Government says electric car subsidies will go ahead
Wed 28 July 2010
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The Transport Secretary Philip Hammond has announced that the £5,000 grant scheme for electric and ultra-low carbon cars will go ahead in 2011. The Government has confirmed £43m for the first year of the scheme and a decision on the future of the incentive beyond March 2012 will be taken early that year.
The Government says that it has agreed the announcement of this incentive ahead of the completion of the spending review to support the early market for ultra-low carbon cars. The Government says that it remains committed to reducing the UK’s budget deficit, but understands the need for certainty for investors who are taking long term decisions now on where to launch ultra low carbon vehicles and where to locate future production.
The consumer grant will reduce the up-front cost of eligible vehicles by up to 25 per cent, capped at £5,000. It will be available across the UK and will be open to both private and business fleet buyers.
Mr Hammond said that the scheme will be reviewed regularly to ensure that the UK remains competitive and taxpayers get value for money. The first review will be in January 2012, at which point the level will be set for subsequent years.
The Government also confirmed that the Plugged-In Places initiative is ongoing and that final funding will be decided in the Autumn spending review.
The LowCVP welcomed the announcement (see press release). The LowCVP Managing Director Greg Archer said: “The UK can become an early market for electric vehicles and provide support for UK automotive companies in developing opportunities and expertise in this key emerging area. This is an ideal opportunity to create the green, high-tech manufacturing jobs the UK needs.”
He added: “There is considerable uncertainty about how prices for EVs will change in the future. Given the imminent Comprehensive Spending Review it is not surprising that the Government has chosen to take a staged approach to the support it is able to offer for EV purchasing and recharging infrastructure.
“We hope that that following the planned 2012 review the Government will feel able to offer a longer term commitment that will provide added confidence to industry and encourage further inward investment.”
In their response, Greenpeace transport campaigner Vicky Wyatt said: “Electric cars are one of the ways we can cut our dependence on oil and move towards a clean, green transport system. That’s why it’s good news that the government has announced this first chunk of funding.
“But if the government is serious about putting hundreds of thousands more electric cars on Britain’s roads, it’s vital that Phillip Hammond makes a long-term commitment and stumps up the full £230 million, as promised by the previous government."
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