Plug-in Car Grant

A government grant of up to £5000 will be made to all buyers of ‘plug-in’ electric cars starting in January 2011

‘Plug-in Car Grant’ launches January 2011

The government’s incentive aimed at plug-in car buyers starts on 1st January 2011. It will provide 25% towards the cost of a new pure electric vehicle (EV), plug-in hybrid electric vehicles (PHEV), or hydrogen car, capped at £5000, and will be available to both private and fleet buyers.

The Plug-in Car Grant will be applicable directly to the buyer at the point of purchase in a similar way to that made as part of the Government's successful 'scrappage' scheme. The grant will be 25% of the car's Recommended Retail Price, up to a value of £5,000.

To be eligible for the scheme, cars will have to pass performance criteria to ensure safety, range, and ultra-low tailpipe emissions. Car buyers will qualify for the Plug-In Car Grant from an approved list of low-carbon cars.

Little initial cost to the government

The approved list is going to be pretty short when the programme starts in January 2011. Only two qualifying vehicles will actually be available – the Tesla Roadster and the Mitsubishi i-MiEV. The Tesla is a two seater electric sports car costing in the region of £100,000 which launched in the UK in summer 2009. Mitsubishi announced the price of its electric four seater vehicle in April 2010 ahead of deliveries starting in January 2011. The i-MiEV is to cost an eye-watering £38,699 which will still cost £33,699 with the help of the Plug-in Car Grant.

Both electric cars appeal to a very small segment of car buyers so the Plug-in Grant is not going to cost the government a great deal of money initially. The next available qualifying car is likely to be the Nissan Leaf, expected in March/April 2011. UK pricing has not yet been announced but the car’s marketing platform is ‘the world’s first affordable mid-range, mass-market, electric car’ so it may have a significantly greater customer appeal.