UK electric car grant reinstated until March 2023

The UK government has announced it is temporarily reintroducing the Plug-in Car Grant (PiCG) due to the continuing delays in manufacturing supply chains, which include the conflict in Ukraine and the global semiconductor shortage.

The grant will be applied to all electric car orders placed between June 2022, when the grant was discontinued, and 31 March 2023. The grant has the same terms as before: £1,500 off the list-price of any electric car costing £32,000 or less, which means it only affects the lower priced electric cars will be eligible for the grant.

Before it was axed in June 2022, the PiCG supported the purchase of roughly 500,000 new electric cars in the UK. Having paid out a total of £1.4 billion in plug-in grants between 2011 and mid-2022, at the time it was withdrawn the government said it was refocusing funding towards the installation of more charging points across the UK and boosting sales of other types of electrified vehicles, such as vans, trucks, taxis, motorcycles and wheelchair accessible vehicles.

Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), was critical of the original decision to scrap the PiCG:

“The decision to scrap the grant sends the wrong message to motorists and to an industry which remains committed to the government’s Net Zero ambition. While we welcome the continued support for new electric van, taxi and adapted-vehicle buyers, we are now the only major European market to have zero up-front purchase incentives for EV buyers, yet the most ambitious plans for uptake. With the sector not yet in recovery and all manufacturers about to be mandated to sell significantly more EVs than current demand indicates, this decision comes at the worst possible time.”

Other UK government incentives for potential electric-car buyers, such as the 2% Benefit-in-Kind (BiK) company-car tax and zero road tax for all EVs, remain in place.