Currently reading: Industry responds to reduction in EV grant
Senior figures from Volkswagen, Polestar and BMW call for more strategic thinking from the government
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4 mins read
25 March 2021

Senior figures from the automotive industry have called for more “consistency” from ministers in response to the government’s decision to drop the level of the plug-in car grant.

Last week, the government downsized the financial incentive package offered to EV owners in the UK, reducing the grant from £3000 to £2500 and lowering the upper price limit for eligible vehicles from £50,000 to £35,000.

Speaking to journalists during the SMMT Electrified conference, key figures from Volkswagen, Polestar and BMW all underlined the need for clearer policy direction from the government.

Jonathan Goodman, Polestar's UK chief executive and head of global communications, said that he wouldn’t like to see any further overnight changes: “The issue for me is consistency. If you have a programme in place to incentivise, you’re getting people looking consistently at that programme and considering it. Then to go from one minute to the next, where the incentive is no longer in place, confuses the consumer. We’ve dealt with forests of calls over the last week with people who just don’t understand if they’re impacted or not.

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“We have to have a consistent approach to this to enable the manufacturers to plan - it’s already a very tight deadline - and therefore we’ve got to get that consistency. That would be my plea.”

It was a view echoed by others. Graham Grieve, chief executive of BMW UK, felt that clarity was lacking. Grieve made the case that the announcement “seems counterintuitive to the bold statements they’ve made ahead of [United Nations climate change conference] COP26… They’ve got to come up with a clear plan to incentivise consumers to move away from ICE to electric. Quite simply, electric cars are more expensive to manufacture and therefore they’re more expensive for consumers. The government needs to step in there. We’ve seen that incentives really do drive a change. With Norway, for me that would be the benchmark with a clear, 360deg plan to really drive the electric market.”

Grieve also felt further policy was required around electric charging infrastructure, saying “we’re a long way off making [off-street charging] happen. I don’t think it’s about benchmarking against other countries. If we’re going for a zero-emission new vehicle policy from 2030, we’re probably five or 10 years behind where we need to be in terms of charging infrastructure.”

Andreas Krüger, head of e-mobility at Volkswagen, asked for government to match the investment the German manufacturer is injecting into the charging infrastructure: “It’s not just Volkswagen signing access deals [with third-party charging companies], we are planning €400 million of our cash into the deals too. If there’s one thing I would leave with you today, it’s a plea for government to match our ambition with the appropriate incentive and a detailed comprehensive plan to develop charging infrastructure.”

Mike Hawes, chief executive of the SMMT, compared the government’s policy to a game of snakes and ladders: “The ownership experience must be cheaper, more enjoyable, easy. That is not yet the case. It’s not so much a race to zero as a game of snakes and ladders. Declare a 2030 end-of-sale date and align the industry – climb the ladder; cut plug-in car and van grant – slide down the snake; increase rapid and ultra-rapid charging on major roads – climb up another ladder; reduce home-charging grants – slide down another snake.”

At the same event, transport secretary Grant Shapps emphasised the monetary support available from the government, totalling £2.8 billion to speed up the transition towards an electrified transport network. This includes the £582 million for plug-in grants.

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Shapps underlined the government’s reasons for cutting the grant, stressing that there’s a need to focus where most consumers benefit. Shapps justified the reasoning behind the government’s decision: “We’ll continue to consider the long-term need for consumer incentives to boost uptake, taking into account the need to support an evolving market but also to ensure the taxpayer gets value for money. That’s why we’ve just announced the plug-in grant will now be targeted at more affordable electric models - those under £35,000 - which have increased in number by nearly half since 2019. [This will be] to allow more buyers to go green.”

Shapps also promised that the policy would continue to be reviewed.

READ MORE

Government cuts electric car grant from £3000 to £2500 

Which electric cars no longer qualify for a grant in the UK? 

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Gerhard 26 March 2021

It's about time the gov't incentivised the sale of cheaper EVs. If we're all to buy EVs from 2030 then we need cheaper MG-type EVs, so this reduction is going to 'focus the minds' of manufacturers to provide lower-cost EVs. The taxpayer cannot be expected to subsidise 'luxury' cars forever...

gavsmit 25 March 2021

Such a lot of fuss about the reduction of an amount of money that equates to a drop in the ocean when compared to the list price of an EV. 

The bottom line is that even if the grant was double what it is now, EVs would still be too expensive for me to consider one.

Andy_Cowe 25 March 2021
gavsmit wrote:

Such a lot of fuss about the reduction of an amount of money that equates to a drop in the ocean when compared to the list price of an EV. 

The bottom line is that even if the grant was double what it is now, EVs would still be too expensive for me to consider one.

The grant is to direct people on the fence towards a more sustainable future, not for someone who wouldn't be getting one either way. This is a minimum 6% difference (rising the further below £50K you go), and £3000 is a big number for many, including those who can consider £50K on a car.

 

"Shapps also promised that the policy would continue to be reviewed" means more last minute changes to further ruin confidence. A grant you cannot rely upon is pretty much useless.

smithopinion@ya... 25 March 2021

Incentives should be eliminated completely and then there would be no confusion.  If an EV sale cannot stand alone then there is no future because when sales go from 10% of total to 100% of total the government will never be able to support such stupidity.

Gerhard 26 March 2021
smithopinion@yahoo.ca wrote:

Incentives should be eliminated completely and then there would be no confusion.  If an EV sale cannot stand alone then there is no future because when sales go from 10% of total to 100% of total the government will never be able to support such stupidity.

 

Indeed, the incentives will have to end by 2030!

smithopinion@ya... 25 March 2021

The govenment should not be giving money to fence sitters and should not provide any incemntives at all.  This is not a sustainable solution and the govenment cannot afford to support these sales when the total is 100% of market share.  When you add the loss of petrol tax revenue and road taxes etc, the EV solution is just a way of getting the government to buy your car for you and it will not work.

Gerhard 26 March 2021
Andy_Cowe wrote:

gavsmit wrote:

Such a lot of fuss about the reduction of an amount of money that equates to a drop in the ocean when compared to the list price of an EV. 

The bottom line is that even if the grant was double what it is now, EVs would still be too expensive for me to consider one.

 

That might have made sense when EVs were all expensive and building up a customer base for a charging network was deemed desirable, but with the 2030 law coming in the EV offerings need to be at the lower-cost end of the market. This change to the limit should improve the offering from only 'luxury' to 'sensibly-priced' offerings.. although £25k is still a huge amount for a mid-size runabout...

The grant is to direct people on the fence towards a more sustainable future, not for someone who wouldn't be getting one either way. This is a minimum 6% difference (rising the further below £50K you go), and £3000 is a big number for many, including those who can consider £50K on a car.

 

"Shapps also promised that the policy would continue to be reviewed" means more last minute changes to further ruin confidence. A grant you cannot rely upon is pretty much useless.

jason_recliner 28 March 2021
gavsmit wrote:

Such a lot of fuss about the reduction of an amount of money that equates to a drop in the ocean when compared to the list price of an EV. 

The bottom line is that even if the grant was double what it is now, EVs would still be too expensive for me to consider one.

You know, for somebody who supposedly has so much money (according to you), you spend a lot of time complaining that everything is too expensive!!!

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