Drivers eligible for electric car grant

Posted on: 28 July 2010 by Mark O'haire

Motorists who buy an electric plug-in car from January 2011 will get a grant worth up to £5,000 from the government. subsidy was announced by the Labour government in 2009 but placed on hold by the Coalition until the autumn spending review.

From January, any motorist buying a new generation electric car, or ultra-low carbon hybrid, will get 25% off, up to a maximum £5,000.

However, the number of grants has been slashed from a minimum of 46,000 to as few as 8,600. The scheme has been partially ring-fenced from cuts following pressure from car makers and Britain’s green energy industry.

The extra help is not expected to make up for the extra cost of the vehicle - which could be about £10,000 more expensive than its petrol equivalent. However owners could save hundreds of pounds a year in running costs.

The subsidy will come into force at the same time as a rise in VAT. The increase from 17.5% to 20% adds almost £640 to the cost of a £30,000 car.

One possible barrier to people adopting electric cars is the lack of dedicated plug-in points - with there currently only being about 300 across the UK.

The grants will be available just in time for the UK launch of the Nissan Leaf, the first major rival to the globally successful Toyota Prius.

A full grant would cut the cost of a new Leaf from £28,350 to £23,350, according to a report in The Sun.

Once charged, the electric cars run for about 70 miles, costing just 3p a mile.

Nissan’s Sunderland factory assembles the Leaf, meaning Britain is the company’s third-biggest global electric car base. Nissan itself received grants from the Government to build the Leaf in Sunderland, where the workforce of 4,100 built 338,000 Qashqai, Note and Micra models in 2008.

The grant is open to both private and business fleet buyers across the UK. It will stay in place - assuming the money does not run out - until 31 March 2012. The level for subsequent years will be set according to how the market develops and what happens to the cost of the cars.

Will you be buying an electric car? Would you be tempted to switch?

Let us know by leaving a comment in the box below or share your thoughts with other readers in the 50connect forums.

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