Plug-In Van Grant Announced

It was announced this morning that the government’s plug-in car grants scheme is to be extended to include electric vans. The Government is prepared to spend £900m over the next 3 years to promote the use of ultra-low carbon vehicles. It’s hoped that this push will help to establish the UK’s automotive industry as one of the world leaders, in the development of ultra-low carbon vehicles.

The current plug-in car grants scheme allows anyone purchasing an electric car to claim a grant of up to 25% of the value of the vehicle, up to a maximum value of £5,000. New plug-in van owners can claim up to 20% of the van value which is capped at a maximum value of £8,000. For a van to qualify for the grant it must emit less than 75g/km CO2, be capable of traveling at least 60 miles between charges (10 miles in electric mode for hybrid vans), and be capable of reaching speeds of more than 50mph, finally to ensure the correct level of safety is met it must meet the ‘European Vehicle Type Approval’.

In 2011 there were 5 cars available on the market that qualify for the grant and 1052 eligible registered cars sold, of which the Government received only 892 applications for the plug-in car grant. With 5 more cars being released in 2012 along with the various vans on offer it will be interesting to see how many applications are applied for in 2012. The Government are hoping that their plug-in grant combined with low running costs and tax benefits will entice more people to make the move to electric vehicles.

A low running cost of less than 2p per mile will be the big attraction especially for companies running van fleets, but there are still many drawbacks which are putting businesses and private individuals off purchasing electric vehicles.

Because the technology is still in its infancy and production is on a small scale electric vans can be very expensive, approximately three times the cost of a diesel van. Forecast for depreciation in the first generation of fully electric vans is also a big problem as they are predicted to lose approximately 80% of their initial value over a three year period. Electric vehicle also need a secure storage to charge their batteries for several hours overnight and have a limitation on the number of miles that they can travel on one charge.

Despite these limitations the number of Eco-friendly vans and cars on our roads are on the rise and as the technology progresses and their production increases we should start to see a significant drop in the costs of these vehicles.