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Budget 2020 confirms continuation of grants to help EV purchase

Wed 11 March 2020 | Back to news list

The new Chancellor Rishi Sunak in his first Budget announced that the Plug-in Car grant will continue until 2022-3 and that it will be extended to vans, taxis and motorcycles for the same period. Also announced was £500m for the roll-out of a fast-charging network for EVs. Environmental campaigners were disappointed, however, that fuel duty was frozen for the tenth year in a row, even as oil prices fell sharply due to the impact of the spread of coronavirus. 
Key elements in the Budget of interest to the low carbon/emission vehicle community included:
  • Funding for Plug-in Car grant continues to 2022-3 (cost £403m)
  • Plug-in grant extended to vans, taxis & motorcycles to 2022-3 (£130m)
  • Exemption of zero emission cars from the Vehicle Excise Duty (VED) ‘expensive car' supplement
  • £500m for roll-out of fast-charging network for EVs
  • OLEV to complete a “comprehensive electric vehicle charging infrastructure review”
  • Removal of the entitlement to use red diesel from April 2022 with specific exceptions
  • £304 million “to enable local authorities to take immediate steps to reduce nitrogen dioxide emissions”
  • “The largest ever investment in English strategic roads, with over £27 billion between 2020 and 2025”
  • £4.2 billion “for five-year, integrated transport settlements for eight city regions”
  • £1 billion “to shovel-ready” road transport schemes
  • Fuel duty remains frozen for tenth successive year 
A supplement to the Budget published the following day confirmed the implications of the new support for the plug-in car, van, taxi and motorcycle grants.
It stated that starting on 12 March (2020), those making the switch to electric cars will now be eligible for a grant of up to £3,000. "As the uptake of zero-emission cars increases, a small reduction to the grant, as well as excluding cars costing £50,000 or more will allow more drivers to benefit from making the switch for longer". 
The statement said that the Government will also continue to provide grants to support the purchase of zero emission trucks and large vans (£20,000), standard vans (£8,000), taxis (£7,500) and motorbikes (£1,500) at the same rates as before.
It added that "The rates of all of the plug-in vehicle grants are subject to review over time, depending on how the market develops".
The Plug-in Car Grant scheme has been in place since 2011. The grant rate was originally set at £5,000 for all eligible ultra-low emission cars. In 2018, the grant was changed to focus on zero-emission cars (excluding plug-in hybrids). The PICG has supported the purchase of over 200,000 ULEVs of which over 100,000 are zero emission vehicles (ZEVs)
For more details, see the full Budget statement.

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