After the cuts to the subsidy programme had been announced last October, now Jesse Norman, minister of state for the department for transport has confirmed that the grant will not be reinstated.
The updated grants last year had ensured that only fully electric vehicles would qualify for the £3500 subsidy. Prior to that, the grants had ranged from £2500 to £4500 with regards to the vehicles electric range.
The reasons for the update were not entirely clarified, but there are a few that may have led to the decision. Officially, the government said that the decision reflected the technological progression on the marketplace, as well as consumer demand: “We have to spend the tax payers’ money in a way that reflects the changing market,” said Norman. “The evidence was very clear: owners of plug-in hybrids were not plugging them in, negating the environmental benefits and undermining the incentives.”
Norman’s second point, referring to a study in the Netherlands, which had revealed that many PHEV owners were not charging the electrical components in the car, and simply relying on the combustion motor, while still benefiting from environmental policies without contributing. It is not clear whether the decision was made based on the data, or the data was used to justify the decision, however.
An exhaustive campaign was launched by manufacturers of plug-in hybrids to ensure that the grant would be reinstated, with the Society of Motor Manufacturers and Traders (SMMT) campaigning on the issue that the measure would damage the industry, and Mitsubishi offered data that the drivers of their PHEVs covered half of their weekly driving habits electrically.
The government response was rather unimpressed, however: “I’m not prepared to look back and make retrospective changes that undermine the benefits full battery electric vehicles can bring.” He also holds faith that the market will regulate itself on the matter: “I expect the prices of electric cars to come down dramatically in the same way, and I’m not prepared to spend taxpayers’ money incentivising technology that doesn’t reflect this changing market,” Norman said, referring to the development of electric bicycles when hoping for the same market development.