Plug-in Car Grant reduced in Budget

  • Changes to the Plug-in Car Grant in the Spring Budget
  • Scheme extended to at least 2023
  • Amount reduced to £3,000 and capped at £50k

The Spring 2020 Budget saw changes made to the government Plug-in Car Grant. The scheme has been extended to at least 2023, but the amount offered has been reduced to £3,000, making this the third time the grant has been reduced since its introduction in 2011.

In addition to the reduction in the amount being offered, the grant has also been removed from all cars costing more than £50,000, lessening the number of cars the grant now covers. Big losers are Tesla with the Model S and X, Jaguar with the I-Pace, and Audi and Mercedes-Benz, with the E-Tron and EQC.

The grant, which has been available since 2011, was due to expire at the end of March 2020, so its extension is well-timed. The announcement that BIK has been reduced to zero on all EVs from April 2020 is expected to kick-start electric car sales, and significantly add to the 200,000 government-subsidised sales that have already taken place.

When it was launched nine years ago, the PiCG grant was £5,000, which was then reduced to £4,500 before dropping again in October 2018 to £3,500. It was unclear if the government was going to continue with the scheme beyond March 2020, so although the amount offered is now reduced, it's at least a confirmation that the government will continue to incentivise electric car sales until at least 2023.

The rates of all of the plug-in vehicle grants are 'subject to review over time, depending on how the market develops', the Department for Transport confirmed after the Budget.

What this means for you

The extension of the scheme should provide some certainty for anyone looking to buy an electric car in the coming months – there was some worry that the government could pull the plug on the scheme. However, the budget confirmed that people will be encouraged to buy more EVs, and this scheme is part of that.

The removal of the grant for more expensive EVs is a blow, especially for British car company Jaguar, which only offers one model and it's priced above the £50,000 cut-off. But the continued support from the government should be seen as a positive move for anyone looking to move to electric.

Further reading

>> Electric cars on Parkers

>> The Plug-in Car Grant: all the details

>> The cheapest electric cars to buy

Renault Zoe (2020) being charged up