Introduced in 2010 by the Office for Low Emission Vehicles (OLEV), the plug-in car grant scheme offers motorists up to £5,000 toward the cost of new, low-emission electric cars. The scheme was originally intended to remain active until 50,000 new electric vehicles had been sold. However, 2014 saw a marked increase in the sale of electric vehicles—nearing a collective total of 40,000—which prompted OLEV to extend the scheme which the Government plans to continue until 2018. To support the extended scheme, an additional £200 million has been allocated.

The extension emphasises both the government’s support of ultra-low-emission vehicles (ULEV) as well as the public’s desire for more environmentally friendly forms of transport. While interest in ULEV by the British public is still a niche market—making up only 1 per cent of UK sales—the scheme should inspire optimism for the motor trade. Based on current trends and the state of the market, sales of new ULEVs should remain consistent for the next three to five years.

If this industry prediction is accurate—even by half—the motor trade industry will surely benefit from this trend via higher sales and increased government support for the fledgling low-emission market. And, the motor trade industry recognised that by officially welcoming the government’s decision to extend the scheme.

Despite widespread support, the sector is still pushing for the government to adopt a more uniform approach to emission control. According to some industry insiders, the decision to extend the plug-in grant scheme is inconsistent with the government’s recent increase to the vehicle excise duty for certain low-emission vehicles.

To learn more about the plug-in car grant scheme, visit www.gov.uk/plug-in-car-van-grants/overview , or if you would like more information on car or fleet vehicle insurance offered by SIB, contact us on 01132500377