EV government grants: all you need to know
As public knowledge of the dangers of global warming grows, governments are under increasing public pressure to do their part and decrease their carbon footprint. Since transportation has accounted for roughly a quarter of the UK's total greenhouse gas emissions (GHG) over the previous three decades, the government has implemented a number of initiatives and incentives to minimise its carbon footprint.
These measures included low/no road tax, free travel in clean zones such as London's ULEZ, funding a portion of the cost of installing electric vehicle (EV) smart charge points at residential and commercial properties, and grants to encourage motorists to purchase electric vehicles (EVs) rather than petrol/diesel vehicles.
The plug-in car grant (PiCG) was established in 2011 by the UK government's Office for Low Emission Vehicles (OLEV). Electric vehicles (EVs) are up to a third more expensive than their Petrol/diesel counterparts. To encourage people to make the switch, the government initially offered a 20% discount off the manufacturer's suggested retail price of up to £5,000 in EV government grants. Despite the subsidy, fewer than 1,000 electric vehicles were sold in 2011. This was due to a combination of factors such as a lack of options, a higher purchase price primarily due to high battery costs, a lack of charging points, range anxiety, service costs, and insurance costs.
Since then, due to factors such as lower purchase prices due to advancements in EV battery technology, more options in the EV market, lower EV maintenance and running costs, and the UK EV grant, an increasing number of people have switched to using an electric vehicle (EV). In the first five months of 2022, approximately 100,000 EVs were sold. Battery and hybrid electric vehicles now account for more than half of all new car sales, with one in every six being pure electric.
Since its introduction in 2011, the government has spent £1.4 billion subsidising the purchase of nearly 500,000 electric vehicles. As the EV market matured, the government phased out this subsidy, gradually reducing it over time and ending it entirely for most EV cars on June 14, 2022. Wheelchair-accessible vehicles, mopeds, motorcycles, taxis, small vans, large vans, small trucks, and large trucks will still be eligible for the grant.
In addition to the (PiCG) for cars, the UK government introduced the (PiVG) for vans and trucks in January 2012. The PiVG scheme has not had the same level of success as the PiCG scheme over the years. As a result, the government has renewed the plug-in van grant (PiVG) programme for another two years. Although the PiVG has not been completely phased out, it has been reduced from £8,000 for vans in 2012 to £2,500 for small vans today.
The government intends to phase out sales of gasoline/diesel vehicles entirely by 2030, and hybrid (electric plus gasoline/diesel) models by 2035. It aims to use zero-emission road vehicles by 2050, including trucks.
So far, businesses have been hesitant to switch to electric vans/trucks. This is due to a number of factors. Electric van and truck batteries take up more space, reducing cargo capacity. Another barrier is the scarcity of charging stations, as well as the charging time itself. If there is no queue at the charging point, even a fast charger takes at least half an hour to charge a battery to a reasonable level. The government recognises this issue and has pledged to install thousands of additional charging stations across the country.
What is the electric plug-in van grant (PiVG)?
The plug-in van grant (PiVG) is a UK government subsidy available to businesses and organisations to encourage them to purchase electric vans/trucks rather than traditional petrol/diesel vans/trucks.
Can I get a grant to buy an electric van/truck?
To be eligible for the plug-in van grant (PiVG), you must purchase a van or truck that meets the following OLEV criteria:
- All vans and trucks must be able to cover at least 60 miles in zero-emission mode
- All vans must produce CO2 emissions of less than 50g/km
- All trucks have CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity
- Only low/zero-emission vans/trucks approved by the UK government are eligible for the grant (see list below in this article)
What sizes of vehicles are considered small or large vans/trucks?
- Small Vans are vehicles whose gross weight is less than 2500kg
- Large Vans are vehicles whose gross weight is between 2500kg - 4250kg
- Small Trucks (N2) are vehicles whose gross weight is between 4250kg - 12000kg
- Large Trucks (N3) are vehicles whose gross weight is above 12000kg
How much is the plug-in van grant (PiVG) on electric vans/trucks?
The PiVG varies according to the size of the van/truck and is as follows:
- Small Van: 35% of the purchase price up to a maximum of £2,500
- Large Van: 35% of the purchase price up to a maximum of £5,000
- Small Truck: 20% of the purchase price up to a maximum of £16,000
- Large Truck: 20% of the purchase price up to a maximum of £25,000
Each business/organisation can apply for up to 1000 grants per tax yearly. This limit resets each tax year. This will only impact large fleets that require more than a thousand vehicles. This condition applies to all electric van and truck sizes.
Small trucks can claim up to a maximum of £16,000 grant. This is limited to the first 250 small truck grants applied nationally, with up to 10 grants available per customer. Once the quota of 250 first orders is reached or a business has applied for 10 grants, the maximum a business can claim is up to £5,000 per application.
Large trucks can claim up to a maximum of £25,000 grant. This is limited to the first 100 large truck grants applied nationally, with up to 5 grants available per customer. After that, up to a maximum of £16,000 grant is available for the following 250 applications with a cap at 10 per customer. After that, it’s up to a maximum of £5,000 per application.
How do I apply for the PiVG grant?
To simplify buying an EV and make the buyer’s life easier, the government allows dealers to apply grant discounts on eligible EVs at the point of sale and claim it back from OZEV afterwards.
Is it possible to receive the electric van/truck grant in cash?
No. The grant is applied for by the dealer and deducted from the total purchase price, so the buyer never receives the grant in cash.
Which vans/trucks are eligible for the grant?
Vehicles mentioned below are approved by the UK government and eligible for the PiVG:
- Citroën e-Berlingo
- Maxus eDeliver 3 (short wheelbase variants)
- Nissan e-NV200
- Nissan Voltia
- Peugeot e-Partner
- Renault Kangoo ZE
- Renault Zoe Van
- Toyota Proace City Electric
- Vauxhall Combo-e
- BD Auto eTraffic
- BD e-Boxer
- BD e-Ducato
- BD e-Relay
- Citroën e-Dispatch
- Citroën e-Relay
- DFSK EC35
- Fiat e-Ducato
- Fiat E-Scudo
- Ford E-Transit (Leader)
- Ford E-Transit (Trend)
- LEVC VN5
- MAN eTGE
- Maxus eDeliver 3
- Maxus eDeliver 3 LWB Chassis Cab
- Maxus eDeliver 9
- Maxus eDeliver 9 MC L3 Chassis Cab
- Maxus eDeliver 9 LC L4 Chassis Cab
- Mercedes-Benz eVito
- Mercedes-Benz eVito Premium
- Mercedes-Benz eVito Progressive
- Mercedes eSprinter
- Nextem Orca
- Peugeot e-Boxer
- Peugeot e-Expert
- Renault Master ZE (3.1 and 3.5 tonnes)
- Renault Trucks Master ZE
- Toyota Proace Electric
- Vauxhall Vivaro-e
- Volkswagen ABT e-Transporter
- LDV EV80
- FUSO eCanter
- Paneltex Z75
- Electra e-Compact
- Electra e-Star 27-350
For more information on current laws and regulations, check out our helpful tips and tricks. And for the latest company and industry news, keep an eye on the Chapter 8 Shop blog.