The British government will offer discounts worth up to £3,750 (R90,000) to buyers of electric cars priced at £37,000 or below, it said on Monday, under a new scheme that aims to better align consumer demand with net zero emissions targets.
The government will spend £650m on the discount scheme, which will be available from Wednesday to consumers once carmakers sign up for the scheme.
As part of a wider goal of achieving net-zero greenhouse gas emissions by 2050, Britain wants to phase out sales of new petrol and diesel cars by 2030. But demand for electric vehicles (EVs) has stalled with consumers citing high upfront costs as the main barrier.
“This EV grant will not only allow people to keep more of their hard-earned money — it’ll help our automotive sector seize one of the biggest opportunities of the 21st century,” transport secretary Heidi Alexander said.
The scheme follows calls from the automotive industry for EV incentives as carmakers effectively need to sell more EVs each year to meet emissions targets, or pay fines.
Britain scrapped a previous incentive scheme for EV purchases in 2022 as the then-Conservative government shifted focus to spending on expanding the public charging network.
A number of European countries, including Norway — which has the highest percentage of electric cars in Europe — as well as France and Germany, offer incentives for EV buyers including subsidies and exemption from taxes.
The British government in April relaxed some of the EV sales targets for carmakers, as the industry coped with new tariffs on sales to the US, its second-largest market after the EU.
Ginny Buckley, CEO of advice website Electrifying.com, said nearly one in two electric models would be cheaper thanks to the “long overdue” incentives.
The government said the £650m funding for the Electric Car Grant would be available until 2028/29.
By contrast, carmakers had spent about £6.5bn on electric car discounts since the government’s EV sales targets were introduced at the start of 2024, Society of Motor Manufacturers and Traders CEO Mike Hawes told reporters last month.
Hawes welcomed the new grant on Monday, saying it was a “clear signal” that now was the time for drivers to switch to an electric car.
Reuters
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