Gov to pledge £1.3 billion boost to stop EV grant cash running out
Over 35,000 drivers have already benefitted from at least £52.5 million in grants on electric cars
The government is expected to announce a big boost in funding for the Electric Car Grant as almost one tenth of the current pot has already been swallowed up just a couple of months since the scheme’s introduction.
According to the Department for Transport, over 35,000 people have so-far benefitted from the Electric Car Grant since it was introduced in July. Assuming that all of them only got the base £1,500 level of funding, this would mean that £52,500,000 has already been spent to bolster EV sales. This figure could be even higher given a small portion of eligible cars, such as the Ford Puma Gen-E, receive a larger £3,750 grant.
Even without considering cars benefiting from the extra Band 1 funding, £52.5 million still equates to over eight per cent of the total £650 million originally set aside for the scheme. While the ECG was originally projected to last until the end of March 2029, at this rate the coffers could run dry as soon as the end of 2027 or early 2028 – and that’s assuming demand for EVs doesn’t grow like it’s expected to over time.
With this in mind, the government is expected to inject an additional £1.3 billion into the scheme to help more people make the switch. This may ultimately act as a countermeasure to the pay-per-mile road tax arrangement expected to be announced in the Budget on Wednesday.
The funding boost is expected to extend the EV grant scheme beyond the maximum of 371,000 vehicles if every single car got the lower level of funding. However, it’s unknown at this stage whether the intention of this cash injection is to simply enable a greater number of people to benefit from the grant, or to widen the pool of eligible vehicles, possibly by raising the maximum price threshold.
CEO of chargepoint operator InstaVolt, Delvin Lane, said: “It’s great to see the Government stepping up investment in electric vehicles and charging. These signals genuinely move the market, and we’re already seeing the impact on driver confidence.”
However, CEO of EV advocacy group, Electric Vehicles UK, Tanya Sinclair, warned that “not every incentive needs to be fiscal. The government’s priority [should] now [be] consistency: a joined-up approach to vehicle taxation and incentives that give drivers confidence”.
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