The Depart for Transport said the soaring demand for EVs has led it refocus the grants on the most affordable zero emission cars
The retail price cap for the grant has been reduced to £32,000 from £35,000.
Meanwhile, buyers of small vans will now receive a grant of £2,500, down from £3,000, while the grant for large vans has been reduced by £1,000 to £5,000.
Electric motorbike grants have also been chopped, with buyers now receiving £500, compared with £1,500 before.
The government said the plug-in grant scheme, which has supported nearly half a million vehicles over a decade, has helped kickstart a market that is now moving forward at pace with over one in 10 cars sold in 2021 – over 150,000 – having a plug.
The Depart for Transport said the soaring demand for EVs has led it refocus the grants on the most affordable zero emission cars.
It said sales of zero-emission cars are up 89% compared to 2020, and in the last three months, nearly one in four new cars sold had a plug.
Transport Minister Trudy Harrison said: “The market is charging ahead in the switch to electric vehicles. This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further.
But Edmund King, president of the AA, told the Daily Express: “Many drivers and fleets will be recalculating today to see if they can still afford their chosen EV now that the grants and threshold have been cut.
“With ambitious targets heading into 2030 it seems counterintuitive to reduce incentives although we accept that those purchasing the lower value EVs probably have greater need for assistance.
“This type of purchase is not available for everyone, so reducing the grant and the number of vehicles eligible will be a disappointment for many.”
Read More: UK government slashes electric vehicle grant by £1,000