UK: Tories may axe electric car subsidies


Whilst the British government is juggling with the budget, ministers have warned the Treasury that the budget for the Plug-in Grant scheme is falling short and may demand cuts. Solutions, or ways around spending more rather, are currently being discussed.

There is good news here – plug-in car sales are rising in the UK and faster than the government expected it appears. Back in July, one plug-in car was sold every 9 minutes on the isles reportedly, more than in any other year before. So this is one reason why the budget of chancellor Philipp Hammond has come under increased pressure in recent days.

However, the Plug-In Grant scheme never had much of a budget to play with anyway. For 2018/ 19, the British government led by the Tory party had earmarked 124 million pounds with another 96 million to be spend throughout 2019 and 2020. This is not enough, warn ministers and the report by the Observer quotes insiders suggesting that cutbacks may be around the corner. These could see the Plug-In Grant allowance go down from 4,500 pounds to 3,500 GBP. Plug-in hybrids, the most favoured segment in the UK, may see the incentive cut entirely from now 2,500 GBP.

Another option currently on the table is to introduce a cap so that only electric vehicles costing up to 60,000 pounds would be eligible for the grant. This however would cut off the Jaguar I-Pace from any funding, surely a decision the British brand would not look upon favourably, particularly in light of their new found focus on e-mobility.

Back in July, the government announced its Road to Zero strategy. It aims to ban all sales of gas guzzlers by 2040 and largely ignored calls to push said target forward to 2030. In this light, it remains to be seen, how the Treasury is to tackle the looming shortage of Plug-In Grants. No comment has been issued but with Prime Minister Theresa May having declared the “end of austerity” at a Tory party meeting, it seems as good a time as ever to put the money where the mouth is.


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