The Government has confirmed that its £5000 grant for plug-in hybrid cars is secure until 2015.

The grant, which offers a 25% discount up to a maximum of £5000, previously had a ring-fenced amount of funding to determine its active life, rather than a set timeline.

Transport ministers also announced that a similar discount will soon apply to vans.

A new plug-in van grant has been created offering buyers a discount of 20% up to a maximum of £8000. Manufacturers have until 31 January to register eligible vehicles for the scheme, after which the Government will carry out an assessment of available vans. The scheme is expected to go live within two months.

Vans must emit less than 75g/km CO2, be capable of at least 60 miles between charges (10 miles in electric mode for hybrids), have a top speed of at least 50mph for safety purposes and meet European Type Approval standards to qualify for the grant.

Transport minister Norman Baker said: “Electric vehicles are the arrowhead for a low-carbon revolution in motoring, and as more models come to market we’ll begin to see sales gather pace.

“Car buyers have had a year to take advantage of our grant and now it’s time for van buyers to get their chance to go electric.

“This is great news for businesses given the lower running costs of these vehicles – fleet buyers tell us that this is one of the most important factors influencing their decision on what to buy. It is radical initiatives like these which will allow us to create a transport system that both cuts carbon and is an engine for economic growth.”

Vehicle manufacturers with eligible cars and vans have reacted positively, despite the fact that the move could blunt electric van sales in the interim between the announcement and the scheme going live, while buyers hold out for the discount.

Head of electric vehicle programme at Renault UK, Andy Heiron, commented: “This addresses the big question that many customers and industry commentators have been asking us for many months and I think we can expect to see a surge in demand.”

Though equally positive about the move, the BVRLA warned that a sluggish introduction of the scheme could be problematic.

Chief executive John Lewis said: “As well as identifying which vehicles will qualify for the grant, we hope that the Government will learn the lessons from its introduction of the plug-in car grant by moving much more swiftly to clarify how the grant will be treated for VAT purposes.”

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