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Plug-in Grants to be subject to future cuts at no notice, says OZEV

The UK’s Plug-in Grants will be cut further in the future and likely with no notice, according to the Government.

OZEV said the Government intends to “gradually deliver a managed exit” from the plug-in grants going forwards – although other support measures will be continued

Following controversy over the changes to the grants made in March, the Department of Transport’s Office for Zero Emission Vehicles (OZEV) attended a meeting organised by the National Franchised Dealers Association (NFDA) to provide clarity around the grants.

OZEV reiterated its ongoing stance that the financial support was designed to support uptake of ultra-low and zero-emission vehicles while the market is “at an early stage” and that while the grants have been extended until 2022/23, the Government intends to “gradually deliver a managed exit” from them going forwards – although other support measures will be continued.

OZEV added that while it had been able to give notice at the end of 2018 and in March 2020 when the grants were slashed, this was due to lower uptake and it confirmed it was “unlikely to be able to provide additional notice” in the future. Both announcements had led to a large spike in orders, in particular in 2020, before the changes kicked in, and OZEV said that the “Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers”.

However, the lack of notice with the March 2021 has been much criticised already within the fleet sector, which saw complications with orders as a result.

The fleet and automotive sector has also long said that the grants need to be reliable and in for the duration in the run-up to the 2030 ICE ban.

Speaking after the March 2021 changes, Paul Hollick, chair of the Association of Fleet Professionals, said: “We’ve been saying for some time that the 2030 EV target is very much achievable for fleets but that what we need is a clear roadmap over time, especially when it comes to the fiscal basics that affect company cars such as Benefit-in-Kind, road fund licence and, in this instance, the EV grant scheme. This change has pretty much come out of the blue and doesn’t do anything to create the kind of stability that we think is needed around the whole subject of fleet adoption of EVs.”

At the NFDA meeting, OZEV also provided vehicle dealers with clarity around the latest £35,000 price cap definition, which has been causing some issues. It stated that cars must be priced below £35,000 RRP to be eligible for the grant and that the price cap definition includes “any non-standard option fitted by the manufacturer or dealer affecting the capacity of the battery, drive train configuration or maximum net power”. It also said it does not include “any non-standard option fitted by the manufacturer or dealer which does not affect the capacity of the battery, drivetrain configuration or maximum net power”.

OZEV also confirmed that in the future it’s “unlikely” to offer leeway for grant changes; following the March 2021 revisions, it had allowed dealers and manufacturers to claim at previous rates and eligibility criteria for any orders that were placed by customers in the 28 days before the grant rate change which were not logged on the portal.

Sue Robinson, NFDA chief executive, said the meeting had proved extremely useful in providing retailers with further clarity around the plug-in grant. She added: “Going forward, we will continue to work closely with OZEV to best represent our members’ interests and, in turn, provide franchised dealers with clear and timely guidance.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news.

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