UK Government puts a pin in the hybrid car bubble, cancelling the plug-in car grant

For the last 7 years, the UK Government has offered a plug-in car grant – PICG – to incentivise the adoption of electric and hybrid vehicles. The scheme has been applied to 160,000 vehicles, according to official figures, offsetting the increased purchase costs for customers choosing a hybrid or electric vehicle over a conventional internal combustion engine. From 9 November, the PICG will no longer apply to hybrid vehicles (both of the conventional and plug-in variety), meaning that plug-in hybrid cars, especially, will look expensive when compared to diesel and petrol alternatives.

Plug-in hybrid models typically cost more than regular (self-charging) hybrids, because they usually have a larger battery, as well as needing the on-board charging components. It’s these plug-in hybrids that are likely to feel the greatest impact of the loss of PICG; while savings in running costs are still applicable thanks to better fuel economy, the loss of the GBP2500 grant will be felt by customers. The Government isn’t completely removing the PICG however, it’s just removing the grant for what it classes as category 2 and 3 vehicles.

Only those cars in category 1 (CO2 emissions less than 50g/km and a zero emission range of at least 70 miles) will still quality for a discount at a reduced rate of GBP3500, meaning your electric car will cost you GBP1000 more in November than it will in October. In real terms, those looking at premium models in higher price brackets probably won’t really feel this adjustment quite as keenly as those at lower prices, where the loss of the GBP2500 grant on a plug-in hybrid like the Hyundai Ioniq will see the price moving up to over GBP28,000. The Government says this is to shift the focus towards electric- and hydrogen-powered vehicles instead.

With the number of electric and hybrid models available to customers increasing, the change in the grant comes at an unfortunate time.

With policy turning away from diesel, those car manufacturers who have developed hybrid technologies now have to deal with the loss of support for these newer, cleaner, models too.

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