RAC Cars News


Electric car grant fund cut back

By raccars Published

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A senior civil servant responsible for the Office for Low Emission Vehicles has admitted that official Government forecasts for the sale of electric cars are 'wildly optimistic'. Richard Bruce revealed that the figures were based on miscalculations by car companies, who overestimated their ability to sell electric models. This led the Government to predict a much greater demand for green cars than has so far materialised. The predictions of a larger demand were a key factor in the Government setting up a £400 million fund, to provide motorists with grants of £5,000 against the purchase price of an electric car. That fund has now been reduced to £230 million, reflecting the lower level of electric car sales.

It is thought that early sales of electric cars suffered due to the relatively limited variety of models available. Electric cars have tended to be small city cars and perhaps not ideal for large families and those needing lots of luggage space. Certainly that situation is improving, as more models come on to the market aimed a different motoring sectors. Mr Bruce also felt that the media has been hostile to electric cars and added that 'range anxiety’ was still a major factor, despite some improvement in battery life and an increasing network of charging points across the country.

Mr Bruce’s comments were published on the Civil Service Quarterly blog, where he said: "Initial projections and budgeting were based on the car companies’ estimates of how many units they would sell, which turned out to be wildly optimistic. There are other issues as well. For the first few years, very few cars were available. If you wanted to buy an estate to fit the dogs in the back, or a sports utility vehicle you had to buy a petrol or diesel car. That’s now changing, with manufacturers bringing a wider range of vehicles to market."

Although sales have been disappointing, they are increasing and six times more subsidies were claimed in January 2014 compared with a year earlier. RAC Foundation director, Stephen Glaister, denied the media were to blame for low sales and argued: "Only one thing will lead to a mass market for the greenest cars: a competitive price. At the right price anything can be sold. But most consumers calculate that even with the subsidies on offer these vehicles do not currently make economic sense. This is not the fault of the media. Ultimately, what is needed is a big leap in battery technology, to increase range and reduce manufacturing costs. That is not yet in sight."

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