The cost of plug-in hybrid cars could rise by up to £2,500 if government subsidies are cut, according to a report in the Observer newspaper. This would be despite last year’s announcement that the government intends to ban the sale of new petrol and diesel vehicles from 2040 to reduce levels of harmful nitrogen-oxide pollution.
Currently, government incentives pay a maximum of £4,500 towards EV and plug-in hybrid models that emit less than 50g/km of CO2 and have a zero-emission (ZE) range of more than 70 miles (Category 1). Models that emit less than 50g/km and have a ZE range of 10-69 miles (Category 2) and vehicles emitting 50-75g/km with a ZE range of 20 miles or more (Category 3) qualify for a £2,500 grant. Meanwhile, cars costing over £60,000 in the latter two categories are exempt from subsidies.
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Rumours suggest the Treasury will need to find “emergency funds” to avoid reducing these subsidies, potentially harming Britain’s geen ambitions. The maximum grant for Category 1 cars like the Nissan Leaf, Renault Zoe, Hyundai Ioniq Electric and BMW i3 could fall to £3,500, while the £2,500 grant for plug-in hybrids may be abolished entirely. The government could also introduce a cap making any vehicle costing over £60,000 ineligible for the grant, removing Tesla’s current UK model line-up and the British-built Jaguar I-Pace from the list.
While the sale of diesel models has markedly decreased during 2018, now making up just 29% of cars sold, sales of alternatively fuelled vehicles (AFVs) including electric and hybrid models have surged to 114,574 so far in 2018 – around 20,000 more than the same time last year. AFVs now account for roughly one in 12 cars sold.
According to the Observer, insiders within the government’s business department believed the cuts could “be reversed with a relatively small amount of money.” Budgets for the plug-in car grant are currently £124m for 2018-19 and £96m for 2019-20.
A spokesperson for Department for Transport said: “The Road to Zero Strategy sets out a clear path for the country to be a world leader in the clean transport revolution, including continuing to ensure the tax system incentivises the purchase of the cleanest vehicles.
“We have already supported the purchase of more than 150,000 ultra-low-emission vehicles and offer a range of infrastructure incentives as part of our nearly £1.5bn investment to support the transition to zero-emission vehicles. We will continue the plug-in grant until at least 2020, and keep the rates under constant review.”
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