What you need to know about changes to the Plug-in Car Grant

Published: 13 March 2020

► Government offers £3000 incentive on EVs
► Grant to remain in place until 2023
► Cars above £50,000 aren’t covered

The UK government has been running a scheme called the Plug-in Car Grant (PiCG) to encourage the take-up of electric cars since 2011. The financial incentives arrived around the same time as the first-generation Nissan Leaf – a groundbraking electric car for being usable in an era when most electric cars were still something of a joke – and provided a £5000 cash discount off the list price of any qualifying vehicle.

The incentive was launched primarily to reduce emissions and improve air quality through increased take-up of zero-emissions vehicles (EVs and plug-in hybrid PHEVs). Since its introduction in 2011, around 200,000 cars have been bought assisted by the PiCG, but in real terms, this is still a low take-up, with UK EV sales still accounting for less than 2% of the market.

The government revised the PiCG in 2016, 2018, and again in 2020, reducing the number of cars covered by the grant as well as the amount of money offered. In 2016, the amount offered was reduced from £5000 to £4500 (or £2500 for plug-in hybrids) before reducing further in 2018, with EVs then receiving a grant of £3500. That was the point at which PHEVs were no longer eligible for the grant.

Then in the Spring 2020 Budget, this was further reduced to £3000 - and it's now been adjusted so that EVs costing more than £50,000 are no longer eligible for any subsidy whatsoever. The logic being, if you can afford a super-duper top-end EV, you probably don't need any help doing so.

Which cars qualify for the Plug-in Car Grant subsidy?

Renault Zoe - qualifies for the Plug-in Car Grant

Today it’s quite simple – all EVs that cost less than £50,000 are eligible for the grants. Originally, classifying vehicles for the plug-in car grant, the government split low-emissions vehicles into three categories: 

  • Category 1 vehicles:  A zero-emissions range of at least 70 miles, and quoted CO2 emissions of less than 50g/km.
  • Category 2 vehicles:  A zero-emissions range of at least 10 miles, and quoted CO2 emissions of less than 50g/km.
  • Category 3 vehicles:  A zero-emissions range of at least 20 miles, and quoted CO2 emissions of between 50-70g/km.

Vehicles qualifying for Category 1 are eligible for the full grant – 30% of the car’s value, up to a maximum of £3000. Though it’s not specified as such, the requirements to meet this category realistically only apply to EVs as fuel-cell powered cars are a massive rarity in the UK.

Buyers of Category 2 and 3 vehicles can get up to £500 off the cost of installing a home charger for their PHEVs through the Electric Vehicle Homecharge Scheme.

How do you claim the electric car grant?

If you purchase an eligible car, the dealer will sort out all of the paperwork and the grant will be deducted from the car’s list price. The PiCG only applies to new purchases – it’s not possible to get cash off the price of a used vehicle.

Cars that qualify for the PiCG

Further electric car reading:

Hyundai Kona Electric - qualifies for the Plug-in Car Grant

By Tom Wiltshire

Bauer Automotive staff writer; Cotswoldian, Peugeot enthusiast, SsangYong Turismo apologist