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Fleets lead the way with £5000 subsidy

Date: 21 November 2011   |   Author: Hugh Hunston

Fleet operators are leading the way in the electric car market, accounting for nearly 70% of vehicles that harnessed the Government's £5000 electric vehicle subsidy, according to the SMMT.

Of the 910 units bought up until the end of September this year, 621 were fleet vehicles. By the end of October the overall volume had grown to 993, with the Society of Motor Manufacturers and Traders confident the tally for this year will top the 1000-vehicle mark, with "upcoming new models likely to carry the momentum into next year".

The Department for Transport reported that 76% of those completing point-of-purchase surveys for qualifying cars said they were business buyers, adding that people or firms leasing eligible cars will benefit on the basis of the "up-front cost of the vehicle, on which leasing costs are calculated".

The rate of growth of fleet and retail car users accessing the green car subsidy, with a ceiling of £5000 or 25% of list price, is demonstrated by only 91 cars that would have qualified for grant funding being registered during the first 10 months of 2010.

With a £300 million budget lasting until the end of this Parliament, subject to review early next year, the scheme to stimulate demand for ultra low-carbon vehicles started at the beginning of this year and applies to cars that generate less than 75g/km CO2 and meet safety, reliability, performance and warranty standards.

A spokeswoman for the DfT said: "We see every reason for this trend to be maintained as more eligible cars come to market. They will further stimulate interest in the sector so it will grow."

Her counterpart at the SMMT commented: "This scheme covers electric, plug-in hybrid, or hydrogen fuel cell cars and the uptake marks a phenomenal rate of growth. We anticipate a doubling of suitable cars on the market next year from the current level of six models as the technology develops. It is significant that the fleet sector is so heavily involved from a purely business perspective."

Transport minister Norman Baker recently said the availability of qualifying cars, rather than the public appetite for them, was the "main challenge we face in developing the electric car market".

He added: "I have every confidence that will change in the next few months and we will begin to see sales of ultra low-carbon cars improve."

The SMMT's list of upcoming cars that will meet the subsidy remit by 2014 or at a date "to be confirmed" totals 26, from Ford's electric Focus and Vauxhall's extended-range Ampera to the Fisker Karma.

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