What is the UK plug-in car grant?

UK Plug-in Car Grant offers discounts on low-emissions vehicles – read our guide to the eligible cars and how much is saved

The UK Plug-in Car Grant (PiCG) used to offer discounts on a selection of PHEVs (plug-in hybrid electric vehicles) and EVs (electric vehicles). However, reforms coming into effect on November 9 2018 will bring an end to financial support for PHEV sales, while the maximum grant for EVs will be cut from £4,500 to £3,500.

The Plug-in Car Grant provides a cash incentive that cuts the list price of the EVs on sale in the UK today in an effort to encourage people to buy one, with an ultimate aim of reducing emissions and improving air quality.

The scheme has been in place since 2011, although with the arrival of more AFVs (alternatively-fuelled vehicles) to market, the Government adjusted the PiCG in 2016 and 2018.

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The discount scheme, along with generous Benefit in Kind rates for company car buyers, has seen an increase in the number of electric vehicles for sale and being sold, and the Government has confirmed that the incentive will stay in place until at least 2020 – albeit in a reduced state.

Company car drivers can rest assured that the P11D value of a car is calculated before the Plug-in Car Grant is taken into account, so November’s change to PiCG rules will not affect the amount of Benefit-in-Kind scheme company car users will pay.

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What cars qualify for the PiCG?

If you’re looking to buy an EV or plug-in hybrid, then you’ll want to know if the car you’re buying is eligible for the PiCG, and our handy guide below will tell you exactly what kind of reduction you can expect. First, you need to know if your car falls into one of the three categories of low emissions vehicle that the Government uses to determine if a vehicle qualifies for the PiCG as follows:

  • Category 1: Vehicles with a range of 70 miles making zero emissions, and a manufacturer quoted CO2 emissions figure of less than 50g/km.
  • Category 2: Vehicles with a range of at least 10 miles making zero emissions, and a manufacturer quoted CO2 emissions figure of less than 50g/km.
  • Category 3: Vehicles with a range of at least 20 miles making zero emissions, and a manufacturer quoted CO2 emissions figure of between 50-75g/km.

If your car qualifies for Category 1, then you can benefit from the PiCG maximum, which pays 35 per cent of the car’s value, up to a maximum amount of £4,500. However, from November 9, 2018 this sum will reduce to £3,500.

Category 2 and 3 vehicles also qualify for a 35 per cent reduction, but the maximum amount saved is just £2,500, which is £2,000 less than for Category 1 cars. This will change on November 9 when Category 2 and 3 cars will cease to qualify for the PiCG.

On top of this, there’s a cap on the list prices of cars in Category 2 and Category 3. So if your car has a retail price in excess of £60,000, it does not qualify for the PiCG at all. Again, this will no longer be relevant when Category 2 and 3 cars are disqualified from the scheme on November 9.

It’s also worth noting that, while the only Category 1 vehicles at the moment are full EVs, a PHEV with CO2 emissions lower than 50g/km and capable of travelling for 70 miles on electric power could technically qualify for the PiCG. However, that technology is still a long way off and by the time you can buy a PHEV that meets those criteria, the PiCG may have ceased to exist altogether.

The objective of these changes is to encourage buyers to go for the lowest emitting vehicles, full EVs in particular, rather than just encouraging buyers to switch to save on the initial purchase price and then not use the hybrid element of their cars to help lower emissions when driving. It costs a lot more money to develop a zero-emissions EV, so they tend to have a higher purchase price than a similarly sized petrol, diesel or even hybrid vehicle in the same class. That’s why the lowest emitting cars still get the maximum PiCG afforded to them.

How do I apply for a Plug-in Car Grant?

There’s no need for buyers to do anything to ensure that the Plug-in Car Grant is applied to the car that they buy, because the dealer they’re buying from will handle all the paperwork.

The grant is deducted from the car’s list price, and the dealer does the rest. There might be some paperwork in terms of a feedback questionnaire, but that will be all that’s needed to get behind the wheel.

Cars currently eligible for the Plug-in Car Grant

This is the official list of new cars on sale that are eligible for the Plug-in Car Grants (before November 9, 2018):

Category 1 Vehicles (£4,500 grant)

  • BMW i3/i3s (including Range Extender)
  • BYD e6
  • Citroen C-Zero
  • Hyundai Ioniq Electric
  • Hyundai Kona Electric
  • Jaguar I-Pace
  • Kia Soul EV
  • Mercedes-Benz B-Class Electric Drive
  • Nissan e-NV200 5-seater and 7-seater
  • Nissan Leaf
  • Peugeot iOn
  • Renault Zoe
  • Smart fortwo electric drive
  • Smart forfour electric drive
  • Tesla Model S
  • Tesla Model X
  • Toyota Mirai
  • Volkswagen e-up!
  • Volkswagen e-Golf

The grant will pay for 35 per cent of the purchase price for these vehicles, up to a maximum of £4,500.

Category 2 Vehicles (£2,500 grant)

  • Audi A3 Sportback e-tron
  • BMW 225xe
  • BMW 330e
  • BMW 530e
  • Hyundai Ioniq PHEV
  • Kia Niro PHEV
  • Kia Optima PHEV
  • Mitsubishi Outlander PHEV (except Commercial)
  • Mercedes-Benz C350e (with 17-inch rear wheels)
  • Mercedes-Benz E350e SE
  • Mitsubishi Outlander PHEV (except Commercial)
  • Toyota Prius Plug-in
  • Volkswagen Golf GTE
  • Volkswagen Passat GTE
  • Volvo S90 T8 Twin Engine
  • Volvo V60 D5 Twin Engine
  • Volvo V60 D6 Twin Engine
  • Volvo V90 T8 Twin Engine
  • Volvo V90 T8 Twin Engine
  • Volvo XC60 T8 Twin Engine

The grant will pay for 35 per cent of the purchase price for these vehicles, up to a maximum of £2,500.

Category 3 Vehicles (£2,500 grant) 

  • Mercedes-Benz E350e AMG Line
  • MINI Countryman S E PHEV

The grant will pay for 35 per cent of the purchase price for this vehicle, up to a maximum of £2,500.

PHEVs that don’t qualify for the Plug-in Car Grant (cost more than £60,000)

  • Audi Q7 e-tron
  • BMW 740e
  • BMW i8
  • BMW X5 xDrive40e
  • Mercedes GLE 500e
  • Porsche Cayenne E-Hybrid
  • Porsche Panamera E-Hybrid
  • Range Rover P400e
  • Range Rover Sport P400e
  • Volvo XC90 T8 Twin Engine

Cars eligible for the Plug-in Car Grant after November 9, 2018Category 1 Vehicles (£3,500 grant)

  • BMW i3/i3s (including Range Extender)
  • BYD e6
  • Citroen C-Zero
  • Hyundai Ioniq Electric
  • Hyundai Kona Electric
  • Jaguar I-Pace
  • Kia Soul EV
  • Mercedes-Benz B-Class Electric Drive
  • Nissan e-NV200 5-seater and 7-seater
  • Nissan Leaf
  • Peugeot iOn
  • Renault Zoe
  • Smart fortwo electric drive
  • Smart forfour electric drive
  • Tesla Model S
  • Tesla Model X
  • Toyota Mirai
  • Volkswagen e-up!
  • Volkswagen e-Golf

The grant will pay for 35 per cent of the purchase price for these vehicles, up to a maximum of £3,500.

Let us know what you think of the plug-in car grant in the comments section below…

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