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Plug-in Grant Update

Plug-in Grant Update
29/01/2022

At 07.00am on 15 December 2021, the Government announced an immediate change to the rates and eligibility criteria for the Plug-in Car Grant and the Plug-in Van Grant.

These include:

  • The Plug-in Car Grant has been cut from £2,500 to £1,500 and now excludes models that cost more than £32,000.
  • The Plug-in Car Grant will remain at £2,500 – and £35,000 – for vehicles converted to wheelchair accessible (subject to limits).
  • The Plug-in Van Grant has been cut to a maximum of £2,500 for small vans (< 2.5 tonnes gross vehicle weight) and £5,000 for large vans (2.5t-3.5t GVW).
  • Each business, organisation or individual may receive up to 1,000 Plug-in Van Grants each financial year (1 April to 31 March). Limits apply to end customers and not to lease companies. - - There are no changes to grant rates for vehicles over 3.5 tonnes.
  • The new terms apply from 07:00am Wednesday 15 December 2021.

The guidance on the gov.uk website will be updated to reflect the new grant rates and eligibility criteria. A revised list of vehicles which are now eligible for the grants will be available after 12 noon today (15 December 2021) here.

Government has recognised the disruption no notice changes will create. OZEV has communicated the following justification to the BVRLA. This can be used by BVRLA members when communicating with your customers.

“Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers and, as signalled to industry following the March 2021 grant changes, has therefore been unable to provide notice ahead of the grant changes. When we have given the market prior notice of changes to the Plug-in Grants in the past, this has caused order spikes which are unaffordable within allocated budgets.

"Government recognises that when immediate changes are made to Grants it will mean funders and leasing companies are often not able to honour quotes given to customers for orders if the full ordering process is not complete when the grant change happens. Whilst OZEV appreciates the disappointment this could cause for affected drivers, in the context of our responsibility to protect public funds it is unfortunately unavoidable.”

Order pipeline

Dealers/vehicle manufacturers can claim for any orders that were placed by customers in the seven consecutive days before the grant rate change which were not logged on the portal. This means that any orders placed by customers between 00:01 on 08 December 2021 and 23:59 on 14 December 2021 before the grants rate changed that had not yet been logged on the portal will be paid at previous rates and eligibility criteria.

Adding End Customers to the Grant Portal

To monitor the Plug-in Van Grant limit and ensure that grants are fairly allocated, OZEV is introducing a requirement that orders across all of the grant schemes must now include a valid ‘end customer’ when they are created on the portal. Where the order is a lease order this means the lease company’s customer not the lease company themselves. Any claims made without this information or found to contain the wrong customer details will be cancelled.

BVRLA comment

Commenting on today’s announcement, BVRLA Chief Executive Gerry Keaney said:

“While we’ve seen high levels of uptake within the car market, the situation is not the same for electric vans. The disparity across the industry means that sweeping solutions are not suitable.

“Incentives have had a positive impact to date but there is more to be done. It is disappointing to see support declining when cost remains a crucial stumbling block.

“There remain many barriers that are slowing down the mass transition to electric vans. Today’s news increases those challenges and will delay the uptake of electric vans. This is particularly the case for SMEs, where the lack of price parity between ICE vehicles and electric alternatives makes it hard to create a realistic business case to make the switch.

“For the move towards electric vans to gain momentum, more support and incentives are essential, now is not the time to remove or reduce them.

“We are calling on the Government to provide more support around commercial vehicles, including an extension of the Plug-in Van Grant beyond the current 2022/2023 end date.”

Today’s Plug-in Grant changes in detail:

Plug-in Car Grant From To Grant Rate - 35% of purchase price, up to £2,500 - 35% of purchase price, up to £1,500 - 35% of purchase price, up to £2,500 for cars which are converted to wheelchair accessible (subject to limits set out below). Eligibility Criteria - Cars must cost less than £35,000. This is the recommended retail price (RRP) inclusive of VAT and delivery fees - These vehicles have CO2 emission of less than 50g/km and can travel at least 112km (70 miles) without any emissions at all. - Cars must cost less than £32,000. This is the recommended retail price (RRP), and includes VAT and delivery fees - These vehicles have no tailpipe CO2 emissions and can travel at least 112km (70 miles). - Cars which are converted to wheelchair accessible must cost less than £35,000 (subject to limits set out below). This is the recommended retail price (RRP) and includes VAT and delivery fees, and excludes conversion costs (see Plug in Car Grant Application Guidance). - There is a total of 250 wheelchair accessible vehicle grants available until 31 March 2022, and a further 1,000 available between 1 April 2022 and 31 March 2023

Plug-in Van Grant (N1/Light Commercial Vehicles) From To Grant Rate - 35% of purchase price up to £3,000 for small vans < 2.5 tonnes gross vehicle weight (t GVW). - 35% of purchase price up to £6,000 for large vans 2.5-3.5t GVW. - 35% of purchase price up to £2,500 for small vans < 2.5 tonnes gross vehicle weight (t GVW). - 35% of purchase price up to £5,000 for large vans 2.5-3.5t GVW. New Eligibility Criteria Each business, organisation or individual may receive up to 1000 grants each financial year (1 April to 31 March). Limits apply to end customers and not to lease companies. Orders placed on the portal before 07:00 on 15 December 2021 will not be counted towards this year’s limits. This is to ensure that the Plug-in Van Grant scheme is sustainable and to ensure fair distribution of grants across stakeholders.

For more information on  Plug-in Grant Update  talk to  First Vehicle Finance

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