Article: Electric car prices soar as axe falls on green subsidies (2018/10/07)
Thousands of pounds will be added to the price of some electric and hybrid vehicles as one of the government’s
main green initiatives falls victim to cuts, the Observer can reveal.
The Treasury is being warned that emergency funds will be needed to avoid an imminent cut in the subsidies given
to people buying plug-in cars, which some fear will dent Britain’s green credentials.
The government announced last year that it would ban all new petrol and diesel cars and vans from 2040 to reduce
the rising levels of nitrogen oxide. It followed a similar commitment in France and formed part of the government’s
green air plan. Consumers are given a discount of up to £4,500 when they buy a green vehicle that qualifies under
the “plug–in grant” scheme for low-emission vehicles. However, ministers have warned the Treasury that the tight
budget for the scheme means large cuts will have to be made.
Under current proposals, the maximum grant would fall to £3,500, while the grant of up to £2,500 for hybrid plug-in
vehicles would be abolished altogether. A cap is also being considered, which would mean only cars worth up to
£60,000 would be eligible for the scheme
This could have serious implications for Jaguar Land Rover, the UK’s biggest automotive company. The cap would
mean its luxury Jaguar I-Pace would no longer be eligible. Ralf Speth, its chief executive, said last week that it was
delaying its decision on whether to build electric cars in Britain, partly as a result of uncertainty around Brexit.
Sales of electric vehicles reached a record high in August and accounted for one in every 12 new cars purchased in
the UK. According to figures released by the Society of Motor Manufacturers and Traders last month, hybrid, plug–
in hybrid and pure electric cars made up 8% of the overall market. It represented an increase of 23% on the year
before.
