Plug in Grant

The government wants to achieve net zero emissions by 2050. It also plans to bring forward a ban on the sale of new petrol and diesel vehicles to 2035 and support the uptake of battery electric vehicles. The Plug-in Grant is a crucial component in the affordability of BEVs. The Plug-in Grant directly impacts the lease cost of a vehicle for both an individual or a company.

What is the Plug-in Grant

You can get a discount on the price of brand new low-emission vehicles through a grant from the government.

You do not need to do anything if you want to buy a vehicle the value of the grant will be included in the vehicle’s price.

Plug-in Grant levels and eligibility criteria updates from 15 December 2021

The Plug-in Grant Scheme operates as follows:

Cars

Grant Rate

  • 35% of purchase price, up to £1,500
  • 35% of purchase price, up to £2,500 for cars which are converted to wheelchair accessible (subject to limits set out below) 

Eligibility Criteria

  • Cars must cost less than £32,000. This is the recommended retail price (RRP), and includes VAT and delivery fees (see Plug-in Car Grant Application Guidance
  • These vehicles have no tailpipe CO2 emissions and can travel at least 112km (70 miles)  
  • Cars which are converted to wheelchair accessible must cost less than £35,000 (subject to limits set out below). This is the recommended retail price (RRP) and includes VAT and delivery fees, and excludes conversion costs (see Plug in Car Grant Application Guidance) 
  • There is a total of 250 wheelchair accessible vehicle grants available until 31 March 2022, and a further 1,000 available between 1 April 2022 and 31 March 2023.  

 

Vans

Grant Rate

  • 35% of purchase price up to £2,500 for small vans < 2.5 tonnes gross vehicle weight (t GVW) 
  • 35% of purchase price up to £5,000 for large vans 2.5-3.5t GVW

New Eligibility Criteria

Each business, organisation or individual may receive up to 1000 grants each financial year (1 April to 31 March). Limits apply to end customers and not to lease companies. Orders placed on the portal before 07:00 on 15 December 2021 will not be counted towards this year’s limits. 

This is to ensure that the Plug in Van Grant scheme is sustainable and to ensure fair distribution of grants across stakeholders.

 

Plug-in Truck Grant (N2 and N3 Trucks)

  • 20% of purchase price, up to £16,000 for small trucks (N2, >3.5t-12t GVW). For the first 250 ordered per FY, limited to 10 per customer.
  • 20% of purchase price, up to £25,000 for large trucks (N3, >12t GVW). For the first 100 ordered per FY, limited to 5 per customer.

March 2021 is included in the allocation for FY21-22

Eligible trucks must be capable of travelling at least 96km (60 miles) without any emissions at all.

Additional notes

Order pipeline

  • Dealers/vehicle manufacturers can claim for any orders that were placed by customers in the 7 consecutive days before the grant rate change which were not logged on the portal. This means that any orders placed by customers between 00:01 on 08 December 2021 and 23:59 on 14 December 2021 before the grants rate changed that had not yet been logged on the portal will be paid at previous rates and eligibility criteria.  

Adding End Customers to the Grant Portal 

  • To monitor the Plug in Van Grant limit and ensure that grants are fairly allocated, OZEV is introducing a requirement that orders across all of the grant schemes must now include a valid ‘end customer’ when they are created on the portalWhere the order is a lease order this means the lease company’s customer not the lease company themselves. Any claims made without this information or found to contain the wrong customer details will be cancelled.  

Extension of Plug in Grant Completion Deadlines

OZEV have advised that given the current production constraints they are allowing a longer period for Plug-in Vehicle Grant orders to complete. Specifically:

  • Orders placed on the Plug in Grant Portal will have 12 months to reach ‘awaiting payment’, ‘awaiting audit’ or ‘completed’ status on the portal until further notice. Previously the period was only 9 months. 
  • OZEV will consider the approval of longer delivery timescales up to a maximum of 18 months for multi-stage build vehicle (MSBs) and wheelchair accessible vehicle orders (WAV) on a case-by-case basis and with suitable evidence provided.

Implementation

Due to the way the Plug in Grant Portal is automated, any order which does not reach ‘awaiting payment’, ‘awaiting audit’ or ‘completed’ status by the usual 9 month deadline will automatically move into ‘on hold’ status on the portal. We have previously circulated instructions to portal users on what to do to get an order reactivated so that it can be progressed.  

