Grant scheme for EVs approved

Manufacturers are fast-tracking the launch of their electric vehicles after the government confirmed it will go ahead with a grant scheme that'll give buyers discounts of up to £5,000 on low-carbon vehicles.

Today the Conservative/Liberal Democrat coalition government confirmed it would introduce the much-celebrated Plug-In Grant for buyers of plug-in electric, plug-in hybrids and hydrogen vehicles.

Under the scheme, which offers a discount of 25% or a £5,000 maximum, the new Nissan Leaf, for example, would cost £23,000 rather than the £28,000 purchase price without the grant.

In the original proposal set out by the Labour government in 2009, £250 million had been set aside for the scheme that was due to last five years.

That money also included money for electric plug-in infrastructure but under the plan announced today only £43 million has been set aside for scheme, which is only planned to last until March 31 2012. As a result manufacturers are putting forward the launches of their planned electric vehicles to meet expected demand. 

Production for the Leaf will start in 2013 at Nissan's Sunderland plant, but the firm will be shipping in Japan-built Leafs to the UK throughout 2011. Peugeot is set to do the same with its iOn electric car. 

Just after the election in May there had been fears that the coalition government might ditch the idea as it sought to balance the country's books.

A spokesman for the Society of Motor Manufacturers and Traders, told Parker's: 'Every government department has had its budgets slashed, so we were delighted. It would have been a real kick in the teeth if it had been axed.'

The £43 million funding will pay exclusively for the grants - the SMMT says it expects around £8,500 cars that qualify for the grant to be sold in 2011. It also said the scheme would be reviewed by the government in 2012 and a spokesman added: 'It may be that more cash will be made available for this scheme.'

Leading sources within the industry told Parker's that if orders are taken before the grant runs out, then these should still qualify just like the government-backed Scrappage Scheme that ran from May 2009 to March 2010.

*Cars likely to be on the government grant list: 

Chevrolet Volt            Due Spring 2012

Vauxhall Ampera        Due Early 2012

Nissan Leaf               Due March 2011

Renault Fluence        Due Summer 2012

Peugeot iOn             Due Autumn 2010

Mitsubishi i-MiEV     Due Early 2011

Citroen C-Zero          Due Early 2011