Consumer incentive scheme

Government confirms £5,000 Plug-in Car Grant for electric car buyers

The coalition government has confirmed that it will pay an incentive of £5,000 to car buyers when they purchase a pure electric or plug-in hybrid electric vehicle.

The Plug-in Car Grant will reduce the retail price of eligible vehicles by 25 per cent, capped at £5,000, which effectively means that all electric and plug-in hybrid cars will qualify for the full £5,000 payment. It will come into effect on 1st January, 2011.

Buyers will now be much more likely to be tempted into one of these ultra-low carbon cars if they are paying £5,000 less than the retail price. In the case of the all-electric Nissan Leaf, for example, which launches in the UK in February 2011, it means that the retail price will reduce from £28,990 to £23,990 – a much more attractive purchase proposition. It brings the Leaf into hybrid Toyota Prius territory – at just £3,725 more than the Prius, the Leaf offers zero emissions and much lower running costs.

Announcing the price some months ahead of launch, means that potential electric car buyers can make their purchase decision based on a long gestation period when they can weigh up all the pros and cons of electric cars. As soon as the government confirmed the buyer subsidy, Nissan announced the retail price of the electric Leaf and will start to take orders in September for delivery after the February 2011 launch date.