The UK government has reduced grants for electric car buyers, slashing the maximum subsidy from £3,000 to £2,500 with immediate effect. The price cap for eligible vehicles has also been lowered from £50,000 to £35,000, prompting dismay from the automotive industry as the country seeks to transition away from fossil fuels.
The cut comes just two weeks after Chancellor Rishi Sunak extended a fuel duty freeze, effectively subsidising petrol and diesel drivers. Critics note the irony of increasing costs for zero-emission vehicles while maintaining support for fossil fuels in the same year the UK hosts the COP26 climate conference.
The government stated the changes aim to target help at less affluent buyers rather than wealthier purchasers of premium electric cars, and that reducing the grant would allow funding to last longer and assist more people. Environmental campaign group Transport & Environment described the cuts as 'inevitable and reasonable' given rising sales, but urged Treasury to reform car taxation.
Shadow minister Kerry McCarthy said the move sent 'all the wrong signals' so soon after the government announced a ban on new petrol and diesel car sales by 2035. The Society of Motor Manufacturers and Traders called it 'the wrong move at the wrong time', while the Confederation of British Industry warned against 'stunting a green recovery'.
The latest reduction follows a previous cut in March 2020 when the grant was lowered from £3,500 to £3,000 and the £50,000 cap was introduced. Since the scheme began in 2011, the maximum grant has fallen from £5,000 per vehicle.
