Exclusive: Government won’t reinstate plug-in hybrid grants

The UK government will not reinstate a grant for the purchase of new plug-in hybrid vehicles, Jesse Norman, Minister of State for the Department for Transport, has told Autocar.

The grant was modified in October last year, with only electric vehicles qualifying for a £3500 subsidy. Previously, the subsidies for hybrid and electric vehicles ranged from £2500 to £4500, depending on the model’s zero-emissions range.

“We have to spend the tax payers’ money in a way that reflects the changing market,” said Norman. “The evidence was very clear: owners of plug-in hybrids were not plugging them in, negating the environmental benefits and undermining the incentives.

“Instead, our focus is very much on pushing battery electric vehicles. It is where we have to get to and where we can see the biggest benefits. If I look at the electric bicycle industry and how that has taken off and been opened up then I see great opportunity. Today you can buy an electric bike at Aldi for £500 – and that wasn’t the case a few years ago.

“I expect the prices of electric cars to come down dramatically in the same way and I’m not prepared to spend tax payers’ money incentivising technology that doesn’t reflect this changing market.”

Manufacturers of plug-in hybrid vehicles and the Society of Motor Manufacturers and Traders (SMMT) had vigorously campaigned for an incentive to be reintroduced, saying its withdrawal had damaged the transition to low emission vehicles. 

Last month sales of plug-in hybrids dropped 34 per cent to 1922 units, compared with 2929 last April when the incentive was still in place. While supply issues of the latest plug-in hybrids have been identified as one reason for this, SMMT chief Mike Hawes said the figures were also “evidence of the consequences of prematurely removing upfront purchase incentives before the market is ready.” 

Mitsubishi, maker of the best-selling Outlander PHEV presented evidence suggesting that UK owners of the car cover half their average weekly mileage in electric mode, substantially lessening the model’s environmental impact.

Although Norman didn’t confirm if the government’s decision had been based on data from Holland, which indicated that many plug-in hybrid cars weren’t being charged, when asked about Mitsubishi’s UK-specific data he added: “I am not prepared to look back and make retrospective changes that undermine the benefits full battery-electric vehicles can bring.”

Reports suggest the German government is on the cusp of raising its grant for full electric cars to €4000 (£3400) – a figure which must be matched by the selling manufacturer – on cars costing less than €30,000 (£26,000).