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Government plan to phase out £5k electric car grant is “cobblers”

The government is unlikely to scrap the £5,000 electric car grant at any point in the forseeable future, a Department for Transport official has told Recombu Cars. 

It had been reported that the plug-in car grant, given towards the cost of each new electric car or van, would be ‘phased out’. However a Department for Transport spokesperson has confirmed the reports put forward by the Daily Mail are simply untrue.

“Cobblers,” Richard Bruce of the Department for Transport’s Office of Low Emission Vehicles said when questioned about the allegations. “The electric car grant is staying as it is for now.”

Bruce did, however, admit there could be a shake-up of the grant as early as 2015. “[The government] will discuss with car manufacturers how best to proceed… The electric car grant could be increased, it could be decreased,” he added.

Although it is possible the grant could go the way of the dodo, it seems unlikely. For one thing, a recent government report has outlined plans to spend a whopping £500 million on the development of green transport between 2015 to 2020.

“We launched the Plug-in Car Grant and the Plug-in Van Grant to help reduce the cost differential between ULEVs and conventional vehicles,” the report said. “Sales momentum is now beginning to build and we expect this to continue as new vehicles enter the market and costs continue to fall, providing a more diverse choice for consumers at different price points.”

“We are also providing incentives for ULEVs through the tax system. The Government recognises the importance of stability in taxes as the market for these vehicles develops. We have committed to involving industry and wider partners in the process for subsequent development of the tax regime,” it added.

The government seems to think the system, as it stands, is working as intended. “Overall, the evidence suggests that the Government’s existing policies are broadly the right ones,” the report concludes.

But not everybody is happy with the £5,000 grant. Last night ministers reportedly accused it of only “subsidising second cars for affluent households”. The same ministers reportedly said the grant “cannot be maintained indefinitely”, which rings true – it’s hard to imagine the government continuing to pump cash into electric car subsidies if they ever become mainstream.

However £30 million has been set aside for the electric car grant, of which only £11 million has been allocated, so there’s plenty of headroom, particularly if the government allocates a portion of the half a billion pounds it has earmarked for the development of green transport between 2015 and 2020.

The electric car grant is automatically deducted when buying electric cars, hydrogen fuel cell vehicles and plug-in hybrids such as the Nissan Leaf, Ford Focus Electric, Renault Zoe and Volvo V60 Plug-In Hybrid. It has been going for two years.

 

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