Instructions on progressing orders which have moved to ‘On Hold’ status:

  • Manufacturers or Dealers with orders which are likely to complete within 12 months but beyond the normal 9 month limit do not need to contact DVLA until the vehicle is ready to register and deliver. The Plug in Vehicle Grant Portal is set to automatically place orders which are not completed within the usual 9 month grant completion period to ‘On Hold’ status. These orders can be reinstated (moved to either ‘in pipeline or ‘awaiting registration’ status) provided the order is eligible for and completed within the 12 month period. Dealers should contact the DVLA when the vehicles are due to be registered. Please include the following information:
    • Order number/s
    • Expected registration and delivery dates for the vehicle
  • Please note that if DVLA reinstate an order which has not completed within the normal 9 month timeframe it will revert back to ‘On Hold’ status if it is not progressed by the dealer within 24 hours. Therefore please try to only contact DVLA immediately before you are ready to register the vehicle and provide accurate information on expected registration/delivery dates for the vehicle to help us to manage the grant as efficiently as possible.

Cancelling Orders

We will continue to automatically cancel orders which have not completed within the relevant order expiry date. Orders that have been in the system for more than 9 months (or 12 months where the extension applies) and have not reached "completed", "awaiting payment" or "awaiting audit" status will be cancelled by the portal administrators.

Comments from OZEV on Short Notice Changes to the Grant Scheme

Government has recognised the disruption no notice changes will create. OZEV has communicated the following justification to the BVRLA. This can be used by BVRLA members when communicating with your customers.

“Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers and, as signalled to industry following the March 2021 grant changes, has therefore been unable to provide notice ahead of the grant changes. When we have given the market prior notice of changes to the Plug-in Grants in the past, this has caused order spikes which are unaffordable within allocated budgets. 

Government recognises that when immediate changes are made to Grants it will mean funders and leasing companies are often not able to honour quotes given to customers for orders if the full ordering process is not complete when the grant change happens.  Whilst OZEV appreciates the disappointment this could cause for affected drivers, in the context of our responsibility to protect public funds it is unfortunately unavoidable.”   

What is the Price Cap definition?

The price cap definition means the following things must be INCLUDED in the price: 

  • VAT, including VAT reclaimable by a business
  • vehicle manufacturer or dealer’s mandatory extras including delivery charges or administration fees
  •  the battery cost (including where the battery is leased)
  •  any non-standard option fitted by the manufacturer or dealer affecting the capacity of the battery, drive train configuration or maximum net power.

Meanwhile, the following items must be EXCLUDED: 

  • any non-standard option fitted by the manufacturer or dealer which does not relate to the powertrain 
  • modifications such as ‘police packs’, ambulance/fire engine modifications  
  • modifications for disabled users 
  • warranty/Insurance and service packages etc 
  • first registration fee and cost of first licence 
  • discounts 

Where a vehicle model has a price range which is above and below £35,000 only those variants/trim levels priced below the cap will be eligible for the grant. Variants or trim levels of eligible vehicles which are priced above the price cap are not eligible for the grant.

OZEV uses two price definitions concurrently and the “price cap” definition should not be confused with the "purchase price" definition. “Purchase price” as required for the calculations across all plug-in grants is set out in OZEV Plug-in Portal Guidance this has not changed and dealers should be using this.

How to make sure an order is visible to OZEV?

In May 2021 OZEV sent out the below communication to all grant portal users. Members are encouraged to read it and ensure they and their supplier partners are familiar with the measures they suggest to ensure they minimise the impact of future grant changes.  

We are writing following the changes to the Plug in Car, Van and Truck grants announced in March 2021. This sets out our expectations on how we are likely to make changes to the plug-in grants in the future and highlights how grant portal users can manage applications to ensure that the grant is secured for the customer on all orders that they place.

The plug-in grants were designed to support uptake of ultra-low and zero emission vehicles while the market is at an early stage. As set out in government’s 2018 Road to Zero strategy, the intention is gradually to deliver a managed exit from the plug-in grants although we will continue to support uptake through other measures. Nonetheless, the grants were last year extended out until 2022/23 to continue supporting the transition to zero emission vehicles.

In the early years of the plug-in grant schemes, relatively low levels of demand meant that government was able to give advance notice of rate changes when they occurred. However, with increasing demand, a very short notice period ahead of the grant rates in March 2020 led to a very large spike in orders between the announcement and changes coming into effect. Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers. Demand has increased sharply over the past year and a notice period and associated order spike in March 2021 would not have been affordable within budgets.

As we have stated previously we will continue to keep the plug-in grants under review and ALL grants are subject to future changes. We are unlikely to be able to provide additional notice beyond this communication of our intention to make further changes to the grant in the future given the need to manage the grant budget, on behalf of taxpayers and future grant applicants.

