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.
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.
The amount of the grant depends on which category the vehicle is in. The six categories are:
- Cars - Please see the updated information below
- Motorcycles - the grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £1,500
- Mopeds - the grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £1,500
- Vans - Please see the updated information below
- Taxis - the grant will pay for 20% of the purchase price for these vehicles, up to a maximum of £7,500
- Large vans and trucks - Please see the updated information below
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 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
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.
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
- 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.
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.