RAC Cars News


Green Car Buyers Could Lose Government Subsidy

By raccars Published

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The Government is reconsidering its green car grant scheme, which provides buyers of electric cars with a £5,000 subsidy, to encourage uptake of clean automotive technology. In order to avoid exhausting allocated funds, the system is to be reviewed, with fears that it could, ultimately, be phased out. The RAC Foundation believes that car buyers could rush to buy ultra low emissions vehicles upon the news, in order to avoid missing the Government grant boat, should the subsidy be revoked.

The subsidy was introduced four years ago to provoke more public interest in ultra low emissions vehicles, with 25,000 grants issued since then. As part of the review, the Government's Office for Low Emissions Vehicles will be studying the state of the automotive market and the place of electric cars within it, with the aim of continuing to supply grants at a level that encourages buyers to choose electric cars, without exhausting the available fund prematurely.

In the meantime, customers can continue to apply for the grant when they buy electric cars, and the level of subsidy which is applied will depend upon the date the claim is made - after a certain date, claims will be subject to the newly created scheme. While there have been rumours since September 2013 that the subsidy at its current level is unsustainable, Government ministers have given their assurance that support for electric car buyers would continue in one form or another until 2020.

The current scheme has come under criticism for offering nothing more than a second car subsidy for households affluent enough not to need it. However in April 2013, the Government committed to maintaining the £5,000 grant until 50,000 claims had been entered. The project was allocated funds of £200 million to make sure the scheme can be supported from 2015-2020, but the current review is mandated by the fact that the technical parameters for the scheme now include a far wider range of vehicles than was available originally.

From last month a three tier grant scheme has been in place, seeing vehicles categorised according to three different levels of emissions, with a £5,000 cap for the zero emissions range.

However, the RAC Foundation is concerned that after the review, customers who have already been put off diesel engines will find themselves also avoiding electric cars and forced to pay more than they hoped, to remain clean and green with the most efficient new petrol engines.

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