Government to confirm reduced grants for electric cars

Rise in demand see Government grants for EVs lowered

Following a rise in the demand for electric cars, the Government are due to confirm plans to lower the discount available for prospective drivers through the plug-in grants that are currently on offer.

According to a report from The Times, buyers will only be given a £2,500 discount towards the purchase price of an electric car. This is a drop off of £500 compared to the previous £3,000 that was given to those opting for an electric car instead of a combustion engine alternative.

Perhaps the biggest change is the lowered price bracket that the grant will now be available to. Previously electric cars that had a list price of no more than £50,000 would be eligible, however, this will now drop to a maximum of £35,000.

As a result of the change, electric cars like the Tesla Model 3 and the Ford Mustang mach-e will no longer fall within this price range.

The Model 3 has been a hugely popular option for motorists in the United Kingdom, despite its £40,500 price tag. As a result of the change, anyone looking to get behind the wheel of one will be required to pay full price. 

The previous grants had made electric cars like the Model 3 a more attainable option for those looking to get ahead of the game before the 2030 ban on the sale of petrol and diesel vehicles.

The Government backing proved to be hugely popular with the British public. According to data from the Daily Mail, more than 100,000 electric cars were sold throughout 2020 – three times more than the total number sold back in 2019.

It remains to be seen what reaction this news sparks from both the British public and manufacturers within the electric car market. A recent survey suggested that the majority of Brits were in favour of the 2030 ban. However, the news of the reduced grants could dampen the positivity that had previously surrounded the change.

While it affects manufacturers like Tesla, it could be good news for the likes of the Kia E-Niro, Renault Zoe or even for those considering a Nissan Leaf lease, with more affordable electric cars potentially coming to the fore. 

Leasing an electric car is a fantastic method of embracing the change at a far more affordable monthly rate and you can do so by browsing some of our best electric car lease deals.

Speaking on the news, Matt Woodward, general manager at Carparison, said: 

"The change to electric car grants overnight has come as a huge shock to our industry but to those in the market to lease an electric car or van too. It makes the proposition of PHEV leasing more attractive to businesses and increases the appeal of fully electric lease cars below the newly set £35,000 price threshold. 

"It remains to be seen how suppliers of high value models will respond in order to remain competitive. However, we are proud to work with manufacturers who are working to maintain the value of the original grant for their new customers. And we look forward to announcing these special electric car lease deals in the coming days."

If you would like more information on our best personal electric car lease offers or business contract hire deals, contact one of our leasing experts.