The Office for Zero Emission Vehicles (OZEV) has extended the Plug-in Car Grant (PiCG) for dealer orders by 18 months, due to the impact of supply issues on car production.
The grant, which saved customers up to £1500 on the purchase of EVs priced at less than £32,000, was axed with immediate effect earlier this year. However, it will now apply to car orders placed by dealers between 14 June 2021 and 31 March 2023, because of extended lead times.
The consumer window for the grant, meanwhile, will not be extended, the DfT has said.
“We have temporarily extended the Plug-in Vehicle Grant delivery period in recognition of the continuing delays in manufacturing supply chains, due to ongoing semiconductor shortages and the conflict in Ukraine,” the Department for Transport said in a statement sent to Autocar.
“The temporary 18-month extension covers all Plug-in Vehicle Grants logged on the system between 14 June 2021 and 31 March 2023. We will continue to work with industry and monitor issues impacting the supply chain issues.”
The grant was introduced in 2011 to encourage drivers to make the switch to cleaner, electrified powertrains. Since its introduction, the number of EV sales in the UK has risen from 1000 in 2011 to more than 137,000 in 2022 so far.
The grant has been applied to more than 500,000 electrified vehicles in total, amounting to an overall contribution of around £1.4 billion.
“By extending the Plug-in Vehicle Grant delivery period, it's allowing consumers more time to receive their orders which may have been affected by the well-documented supply constraints impacting the automotive sector,” said Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA).
“NFDA supports this decision, as franchised dealers are still battling long lead times for their orders. The delivery extension is positive, as it provides a safety net for customers to receive their electric vehicle on the grant at which they placed their order.”
The grant has been cut three times in the past two years. In 2020, it was dropped from £3500 to £3000 and applied only to cars costing less than £50,000. A further cut in 2021 had the grant plunge to £2500 for cars costing less than £35,000.
The final change before the announcement to axe the grant completely was made at the start of 2022, when the sum paid out was reduced to £1500 on cars valued at £32,000 or below.
Therefore only the most affordable electric cars, such as the Fiat 500 and MG 5 SW EV qualify for the discount.