Ministers are cutting back on the money available for buyers of pure battery electric vehicles, from £4,500 to £3,500.
However, taxi purchases remain unscatched from the government cuts.
Buyers of plug-in hybrids will also soon find themselves unable to claim a government grant. The plug-in car grant was introduced in 2011 since when it has been used to subsidise the purchase of more than 160,000 ultra-green vehicles. The current grant is tiered and eligible vehicles fall into one of three categories depending on their battery-only range. But now the scheme will focus only on those cars that have a battery-only range of at least 70 miles (current category 1 cars). Government funding on the new EV taxis will remain the same and does not fall into “plug-in car grant” category. A spokesperson from electric taxi manufacturers LEVC said: “The grant to support electric taxis is provided through a separate "plug-in taxi grant" - this funding pot is guaranteed until 2020 or for the first 10,000 vehicles - whichever milestone is hit first.
“There have been no changes to this scheme.”
However, cars currently falling into categories 2 and 3 – effectively hybrids, including Uber’s car of choice the Toyota Prius – will in the future be excluded from the scheme.
Steve Gooding, director of the RAC Foundation, said: “The plug-in grant schemes were never going to run on indefinitely, but the Government is taking a gamble by turning the tap off entirely for plug-in hybrids. “Although hybrid sales are outstripping those for pure battery-electric cars the widening price differential might be enough to make some potential purchasers think again, though it’s good to see that those who opt-for any form of plug-in will still get up to 75% support for installing a charge-point at home. “Looking at motoring costs in the round – including servicing, fuel, insurance etc – a pure battery-electric car might be an attractive option, particularly for those with off-street parking where a Government grant-supported charger can be installed. “But with uncertainty over residual values also to be factored-in the substantial price gulf between the new and old technologies is still an issue. “As this change to the grant hints at, the gap will need to be closed by the market rather than government in order for a true electric revolution to take place.” The changes will come into effect on 9 November or sooner if there is a sudden surge in demand for low-emission vehicles.