Car makers can self-register EVs and get paid government grant

Car makers will be able to self-register eligible electric cars and receive the government's new Electric Car Grant (ECG), Autocar can reveal. Through the likes of demonstrators, employee vehicles sold through employee car ownership schemes and even press demonstrator vehicles, car makers will receive up to £3750 from the ECG purse, so long as the Office for Zero Emission Vehicles is informed, a Department for Transport (DfT) spokesperson has confirmed to Autocar. Such practice would be a huge boost in helping car makers with EVs eligible for the grant to be compliant with the government's ZEV mandate and avoid fines for non-compliance. While self-registrations have always counted towards ZEV mandate compliance, the fact that car makers will now get public money for this practice is surprising. At face value, the loophole undermines at the very least the spirit of the ECG, which was seemingly introduced with the goal of boosting sales of EVs to private buyers, and is one of a number of issues that Autocar has brought to the government's attention. In response to a series of questions highlighting potential loopholes in the new ECG, which was introduced with little warning last week, the government rejected suggestions that it unfairly offers public money to fleet buyers and company car drivers who don’t need any extra encouragement to make the switch. Private sales have typically made up only around one in five EV sales, and repeated calls for subsidies from the automotive industry since the introduction of the ZEV mandate last year have focused on helping to stimulate sales in this area of the market in order for car makers to keep up with the growth in electric car sales that the mandate requires. Meanwhile, fleet EV sales have long been incentivised through favourable benefit-in-kind tax rates that make them financially advantageous to a majority of company car buyers. These incentives have driven most of the growth in the EV market to date. However, the ECG is available to fleet buyers as well as private buyers, allowing public money to be used to help EV buyers effectively get extra financial relief from the government on a purchase they would probably make anyway. “The government is committed to supporting all consumers who would like to purchase an electric vehicle, whether that’s privately or through financing arrangements such as leases,” said the spokesperson after Autocar raised this particular point. It has emerged that the ECG has no minimum retention period after a customer has taken delivery of the car, potentially allowing them to flip the car for profit should a model be in demand and nearly new examples be selling close to or even above the cost of a new one. The government considers this scenario “unlikely” but said that “should this kind of behaviour materialise, the government would act swiftly to prevent it”. The DfT spokesperson also confirmed that unlike car makers, dealers won't be able to pre-register EVs and receive the ECG as grants are “only paid at the point a vehicle is delivered to a named customer”, though clearly now with the exception of car makers themselves. The spokesperson also denied that requirements to access the ECG are discriminatory against car makers from certain countries or that it was designed to encourage more local manufacture of EVs. The ECG’s qualification criteria are based on the emissions of a country rather than the operations and manufacturing plant of a car maker itself. This means that EVs made in the likes of China, South Korea and Japan are likely be excluded, together with those from Poland, due to the reliance on fossil fuels in the energy production of these countries. According to The Telegraph, China has already said the ECG violates World Trade Organization rules about creating a “non-discriminatory” trading environment. It is understood that politicians from other countries whose EVs have been excluded have also written to the government or plan to do so. “All manufacturers are treated equally,” said the DfT spokesperson in response to claims that the ECG’s qualification criteria is discriminatory. “If a manufacturer feels that their local electricity arrangements mean their manufacturing is greener than the baseline data, they can request a review to have their scoring altered. “The government is confident that the scheme is in keeping with its international obligations, and we will continue to work with our partners internationally to support the zero-emission vehicle transition.” Car makers will be able to request a review if they are initially ruled unable to offer the ECG to buyers, the spokesperson added. However, it was confirmed that the government does not expect to issue retrospective penalties should a car maker miss its science-based targets around cutting company-wide emissions. The government has also rejected suggestions that the ECG will create a two-tier market between car makers that can offer the grant and those that can not, in turn harming a car maker’s ability to hit the ZEV mandate target. Likely pre-empting that their cars will be denied access to the ECG, Chinese brands GWM, Leapmotor and MG have already announced ECG-equivalent discounts on certain EVs. “The government is confident that all manufacturers have the tools they need to comply,” said the DfT spokesperson when asked about the potential harm the ECG could do to ZEV mandate compliance. However, they didn’t address a related point that car makers denied the ECG would have to restrict sales of popular combustion-powered models in order to artificially inflate their proportion of EV sales. While no changes are expected in the short term to what was a surprise announcement for car makers last week, the ECG will be kept under review and “will evolve as the market does”, the DfT spokesperson added, and said it welcomed feedback from car makers as part of this.

main menu

Car makers can self-register EVs and get paid government grant

Loopholes in UK's new Electric Car Grant could also unnecessarily boost fleet sales

Join the debate

Add your comment

More from Autocar

Top 10s

Latest car reviews

Top manufacturers

Quick search

Legal bits

About Autocar

main menu

Car makers can self-register EVs and get paid government grant

Loopholes in UK's new Electric Car Grant could also unnecessarily boost fleet sales

Autocar Registration Block

Join the debate

Add your comment

More from Autocar

Top 10s

Latest car reviews

Top manufacturers

Quick search

We recommend

Legal bits

About Autocar