UK ends PHEV incentive and reduces all-electric vehicle incentive, says it worked too well

The UK government announced several changes today to its Plug-In Car Grant program. They are essentially ending incentives for plug-in hybrid vehicles and they are reducing the incentive for all-electric vehicles.

In a press release, the government states that the program’s success led them to make the change:

“These changes to financial incentives reflect the ongoing success of the PICGin increasing uptake of electric vehicles, a key part of the government’s Road to Zero strategy.

The PICG has helped the plug-in hybrid market become more established, and the government will now focus its support on zero emission models like pure electric and hydrogen fuel cell cars.”

Over the last 7 years, they issued over 160,000 grants and about 100,000 of which were for plug-in hybrids.

They say that they want to now focus the money on all-electric vehicles – yet, they are also reducing the value of the incentive for those from £4,500 to £3,500.

The UK government’s Plug-In Car Grant program works based on categories with most all-electric vehicles fitting in category 1 and plug-in hybrids fitting in 2 and 3:

• Category 1 – CO₂ emissions of less than 50g/km and a zero emission range of at least 70 miles
• Category 2 – CO₂ emissions of less than 50g/km and a zero emission range between 10 and 69 miles
• Category 3 – CO₂ emissions of 50 to 75g/km and a zero emission range of at least 20 miles

With today’s changes, category 2 and 3 will not have access to incentives.

The government said that the change is going into effect on Friday, November 9th, which is likely going to result in a spike of orders. But strangely, they also state that they could implement the change sooner “if sales are higher than expected.”

Along with those changes to the program, they also announced a new grant for e-cargo bikes.

“Following the Last Mile call for evidence, and in light of evidence from other countries, a £2 million fund is planned. This will contribute 20% of the purchase price of new e-cargo bikes, up to a threshold of £5,000. Funding will be conditional on individual businesses following a code of cycle safety good practice.”

Those bikes, like the CERO One that we recently reviewed, are gaining in popularity.

The update to the Plug-in Grant program comes after the UK unveiled earlier this year an extensive new plan to go all-electric by 2040.

Electrek’s Take

I can get behind the focus on all-electric vehicles and wanting to focus the program’s funds to the least polluting vehicles, but I feel like they could have kept the same value for the incentive a little longer.

I also don’t get their warning to implement the change sooner if sales increase unexpectedly. Sales will undoubtedly increase a lot after this announcement.

This will certainly be the case for plug-in hybrids, but also for all-electric vehicles since it would be leaving £1,000 on the table.

That said, we are only talking about a month, which should result in limited volumes of available vehicles.

Either way, it is certainly better than the current efforts in the US to end EV incentives altogether.

What do you think? Let us know in the comment section below.