The UK reduces grants for electric car owners while maintaining funding for gasoline vehicles

Electric vehicles Energy

Under Chancellor Rishi Sunak, the UK government has slashed electric car grants from £3000 to £2500. The government announced these changes on Thursday,18th March 2021, saying this will allow taxpayers money to help the less able consumers instead of the wealthy buyers of premium electric cars. EV grant eligibility was also lowered from £50,000 to £35,000.

This move came as a shock to climate change advocates who have been pushing for the transition from fossil fuels to clean power. A few weeks ago, Sunak’s administration extended subsidies for internal combustion engine (ICE) cars saying that cars’ reliance as a means of transport during a pandemic is ‘still too great.’ Although EVs cost more than ICE vehicles, they are a crucial part of the UK’s ambition to reach zero-carbon levels in the next decade. European countries such as Norway, France, and Germany have given rebates to EV buyers to lower the cost of purchasing new battery-powered vehicles.

One of the government reasons to slash the grant is to ensure the funding will be eligible for a prolonged period, enabling more individuals to benefit. Rachel Maclean, the transport minister, said taxpayer’s money would “allow a greater impact at the bottom of the sector, the reason for lowered eligibility. Besides, she noted the UK administration wanted more consumers to embrace electric mobility, but sustaining the taxpayer’s costs was overwhelming. Critics of government rebates say the funds would better serve other purposes. The slashes were “unavoidable and rational given the exponential rise of revenue which is underway,” said Greg Archer, UK director of Transport & Environment, a non-profit group.

“The Transport Department cannot begin to whittle away at grants until the Treasury changes car taxes at the same time to hold car buyers involved in making a move to battery-electric cars,” Archer added. According to Kerry McCarthy, the opposition minister for green transport, this move sent all the wrong signals, seeing that the government plans to ban petrol and diesel sales by 2035. Car industry stakeholders condemned the move saying it was the wrong time for such measures.

“Slashing the plug-in vehicle grant as well as the van and the truck grant is the incorrect decision at the wrong moment. This sends the incorrect message to consumers, especially private buyers, as well as an industry that is under pressure to achieve the government’s goal of becoming a global leader in the move to zero-emission mobility,” noted Mike Hawes, Society of Motors Manufacturers and Traders chief. “It is the wrong time to stunt a green recovery by cutting the grants,” said The Confederation of British Industry.