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BVRLA: £5000 EV grant to run dry during 2016

Date: 23 January 2015   |   Author: Daniel Puddicombe

The British Vehicle Rental and Leasing Association believes the Government's plug-in car grant of £200m will be exhausted by the middle of next year.

That's according to the body's chief executive Gerry Keaney, who says that despite falling oil prices, ultra low-emission vehicles will exceed the number of plug-in grants still left in the pot, which breached the 10,000 barrier in 2014.

In November 2014 alone, the Department for Transport awarded £10.8m in grants to car makers, including £4.9m to Mitsubishi, £4.2m to Nissan and £575,000 to BMW.

Keaney was unsure if the volume of EV sales will reach a point where the grant would no longer be required, but suggested in-life incentives such as free parking, subsidised toll or congestion charges, and the use of so-called green lanes in congested areas should be used to maintain growth.

Nissan's electric vehicle manager, Paul O'Neill wouldn't comment on whether Nissan would subsidise the price of its EVs if the grant disappeared, but said he believes the market will increase. "Nissan is confident that the UK electric vehicle market still has plenty of room to grow and the array of new models being launched in the sector will only serve to raise the profile of all-electric driving further," he said.

Nissan, the market-leader in electric cars, believes it isn't just the plug-in car grant, which reduces the amount a buyer has to pay by up to £5000 per car and £8000 per van, that's prompting motorists to consider the new technology.

"Significantly lower fuel costs, improving infrastructure and the unique driving experience associated with all-electric vehicles are also driving people to make the switch," he said.

O'Neill added: "Acceptance and understanding of the benefits of EVs is growing all the time, and while it is probably too soon to talk of a 'tipping point' or a 'critical mass' [leading to the grant no longer being needed], the market is definitely increasing at a very healthy rate fuelled by existing models. The market is constantly evolving and we anticipate that available schemes will evolve with it."

The DfT said one in every 78 cars sold in December was a ULEV, and sales of ULEVs were four times higher in 2014 than in 2013.

Despite the increased popularity of EVs, the RAC Foundation found that two-thirds of London's electric car charging points are unused from month to month. The Freedom of Information request made by the RAC Foundation to Transport for London, found that of the 905 units in the capital, 324 were used in June 2014.