Renault Group

All about electric car grants in the UK

17 March 2021
4 min
The UK’s environmental “Road to Zero” (emissions) strategy has gained traction and clarity with the country’s transition to renewable energies, and the complete bans on sales of vehicles with internal combustion engines by 2030 and plug-in hybrid electric vehicles by 2035. The future of the electric vehicle is no longer a question for the UK, but a certainty. And, to encourage drivers to go electric sooner rather than later, local and national governments offer a range of subsidies and grants. Here we look in detail at the type of financial advantages available to electric car drivers in the UK.
by Renault Group

What are the UK government’s grants for electric cars?

There are two main electric car grants available for individuals in the UK, the Plug-in Car Grant and the Electric Vehicle Homecharge Scheme.

The Plug-in Car Grant (PiCG) scheme was launched in 2011 to encourage the evolution of low-emission mobility, and to make the electric car accessible to as wide a public as possible. Good news for drivers: the PiCG electric car grant was scheduled to end in Spring 2020 but has been extended until 2022-23.

Research has shown that most electric vehicle owners choose to charge their cars at home. So, in order for this technology to continue its upward trend, the UK government also provides an electric car charger grant called the Electric Vehicle Homecharge Scheme (EVHS) for the purchase and installation of a dedicated electric car charging point at home.

How much are electric car grants?

For the PiCG, the UK government announced that “Starting Thursday 12 March [2020], those making the switch to electric cars will be eligible for a grant of up to £2,500.” In total, the UK government’s Office for Low Emissions (OLEV) has pledged to provide £403 million for the PiCG electric car grant.

The EVHS electric car charger grant for domestic electric car charging points offers a “75% contribution towards the cost of one charging point and its installation up to a maximum of £350 per household/ per eligible vehicle for installations that take place on or after the 1st of April 2020.”

Which vehicles are eligible for the electric car grants?

From cars to vans, motorbikes to taxis, and even large trucks, the PiCG electric car grant applies to a long list of road-driven electric vehicles.

For cars, the eligibility rule is that vehicles must “have CO2 emissions of less than 50g/km and [be able to] travel at least 112 kilometres (70 miles) without any emissions at all”. They must also have a recommended retail price of less than £50,000, including VAT and delivery fees. This criteria differs for other types of vehicle, including taxis.

However, vehicles that do not meet all the criteria for the PiCG grant may still be apply for the EVHS grant. All vehicles that have been approved as “ultra-low emission” by OLEV are eligible for the Electric Vehicle Homecharge Scheme.

Can I get an electric car grant for used cars?

The PiCG and EVHS apply to both new, used and leased vehicles provided they have not claimed against a previous scheme offered by the UK government and that the vehicle still adheres to the eligibility requirements. Vehicles must also be registered in the UK to apply for both the PiCG and the EVHS.

For the PiCG, second-hand vehicles must be purchased through accredited dealerships. The dealer applies for the grant on behalf of the driver, and then removes the amount from the vehicle’s retail price if successful.

To claim the EVHS grant on a used vehicle, the driver must show proof of purchase and be listed as the primary user. For cars leased by companies or individuals, the named driver must have the vehicle for at least 6 months. As with the PiCG, the EVHS grant is applied for by the installation company.

The UK isn’t the only place where you can apply for a used electric car grant. To take just one example, California’s Clean Vehicle Assistance Program provides grants and financing to help drivers purchase or lease a new or used hybrid or electric vehicle.

What electric vehicle incentives exist in the UK?

As well as the two main electric car grants, there are other financial incentives for driving an electric vehicle in the UK.

If you have a company car that you drive for both professional and personal uses, going electric can reduce the amount of tax — called Benefit-in-Kind — by a considerable amount. From April 2020, the UK government not only modified the way it calculates this tax in order to favor vehicles with low emissions, but also introduced a zero percent BIK rate for 100% electric vehicles, which then rises to 1% in 2021-22 and 2% in 2022-23. Using electric cars for work is also financially interesting for the company itself: the UK government offers businesses a 100% first-year allowance for electric vehicle charging equipment.

What national and regional EV subsidies are available?

In Scotland, electric vehicle owners can benefit from interest-free loans of up to £35,000 when buying an EV in the country, while over in Northern Ireland the government offers a maximum grant of €5000 for privately-purchased electric vehicles, and €3,800 for commercially-bought electric vehicles. If you’re based in or around London, driving electric has numerous incentives, from free parking, the ability to drive in bus lanes and access to certain restricted zones.

To see what other incentives are available, use the dedicated Go Ultra Low Local Incentives Tool. This provides local information such as residential charging availability, electric car charging points at car parks, and the existence of Ultra-Low Emission Zones – such as in London where ICE (Internal Combustion Engine) powered vehicles pay a congestion fee, but electric and eligible hybrid vehicles go free!

Other electric car grants around the world

Many countries around the world are shifting from offering direct subsidies to regulatory policies through mandates and standards. That said, there are still a wide variety of financial incentives, such as electric car grants, available for drivers. China, for example, recently extended its subsidy scheme until 2022 at the same time as extending its New Energy Vehicle mandate and CO2 emissions standards. Other countries who took similar steps recently to strengthen or implement new incentives include France, Germany and Italy.


Copyrights : xavierarnau, Alena Kravchenko

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