The Department for Transport (DfT) is cutting subsidies available for customers purchasing plug-in hybrid vehicles, as the government looks to shift consumer focus towards pure electric models instead.
Changes to the Plug-in Car Grant (PICG) mean that the grant rate for Category 1 (pure electric) vehicles will be cut from £4,500 to £3,500 and Category 2 and 3 (hybrid) vehicles will no longer be eligible for the grant.
NEW PLUG-IN hybrid cars will no longer be eligible for a £2,500 government grant from November 12, as part of reforms to incentives for ultra-low emission vehicles.
Motoring groups heavily criticized the cuts, stating that the lowering, as well as wholly cutting of the subsidies would undermine one of the few parts of the automobile market, which is now growing healthily.
At the same time, buyers of zero-emission electric and hydrogen-powered cars, such as the Nissan Leaf and Toyota Mirai, will see their grants fall by £1,000 to £3,500.
It also added that plug-in hybrid vehicles will continue to receive support through lower auto tax rates, grants for charging infrastructure and local incentives.
From November 12 motorists looking to buy a low and zero emissions hybrid and electric auto will be ineligible to receive the current £2,500 and £4,500 grants respectively.
Industry body the Society of motor Manufacturers & Traders led the criticism, arguing that the move would have far-reaching consequences for consumers, the environment and industry.
Doubts over the future the plug-in vehicle grant were first raised by HonestJohn.co.uk in May 2018, when a freedom of information request on the scheme's funding was flatly rejected by the Department for Transport.
By way of consolation, the government statement says "These vehicles will continue to receive support through lower auto tax rates, grants for charging infrastructure and local incentives (such as free parking)".
The surprise announcement led to accusations that the government was undermining the campaign to cut roadside emissions and get drivers out of petrol and diesel cars. In a statement, the transport ministry said the cuts were a reaction to falling prices for electrified vehicles, and would help the budget focus more on the cleanest vehicles now available.
"Prematurely removing up-front purchase grants can have a devastating impact on demand - without world-class incentives, government's world-class ambitions will not be delivered", said Mike Hawes, chief executive of the SMMT.
Lyes told the BBC that the cuts signalled "a major blow to anyone hoping to go green with their next vehicle choice".
The government is to stop subsidising buyers of new plug-in hybrid cars, while the grant available for zero-emission electric cars is set to fall.
He added: "With up-front costs still a huge barrier for those hoping to switch to an electric vehicle, this move from the government is a big step backwards and is in stark contrast to countries like Norway where generous tax incentives have meant that it has one of the highest ownership levels of ultra-low-emission vehicles of anywhere in the world".