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  • Mar 18, 2021

  • 10 min read


Plug-in Grant Changes

Big news - you may have all read about the government updates announced today around electric vehicle grants. Find out everything you need to know below.

What is the Plug-in Grant?
The UK Government’s Plug-in Grant, originally introduced in 2011, is a scheme designed to help financially support drivers who want to purchase an electric vehicle (EV) by covering a portion of the cost of their EV. Since its introduction the grant has supported the purchase of more than 285,000 vehicles, totalling around £1.3bn in funding!

How has it changed?

As of 18th March 2021, the Plug-in Car Grant has been changed to provide up to £2,500 of support for electric cars priced under £35,000*. Previously, the grant provided £3,000 worth of support for EVs under £50,000.

The Plug-in Van Grant has also changed. For small electric vans (< 2.5 tonnes gross weight), the grant will now cover 35% of the purchase price up to £3000. For larger electric vans (2.5-3.5 tonnes gross weight), the grant will now cover 35% of the purchase price up to £6,000. Previously, the grant for all electric van types covered 20% of the purchase price, up to £8,000.

Head to the government's website for the latest list of vehicles eligible for the plug-in grants.

Why has the grant changed, you ask?

This most recent change has undoubtedly come as a surprise for most, and some may question why this reduction has taken place at a time when we’re seeing growing emphasis on the transition to EVs, with the 2030 ban on the sale of petrol and diesel vehicles being the biggest indication of this.

The government has explained this most recent change by saying that it will ‘target less expensive models and reflect a greater range of affordable vehicles available, allowing the scheme’s funding to go further and help more people make the switch to an electric vehicle’.

The government has previously made clear that, as ‘the market becomes better established and more competitive, the need for direct government financial support will decrease’. Consequently, the government has noted that there will be a ‘managed exit’ from the grant, with the latest change being the most recent indication of this. There’s no doubt that the EV industry is undergoing serious growth, with 2020 seeing a 185.9% increase in EV registrations compared to 2019.

Our CEO, Fiona Howarth, has expressed disappointment about the change, but still maintains that brilliant savings can still be made when switching to EV:

"It is disappointing to see the government drop the grant amount, especially so soon after announcing the 2030 ban on petrol and diesels - and with no notice. However, all is not lost - drivers can still save £2,500 on vehicles less than £35,000 as well as the additional savings EVs provide on fuel, road tax, maintenance and servicing. Plus, you can also save 30 - 40% on your electric car every month through a salary sacrifice scheme - enabled by the low company car tax rates the government has committed to for the next 4 years”.

More importantly, how does the most recent change affect you?

  • The changes come into action from today (18th March 2021). For those who have already started the process of getting quotes, or those who have placed an order, this is how the most recent changes will affect you:
  • For those who have ordered a vehicle with us but are yet to receive confirmation of your order or delivery of it - don’t worry, we are on it! Our Customer Service team is in the process establishing your specific circumstances and will be reaching out to you soon.
  • Any orders placed with the dealer or manufacturer where a purchase agreement can be provided as proof (in the last 28 days) before 23:59 on the 17th March will still take advantage of the £3,000 grant.
  • Any orders that are due to be placed with the dealer or manufacturer from 00:00 on 18th March will be subject to the updated plug-in Grant of £2,500 for cars under £35,000 - any cars with an RRP of over £35,000 will no longer be eligible for a Plug-in Grant.
  • Any quotes you have received for vehicles affected will no longer be valid and we will be requoting you.

Still not sure - get in touch!

Of course, we appreciate that unannounced changes like this can cause confusion and uncertainty! If you’re worried about the status of your order, or how this will change your purchasing decision moving forwards, we’re here to help! You can contact us via the following:

  • For general concerns or if you’re unsure of exactly who to contact, you can email us at hello@octopusev.com, or give us a ring at 020 3870 3892
  • Alternatively, if you’ve already spoken to one of our EV Specialists or Customer Service representatives, you can contact them directly about any questions you may have
  • We also ran a dedicated YouTube live stream on the grant change

*Full definition of the new Plug in Car Grant Price Cap:

  • To be eligible for the Plug-in Car Grant, eligible cars must be priced below £35,000 RRP. The definition includes:
  • VAT, including VAT reclaimable by a business
  • vehicle manufacturer or dealer's mandatory extras including delivery charges or administration fees
  • the battery cost (including where the battery is leased)
  • any non-standard option fitted by the manufacturer or dealer affecting the capacity of the battery, drive train configuration or maximum net power.

and excludes:

  • any non-standard option fitted by the manufacturer or dealer which does not affect the capacity of the battery, drivetrain configuration or maximum net power.
  • modifications such as ‘police packs', ambulance/fire engine modifications
  • modifications for disabled users
  • warranty/insurance and service packages etc
  • first registration fee and cost of first licence
  • discounts (including rebates).

Where a vehicle model has a price range which straddles the cap only those variants/trim levels priced below the cap will be eligible for the grant. Variants or trim levels of eligible vehicles which are priced above the price cap are not eligible for the grant.

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