Following the March 2021 grant change, we allowed dealers or vehicle manufacturers to claim at previous rates and eligibility criteria for any orders that were placed with them in the 28 days before the grant rate change which were not logged on the portal. We received a large number of applications for the 28-day leeway as well as enquiries about a significant number of orders which were placed before the 28-day period and are therefore not eligible to receive the grant at previous rates and eligibility criteria. We are unlikely to offer similar leeway for future grant changes.

To protect the interests of dealers, manufacturers and customers we would like to remind all portal users of the following:

  • An order is only visible to OZEV once it has been placed as an order on the Plug in Grant Portal and there is no guarantee of payment until this has been done.
  • You need to create an order on the portal as soon as you have entered into a contract to sell a grant eligible vehicle to a specific customer.
  • Once an order has been created on the portal the customer is guaranteed the grant at the level and eligibility criteria advertised at that time provided that the vehicle is registered, delivered to the customer AND the order reaches “completed”, “awaiting payment” or “awaiting audit” status on the grant portal within 9 months from the date the order is created.
  • Orders which have not reached the status “completed”, “awaiting payment” or “awaiting audit” within the 9-month period will move to ‘on hold’ status and will be cancelled.

Plug-in Grant levels and eligibility criteria updates from 18 March 2021 to 14 December 2021

Plug-in Car Grant

  • The Plug-in Car Grant rate has been reduced from £3,000 to £2,500.
  • Cars, costing £35,000 or more, will no longer be eligible to receive the Plug-in Car Grant.

The price cap definition means the following things must be INCLUDED in the price: 

  • VAT, including VAT reclaimable by a business
  • vehicle manufacturer or dealer’s mandatory extras including delivery charges or administration fees
  •  the battery cost (including where the battery is leased)
  •  any non-standard option fitted by the manufacturer or dealer affecting the capacity of the battery, drive train configuration or maximum net power.

Meanwhile, the following items must be EXCLUDED: 

  • any non-standard option fitted by the manufacturer or dealer which does not relate to the powertrain 
  • modifications such as ‘police packs’, ambulance/fire engine modifications  
  • modifications for disabled users 
  • warranty/Insurance and service packages etc 
  • first registration fee and cost of first licence 
  • discounts 

Where a vehicle model has a price range which is above and below £35,000 only those variants/trim levels priced below the cap will be eligible for the grant. Variants or trim levels of eligible vehicles which are priced above the price cap are not eligible for the grant.

OZEV uses two price definitions concurrently and the “price cap” definition should not be confused with the "purchase price" definition. “Purchase price” as required for the calculations across all plug-in grants is set out in OZEV Plug-in Portal Guidance this has not changed and dealers should be using this.

Plug-in Van Grant

  • The Plug-in Van Grant rate has been reduced from £8,000 for all vans to £3,000 for small vans and £6,000 for large vans.
  • The maximum percentage of the purchase price the grant can cover has been increased from 20% to 35%.

The plug-in van grant is:

  • 35% of purchase price up to £3,000 for small vans < 2.5 tonnes gross vehicle weight (GVW)
  • 35% of purchase price up to £6,000 for large vans 2.5-3.5t GVW

Eligible vans must have:

  • CO2 emissions of less than 50g/km

and

  • Be capable of travelling at least 96km (60 miles) without any emissions at all.

Plug-in Truck Grant (N2 and N3 Trucks)

  • 20% of purchase price, up to £16,000 for small trucks (N2, >3.5t-12t GVW). For the first 250 ordered per FY, limited to 10 per customer.
  • 20% of purchase price, up to £25,000 for large trucks (N3, >12t GVW). For the first 100 ordered per FY, limited to 5 per customer.

March 2021 is included in the allocation for FY21-22

Eligible trucks must be capable of travelling at least 96km (60 miles) without any emissions at all.

Vehicles currently in the order process

The Office for Zero Emission Vehicles (OZEV) has confirmed that it is allowing dealers and vehicle manufacturers to claim for any orders that were placed with dealers in the 28 days before 18 March 2021.

If the vehicle has been entered onto the OZEV Grant Portal, grant eligibility will still apply. If not, the onus will be on the dealer to provide evidence that the order was placed within the last 28 days. Members are advised to speak to dealers and manufacturers to see whether their vehicles are eligible.

Evidence to support claims under the 28-day leeway

Evidence of the purchase agreement with a dealer will be required to verify the validity of claims. OZEV will need a document confirming the order and containing the following information:

  • Date of sale
  • Vehicle make, model and trim
  • Number of vehicles sold
  • Dealer (relevant portal user) information
  • The details of the customer (this will be a lease company where the order is a lease order)
  • Evidence of an agreement between the two parties which confirms acceptance of the order on the date specified (eg a handwritten/digital signature or digital confirmation of order acceptance]

Verbal agreements or emails are not acceptable as evidence.