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THE Government’s decision to cut the Plug-in Car Grant will have far-reaching consequences for consumers, the environment and industry, the Society of Motor Manufacturers and Traders has warned

It said reducing purchase incentives for zero emission cars by a third and completely removing the grant for plug-in hybrids is totally at odds with Government ambition to be the world leader in the take up of ultra low emission vehicles announced in its Road to Zero Strategy.

It also sends confusing signals to consumers and will make it virtually impossible for Government and industry to meet their CO2 reduction targets.

Giving manufacturers and consumers a maximum of one month’s notice with a cap on volumes will result in yet more distortion to a market already impacted by previous conflicting government policies and put even greater pressure on industry.

The SMMT said that while the grant has helped incentivise 160,000 sales of plug-in hybrids over the past seven years, this represents less than half a percent of the 34.7m cars currently on the road.

To grow zero and ultra low emission vehicle uptake to the levels needed to make a meaningful impact on CO2 and air quality, consumers’ concerns over affordability and convenience must be addressed, it added.

The SMMT noted the impact of removing upfront purchase grants in other European markets has had a devastating impact on demand. In Denmark, sales of pure electric cars plummeted by nearly 73% in the year after that government announced its EV tax incentive would end – the market has still not recovered.

The grant has helped the UK become one of the EU’s biggest markets for electrified vehicles with manufacturers looking favourably at the UK when making product allocation decisions for new technologies.

Removing the incentives, said the SMMT, not only impacts demand, it can impact supply as companies reallocate products to more supportive markets, which could mean a reduction in model choice for UK consumers.

Mike Hawes, SMMT Chief Executive, said, “We understand the pressure on the public purse but, given the importance of environmental goals, it’s astounding that just three months after publishing its ambitious vision for a zero emissions future, government has slashed the very incentive that offers our best chance of getting there.”

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