proposal to reduce vehicle emissions, but Maclean says they will likely only be used for larger modes of transport that are difficult to decarbonize

Porsche believes synthetic fuels should be part of the proposal to reduce vehicle emissions, but Maclean says they will likely only be used for larger modes of transport that are difficult to decarbonize

Given these statements, it appears that the government is well on track to continue its drive to make battery-powered electric cars mainstream.

An action plan of more than 200 pages was unveiled last week by Grant Shapps, with the ‘green print’ outlining how MPs plan to make all forms of domestic transport zero-emissions by 2050.

This included a commitment to explore a zero-emission vehicle mandate, which would impose rules on manufacturers requiring a certain percentage of their sales each year to be electric in the run-up to the 2030 ban.

However, Maclean said MPs gave the industry time to react to the plans — which would mirror those in California — before announcing next steps.

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