Purpose built EV taxis retain £7,500 Government grant, despite cut in private car grants

Image credit: LEVC

The grant scheme for electric cars, vans and trucks has been updated to target less expensive models and reflect a greater range of affordable vehicles available, allowing the scheme’s funding to go further and help more people make the switch to an electric vehicle.

From today, the Government will provide grants of up to £2,500 for electric vehicles on cars priced under £35,000.

It is hoped that this will mean the funding will last longer and be available to more drivers. Grants will no longer be available for higher-priced vehicles, which the Government say were typically bought by drivers who can afford to switch without a subsidy from taxpayers.

The number of electric car models priced under £35,000 has increased by almost 50% since 2019 and more than half the models currently on the market will still be eligible for the grant, including spacious family cars, such as the Hyundai Kona 39kWh and the MG ZS EV.

Government measures to encourage people to switch to electric vehicles are also working, with nearly 11% of new cars sold in 2020 having a plug. This was up from just over 3% in 2019 – and battery electric car sales almost tripled over that same period.

The plug-in vehicle grant scheme was renewed last year, with £582million of funding intended to last until 2022 to 2023.

Transport Minister Rachel Maclean said: “We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK.

“The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference.

“We will continue to review the grant as the market grows.”

According to John Heath, Market Development Manager for Dynamo Taxi, the changes will not affect the grants handed to taxi drivers making the switch to cleaner electric vehicles.

Heath said: “Just for clarity the grant reduction announced today by the Government only affects high end prices cars, trucks and vans - taxis are not affected.”

Vehicles that are purpose-built taxis and have CO2 emissions of less than 50g/km and can travel at least 112km (70 miles) without any emissions at all includes the Dynamo Taxi and LEVC TX.

The grant will pay for 20% of the purchase price for these two vehicles, up to a maximum of £7,500.

Private hire drivers wishing to make the move to electric have effectively seen the grant cut from £3,000 to £2,500.

Today's surprise announcement was described as "the wrong move at the wrong time" by SMMT chief executive Mike Hawes.

Mike Hawes said: “The decision to slash the Plug-in Car Grant and Van & Truck Grant is the wrong move at the wrong time. New battery electric technology is more expensive than conventional engines and incentives are essential in making these vehicles affordable to the customer.

“Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply.

“This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the Government’s ambition to be a world leader in the transition to zero emission mobility.”