Tips and Advice

Plug-in car grant: a complete guide

The PiCG has been extended until 2022/23 but is now less than it was before

Mazda MX-30 charging

The Government’s Plug-in Car Grant (PiCG) was established to make low-emission and electric cars more appealing and affordable. It aims to get more people to buy these vehicles to help cut down on local pollution and the UK’s overall CO2 emissions. Manufacturers spend a lot of money developing electrified cars and the battery tech they use, which is why they tend to cost much more than equivalent petrol cars.

The Government has revised the terms of the PiCG several times since it was introduced in 2011 to keep pace with developing technology; it’s now effectively only available for fully electric cars. The latest changes were announced in the 2020 Spring Budget, reducing the maximum grant to £3,000 (or 35% of the car’s value, whichever is lower). Better news was that the grant has been extended until the 2022/23 financial year. Originally, it was set to be scrapped at the end of March 2020.

Best electric cars to buy now

While EVs are expensive, the PiCG represents a substantial discount, and there are of course further cost-saving benefits once you’ve bought an electric car. VED (road tax) is free for private buyers (as it is for company-car users from April 2020), and recharging costs considerably less than paying for petrol or diesel. You won’t have to pay to enter any low-emission zones either.

The latest adjustment means that electric cars costing more than £50,000 are no longer eligible for the grant, so models like the Tesla Model S and Audi e-tron are now essentially £3,500 more expensive than they were previously (the previous value of the PiCG). Some cars straddle the £50,000 threshold, so only the cheaper models will get the discount. Electric vans, taxis and motorcycles are also eligible for grants.

Plug-in hybrids have not been eligible for the PiCG since 2018. We should point out that the grant doesn’t specifically exclude hybrid vehicles, but no hybrid vehicles currently meet the criteria. By the time any do qualify, it’s likely that the PiCG will have been withdrawn. The Government puts EVs and hybrids into three categories, with only cars in Category 1 (and under £50,000) eligible for the £3,000 grant.

Category 1 (eligible for the PiCG): 70+ miles of electric range, CO2 emissions under 50g/kmCategory 2: 10+ miles of electric range, CO2 emissions under 50g/kmCategory 3: 20+ miles of electric range, CO2 emissions between 50-75g/km

However, if your car falls into Category 2 or 3 it’s eligible for a home-charging grant. This subsidy, called the Electric Vehicle Homecharge Scheme, means that the Government will pay for a charger to be fitted at your address. It’s worth up to £500, so still represents a hefty saving if you are looking at plug-in hybrid cars.

In 2011, the grant was introduced to encourage more people to buy eco-friendly vehicles. Until 2016, you could save up to £5,000 on an electrified car, but then the grant for these cars was reduced to £4,500. Cars that could run on electric power for 10 miles or more were eligible for a grant of up to £2,500. The EV grant was then reduced to £3,500 in 2018.

The Tesla Model S was designed from the ground up as an all-electric family hatchback

You don’t need to apply for a PiCG, as the manufacturers will have done that for you. Dealers will then reduce the price accordingly, so the grant applies regardless of whether you buy your electric car outright or on finance. You may also hear this grant being referred to as the OLEV grant - OLEV is a governmental body and the acronym stands for Office for Low Emission Vehicles.

What is a PHEV?

A few of these cars have ‘PHEV’ at the end, and these letters stand for Plug-in Hybrid Electric Vehicle. In other words, it’s a car that has a petrol or diesel engine alongside a battery pack that is recharged when plugged into the mains. Most, if not all, manufacturers offer a wall charger that can be installed at your home. These wall chargers are much more powerful than your standard electricity sockets - it would take significantly longer to recharge the battery from a household three-pin socket. Read more about PHEVs in our guide.

Which cars are eligible for a plug-in car grant?

Which cars are eligible for the Electric Vehicle Homecharge Scheme?

The list of all the cars eligible for the Electric Vehicle Homecharge Scheme is too long to publish here, but you can check out every car on the OLEV website.

Read our guides to the best small electric cars and cheapest electric cars.

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