U.K. Extends Subsidies for EV, PHEV Purchases

The U.K. government extends its grant program for electric and plug-in hybrid-electric vehicle purchases until at least February, while plug-in van grants will continue indefinitely.

The subsidy of 35% off the cost of all EVs and PHEVs with carbon-dioxide emissions of 75g/km or less, up to a maximum £5,000 ($7,695), had been due for review once 50,000 vehicles were sold. Popular demand for the vehicles means 50,000 deliveries will be achieved before the end of the year.

The government-backed Go Ultra Low campaign says sales of ultra-low-emissions cars grew 366% year-on-year to 9,046 units in the first quarter and were up 256% after six months, passing the 2014 full-year total with six months to spare.

The Office of Low Emission Vehicles says details about how the plug-in car grant will be structured beyond February will be announced after a government spending review in November.

Transport Minister Andrew Jones says the U.K. is Europe’s fastest-growing market for EVs and PHEVs.

“The Go Ultra Low campaign is making low emission vehicles an increasingly popular choice and the government is investing £500 million ($769.5 million) over the next five years in making them more accessible to families and businesses across the country,” Jones says in a statement.

“We will continue to invest to help make this technology affordable to everyone.”

Go Ultra Low head Hetal Shah says the U.K. has an unprecedented variety of ultra-low-emissions vehicles available, ranging from city cars and family hatchbacks to all-wheel-drive vehicles and sports cars.

Mitsubishi U.K. says the success of the government’s subsidy program has been fundamental to the early and rapid growth in the ULEV sector, and it still is too early to reduce or amend buyer incentives.

“We have seen ultra-low-emission vehicles rapidly establish a 1% share of U.K. sales in a period of time unprecedented in automotive terms,” Managing Director Lance Bradley says in a statement.

The same short timescale has seen a dramatic shift in buyer preference from all-electric vehicles to PHEVs, which now account for two-thirds of ULEV sales, Bradley says.

“Clearly the market is moving quickly and still forming. We welcome the government’s decision to continue these incentives in a way which recognizes the fledgling nature of this low-emissions market. Car manufacturers invest in new technologies on the basis of 3- to 5-year horizons for market introduction.”

The Mitsubishi Outlander PHEV leads the U.K. market with 14,000 sales since its launch and accounts for about half of all plug-in vehicle grant applications.

Eligible all-electric vans must be able to travel at least 60 miles (100 km) between charges. Plug-in hybrid-electric vehicles must have a minimum electric range of 10 miles (16 km). The vehicles must be able to reach a speed of 50 mph (80 km/h) or more under electric power.