Don’t take electric car subsidy for granted

If you are thinking of buying an electric car, you should probably make the purchase sooner rather than later as the future of the government’s plug-in car grant hangs in the balance.

Plug-in grant

At the moment, motorists who buy a low emission car are eligible for a grant of 25% of the cost of the vehicle, up to a maximum of £5,000. But the subsidy is only guaranteed until May 2015 – and the government recently hinted that it would not be around forever.

Kick start the market

The taxpayer funded grants were introduced in January 2011 to try to close the price gap between conventional and green cars, thereby kick starting the market in cars with ultra low emissions. It has not been an unqualified success. Yes, the take-up rate has risen in recent months, but it has still been slow at just over 4,500 cars so far.

Scathing report

If that were not reason enough to scrap the scheme, a recent rather scathing report declared the grants unfit for purpose. Instead of promoting sales of emission-free cars and safeguarding the environment, the Commons Transport Select Committee concluded that taxpayers’ money was instead helping a small number of wealthy families buy a cut-price second car.

Weak demand

There is no denying that demand for electric cars remains weak. In the year to the end of August 2013, a total of 1,391,788 new cars were sold – and only 18,785 ran on alternative fuel, according to figures from the Society of Motor Manufacturers and Traders.

Range anxiety

Many people are put off electric cars by so-called range anxiety: they are worried the vehicle will run out of power before they have the opportunity to re-charge the battery. They have a point. The range of many electric vehicles is limited, making them more suitable as city runabouts. Find your nearest vehicle charging point using the interactive map above.

Extended range vehicles

But there is now a network of more than 3,000 public charging points around the country, making it easier to plug your car in if you are caught short. Technology is also improving all the time. The Nissan Leaf, for example, can cover up to 124 miles on a single charge. Or you can opt for an extended range electric vehicle, or e-rev, which uses an on-board generator to support the electric motor, extending the range to about 300 miles.

Plug-in hybrids

Then there are plug-in hybrids, which combine an electric motor with a standard petrol engine. Toyota, for example, offers a plug-in version of its popular Prius. It can travel up to 15.5 miles on the electric motor - and when the battery runs out, the petrol engine takes over. The Chevrolet Volt has a battery-powered range of 40 miles before the petrol engine kicks in. You can watch Les Roberts’s discuss the merits of the Volt here.

High prices

Price remains a barrier to many people as green cars don’t come cheap, even with the subsidy. The starting price for the Nissan Leaf is £20,990 for full car and battery ownership. But you can expect to pay about £30,000 for a Vauxhall Ampera or a Volt, including the government incentive. And it’s a bit of a catch-22 situation, as prices will only start to come down if demand goes up. Indeed, there is more than suspicion in some quarters that manufacturers inflate their prices knowing that the incentive is available. Cheap to run But don’t forget that you can offset some of the high price tag with the low running costs of a green car. It is usually cheaper to charge a battery than to fill up a tank with petrol. Plus, electric cars are exempt from vehicle excise duty, so there’s no expensive road tax to pay. And if you live in London, you don’t have to fork out for the £10-a-day congestion charge, either.

Act fast to grab a grant

The grants for low emission vehicles will not disappear overnight. But there might be less money available in future and the government could even scrap the incentive entirely. So, if you are still thinking of buying a green car, now could be the time. Do you think the government needs to do more to encourage people to drive electric cars? Or is the technology simply not up to scratch yet? Let us know in the boxes below...

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