Fewer drivers claiming electric car subsidy after amounts slashed

Only 4,200 motorists applied for plug-in car grant between April and June


The number of motorists claiming a Government subsidy for new electric cars has plummeted to the lowest level in two years after the amount of money available was cut, figures show.

Just 4,200 motorists applied for the plug-in car grant between April and June, compared with 17,500 during the previous three months, according to data obtained by motoring research charity the RAC Foundation.

From March 1, the amount of cash which could be obtained by motorists buying electric or hybrid cars was reduced from £5,000 to either £2,500 or £4,500, depending on the zero emission range of the vehicle.

About 74,800 people have claimed plug-in car grants since they were launched in 2011, but the total for April to June was the lowest since the same period in 2014.

The RAC Foundation believes the fall in demand is due to drivers bringing forward purchases to before the available money fell.

The organisation's director, Steve Gooding, said: "Given that a 5p charge for a plastic bag changed the shopping behaviour of millions, it should be no surprise that when thousands of pounds are at stake drivers are very shrewd about their buying decisions.

"The cost of green cars is pivotal to their take-up and the market will remain acutely sensitive to changes in price, whether that is driven by manufacturers or ministers."

The foundation's figures show that the Mitsubishi Outlander plug-in hybrid is the UK's most popular ultra-low carbon car, with 66,000 licensed for use on UK roads.

The pure battery-electric Nissan Leaf is in second place at 13,000, followed by the BMW i3 - which is available as pure battery-electric or with a petrol engine to recharge the battery on long journeys - at 4,000.

Under the current terms of the plug-in car grant, vehicles with a zero emission range of more than 70 miles are eligible for subsidies up to £4,500 while those with a shorter range - such as plug-in hybrids with a petrol or diesel engine - can be worth £2,500.

Government advisory panel the Committee on Climate Change warned last year that 9% of new car sales should be electric vehicles by 2020 for the UK to meet its legal obligation to cut greenhouse gas emissions by 80% by 2050 compared with 1990 levels.

This would mean around 240,000 ultra-low carbon cars being bought, based on last year's total new car sales of 2.6 million.

According to figures from the Society of Motor Manufacturers and Traders, demand for alternatively fuelled vehicles for the year to the end of August had grown by 22% compared with the same period last year, giving them a market share of 3.2%.