The government’s decision to reduce the plug-in car grant for pure EVs from £3,000 to £2,500 has drawn criticism from the UK automotive industry.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), stated that the decision is “the wrong move at the wrong time,” adding that new battery technology is more expensive than conventional engines, meaning that incentives are essential to making these vehicles affordable.

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In addition to the slash to grant amount, the government has also reduced the list price cap from £50,000 to £35,000. Changes are effective immediately.

Defending the decision, transport minister Rachel Maclean, said: “The increasing choice of new vehicles, growing demand from customers and rapidly rising number of chargepoints mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference.”

“Cutting the grant and eligibility moves the UK even further behind other markets,” said Hawes. “This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government’s ambition to be a world leader in the transition to zero emission mobility.”

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said that the decision was “extremely disappointing as it risks undermining the progress the UK has been making towards a zero-emission market”.

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She added: “Commercial vehicles keep the economy running, as the recent increase in LCV registrations demonstrates, and this reduction will have a significant impact on small businesses and sole traders.

“Sales of electrified vehicles have been performing well but they still represent a relatively small proportion of the overall market; the timing of the cut to the grant is unfortunate as a number of private customers are currently waiting for showrooms to reopen to get familiar with new types of vehicles, including EVs.

“NFDA has repeatedly highlighted that we must avoid a situation where the least well-off drivers are deterred from buying a new, low-emission vehicle when the time comes to replace their old one.”