The government has closed its subsidy scheme for the purchase of electric cars and said some of the funding will be diverted to boost investment in the public chargepoint network.
The Department for Transport (DfT) announced on Tuesday (14 June) that the plug-in car grant scheme is being closed for new orders.
The government had previously said the grants would be available until the current financial year.
In Tuesday’s announcement, the DfT said the electric car market has matured to point where almost 100,000 such vehicles were sold in the first five months of this year alone, compared to fewer than 1,000 in the whole of 2011 when the scheme was launched.
Pure and hybrid EVs now make up more than half of all new cars sold in the UK, the department said.
And fully electric car sales have risen by 70% in the last year, according to the DfT, now making up one-in-six new cars joining UK roads.
The department added that previous reductions, both in the size of grants available through the scheme and the range of models they can be used for, have had “little effect” on the accelerating pace of electric car sales.
According to an evaluation carried out for the government, the plug-in grant scheme had a big impact on initially stimulating demand for electric cars but that has now largely worn off.
The government said funding for the plug-in car grants would be refocused on supporting the sales of other types of EVs and expanding the public chargepoint network.
Around £300 million in grant funding will be refocused towards extending grants to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles.
Transport minister Trudy Harrison said: “Government funding must always be invested where it has the highest impact if that (EV) success story is to continue.
“Having successfully kickstarted the electric car market, we now want to use plug-in grants to match that success across other vehicle types, from taxis to delivery vans and everything in between, to help make the switch to zero emission travel cheaper and easier.”
Since the scheme’s inception in 2011, more than £1.4 billion of grants has been paid out to support the purchase of nearly half a million EVs.
The value of the plug-in grants have fallen from £4,500 four years ago to £1,500 now.
James Court, CEO of Electric Vehicle Association England, expressed disappointment that the grants had been withdrawn before EVs reach price parity with combustion engine vehicles.
“The end of the plug-in grant was signalled last year, but we hoped for a Treasury reprieve during a cost-of-living crisis, with EVs offering consumers a way of insulating themselves against sky high petrol and diesel costs.”
Claire Miller, director of technology and innovation at Octopus Electric Vehicles, said: “It would be difficult to underplay the significance of the plug-in car grant. When the scheme started, you could fit the annual registration of electric cars in your local car park – today we’re seeing hundreds of thousands sold in just the first half of the year. Drivers are waking up to the benefits of making the switch to an EV and we’re seeing demand soar.”