How long can fleets expect EV grants to stay on the table?
The Government has warned that it’s unlikely to give any warning ahead of future cuts to the plug-in car and van grant.
We shouldn’t be too surprised, considering it’s already happened before – with the reduction in the grant for EVs being announced this March with no prior notice and immediate effect.
But it’s hardly useful for budget planning – so what should fleets expect on the grants front over the next few years?
Bye-bye grants?
Representatives for the Office for Zero Emission Vehicles (OZEV) have said that the Government will “gradually deliver a managed exit” from EV grants, which have so far been extended until the 2022/23 financial year.
It’s likely that any fleet’s electrification will be supported through other measures, but right now it’s unclear what those will be.
But is it really bad news for fleets?
OZEV claims that the last time significant notice was given ahead of the reduction to a grant (in 2018), uptake skyrocketed as buyers became eager to take advantage of the higher level of funding.
And in response, sellers of grant-eligible vehicles increased their prices sixfold.
With less notice, there’s less likelihood of a similar rush, and less reason for prices to increase beyond reason. The most recent definition for the plug-in grant includes that vehicles must be capped below £35,000 RRP.
What about within new Clean Air Zones?
The news comes as Birmingham prepares for the new Clean Air Zone (CAZ), kicking off on 1st June 2021, including the introduction of a new grant.
Birmingham City Council is taking steps to reduce emissions in the Second City and encourage commuters to find alternative methods of transport to driving.
For taxis, vans and cars, it’ll be an £8 charge dependent on the emission status of your vehicle. Then it’s £50 per day for coaches, buses and larger vehicles commuting in and out of the CAZ.
Can you find an alternative to reduce costs?
If Birmingham features on any of your drivers’ regular routes, or they’re frequently commuting into the city centre, you’re probably wondering if there’s a solution other than budgeting extra.
Well, the City’s council has launched a brand-new vehicle scrappage and credit scheme.
Drivers who earn less than £30k a year might find themselves eligible for a £2,000 grant to put towards an eco-friendly vehicle upgrade. So long as they work at premises within the CAZ for more than 18 hours per week and they’ve been the registered driver of a non-compliant car since September 2018, they can take advantage.
The money can be used one of two ways – as a voucher to go towards a new, emissions-compliant vehicle, or as a travel card.
Which cities will have a CAZ next?
In October 2021, Bristol and London will follow Birmingham’s lead and introduce their own CAZ, and Bath’s is already operating.
Similar plans are in the pipelines in other major UK cities, like Leicester, Bradford, Manchester, Newcastle and Sheffield. So if your drivers are likely to be heading in those directions frequently, now’s probably the time to start thinking seriously about electrification.
Because who knows when the Government’s grants will end?
If you’d like help strategizing your business’s switch to compliant electric vehicles, drop us a line at [email protected].
