New Plug-in Car Grants 2016

New Plug-in Car Grant levels come into force from 1 March 2016, with the old £5,000 blanket rate consigned to the history books.

The Office for Low Emission Vehicles (OLEV) has revealed a new tiered scheme, based on the environmental performance of the vehicle. There are now three categories, with discounts ranging from £2,500 to £4,500.

CO2 emissions and zero emission range

Under the new scheme, vehicles will be placed into categories on the basis of their CO2 emissions and their zero emission range. The new Plug-in Car Grant categories are:

  • Category 1 – CO2 emissions of less than 50g/km and a zero emission range of at least 70 miles
  • Category 2 – CO2 emissions of less than 50g/km and a zero emission range between 10 and 69 miles
  • Category 3 – CO2 emissions of 50 to 75g/km and a zero emission range of at least 20 miles

The following rates will apply:

  • Category 1 vehicles – £4,500
  • Category 2 vehicles – £2,500
  • Category 3 vehicles – £2,500

New price cap for 2016

In an effort to encourage zero emission vehicles and to maximise the number of everyday motorists who can benefit from the grants, the government has introduced a price cap for category 2 and 3 vehicles. Vehicles that cost £60,000 and above, including the Porsche Panamera S E-Hybrid and Mercedes-Benz S500 Hybrid, will no longer be eligible for the discount.

Also affected is the Volvo XC90 T8 Twin Engine, which falls into category 2 and has a list price of £60,445. With some haggling, you might be able to get the price below the cap, but to qualify for the grant, the total price, including number plates, vehicle excise duty and VAT, must be below £60,000. So go easy on the options and accessories.

Curiously, the government makes no reference to the £104,540 BMW i8 when outlining the new £60,000 cap. The i8 emits 49g/km CO2 and offers a pure electric range of 22 miles.

The government claims it “planned for a spike in grant uptake in the last few weeks of the £5,000 grant rate”, but due to higher than forecast sales it has restricted the number of grants in the final weeks before 1 March. This has led to some frustration amongst UK car buyers.

Renault Zoe

Anyone who has ordered a vehicle before 1 March, and has correctly submitted the claim for the vehicle to OLEV, will still qualify for the £5,000 grant, but the car must be delivered within nine months of when the claim was submitted. If in doubt, talk to your local dealer.

The grant will be maintained at the new levels until March 2017, or until a prescribed number of each type of vehicle has been sold. The trigger points for a further review of grant levels will be 40,000 category 1 vehicles and 45,000 category 2 and 3 vehicles. To date, 23,000 category 1 and 28,000 category 2/3 claims have been submitted.

Eligible vehicles as of 1 March 2016

Category 1 vehicles

  • BMW i3
  • BYD e6
  • Citroen C-Zero
  • Ford Focus Electric
  • Kia Soul EV
  • Mercedes-Benz B-Class Electric Drive
  • Mitsubishi i-MiEV
  • Nissan e-NV200
  • Nissan Leaf
  • Peugeot iOn
  • Renault Fluence
  • Renault Zoe
  • Smart Fortwo electric drive
  • Tesla Model S
  • Toyota Mirai
  • Volkswagen e-Up!
  • Volkswagen e-Golf

Category 2 vehicles

  • Audi A3 e-tron
  • BMW i8
  • BMW 225xe
  • BMW 330e
  • Mercedes-Benz C350e
  • Mitsubishi Outlander PHEV
  • Toyota Prius Plug-in
  • Vauxhall Ampera
  • Volkswagen Golf GTE
  • Volvo V60 D6 Plug-in Hybrid
  • Volvo XC90 T8 Twin Engine

Category 3 vehicles

  • Mercedes-Benz S500 Hybrid
  • Porsche Panamera S E-Hybrid

In other news, all ultra low emission vehicles remain eligible for the electric vehicle homecharge scheme (EVHS) grant, even if they are no longer eligible to receive the plug-in car grant because of the price cap.