A government reduction in the plug-in car grant has been branded as ‘the wrong move at the wrong time’ by a prominent automotive business leader.

The Chief Executive of the body representing the UK car industry, the Society of Motor Manufacturers and Traders (SMMT), hit out at the surprise government move to reduce grant funding, which was announced midway through March – bang in the middle of ‘new reg’ month for UK car sales. 

Mike Hawes, SMMT Chief Executive, said the government’s approach will make it more difficult to stimulate demand while also warning the UK was ‘pursuing an entirely different path to the rest of Europe’ when it came to electric cars.

In March 2021, the government reduced the plug-in car grant, which is designed to encourage buyers into zero-emission vehicles, from £3,000 to £2,500, while the price cap for eligible vehicles was brought down from £50,000 to £35,000, prompting some manufacturers to reduce prices on their EVs to make them eligible again.

The move was criticised at the time, with Hawes calling it ‘the wrong move at the wrong time’ as the sale of new petrol and diesel vehicles will be banned in the UK from 2030 – but sales of alternatively fuelled vehicles still make up a tiny percentage of the new car market.

Hawes said: “It will become that much harder to get the allocation of [electric] vehicles into the country if we want to stimulate demand if we’re constantly on the back foot because we have a less competitive offering, so we need to see a range of support measures and incentives in place.

“We expect demand for EVs to rise pretty steeply, but even with that increase, when we get to 2030, we will not meet the total expectations that the government has to reach its climate change targets.”

In a speech, Hawes pointed to countries such as Germany and France, where incentives of up to £9,000 are available to encourage drivers to switch to zero-emission vehicles, as well as scrappage schemes to incentivise people to get rid of their older cars. 

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