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Electric Car Prices Soar as Green Subsidies Come to an End

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In Britain, the price of some electric and hybrid vehicles will increase by thousands of pounds as one of the government’s green initiatives falls victim to budgetary cuts.

The government announced last year that it would ban all new petrol and diesel cars and vans from 2040 to reduce the rising levels of nitrogen oxide. Consumers were given a discount of up to £4,500 when they buy a green vehicle that qualifies under the “plug-in grant” scheme for low emission vehicles. However, ministers have warned the Treasury that the tight budget for the scheme means large cuts will have to be made.

Tight budget = less rebate

The current proposal suggests that the maximum grant would be £3,500, while the grant of £2,500 for hybrid plug-in vehicles would be abolished altogether. Also, under the new plan, only cars worth of up £60,000 would be eligible for the rebates.

Electric Vehicles Reached Record High

Sales of electric vehicles reached a record high in August, accounting for one in every 12 cars purchased in the UK with hybrid, plug-in hybrid and pure electric cars making up 8% of the overall market. This represented an increase of 23% on the year before.

Business insiders believe that the cuts could be reversed with a relatively small amount of money. The current budget for the plug-in grant programs are £124m for 2018-2019 and £96m in 2019 -2020. The dispute comes days after Theresa May used her Tory party conference speech to claim “austerity is over” and that “there are better days ahead”

Other Programs on the Cutting Block

Ministers are taking May at her word on ending austerity and are scrambling to secure money for their pet projects. It is understood that there are also concerns about the budget for universal credit. Tories at all levels of the party are worried about the transition to the new benefits system in which some families could lose out by as much as £200 a month.

[via the Gardian]

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