Representatives from the Department of Transport’s Office for Zero Emission Vehicles (OZEV) provided clarity around the plug-in vehicle grant following the cuts recently announced at a meeting organised by the National Franchised Dealers Association (NFDA).

The meeting was attended by a number of franchised dealers who had the opportunity to ask direct questions and outline potential concerns. OZEV communicated to plug-in grant users how they are likely to make changes to the plug-in grants in the future and provided a positive update on the price cap definition.

Future changes

OZEV stated the plug-in grants were designed to support uptake of ultra-low and zero emission vehicles while the market is “at an early stage”. Going forward, the Government intends to “gradually deliver a managed exit” from the grants (which have been extended until 2022/23) although uptake will continue to be supported through other measures.

The Government explains the relatively low levels of demand when the grant was first introduced meant they were able to give advance notice of rate changes. However, with increasing demand, a very short notice period ahead of the grant rates in March 2020 led to a very large spike in orders between the announcement and changes coming into effect and the “Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers”.

OZEV has stated they will continue to “keep the plug-in grants under review and all grants are subject to future changes”. They also confirmed they are “unlikely to be able to provide additional notice” given the need to manage the grant budget “on behalf of taxpayers and future grant applicants”.

Further guidance for plug-in grant portal users:

•           An order from a customer is only visible to OZEV once it has been placed as an order on the Plug in Grant Portal and there is no guarantee of payment until this has been done.

•           You need to create an order on the portal as soon as you have entered into a contract to sell a grant eligible vehicle to a specific customer.

•           Once an order has been created on the portal the customer is guaranteed the grant at the level and eligibility criteria advertised at that time provided that the vehicle is registered, delivered to the customer AND the order reaches “completed”, “awaiting payment” or “awaiting audit” status on the grant portal within 9 months from the date the order is created.

•           Orders which have not reached the status “completed”, “awaiting payment” or “awaiting audit” within the 9-month period will move to ‘on hold’ status and will be cancelled.

 

As recently announced, OZEV also highlighted they are “unlikely” to offer leeway for grant changes similarly to the 28 days period which was offered following the most recent changes occurred in March 2021. This allowed dealers and manufacturers to claim at previous rates and eligibility criteria for any orders that were placed by customers in the 28 days before the grant rate change which were not logged on the portal.

 

Price Cap Definition

OZEV also provided clarity around the price cap definition stating cars must be priced below £35,000 RRP to be eligible for the grants. In particular, the price cap definition includes “any non-standard option fitted by the manufacturer or dealer affecting the capacity of the battery, drive train configuration or maximum net power”; and it does not include “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” (see below).

Further details on Price Cap Definition

Definition of price for application of the cap to be eligible for the PICG, eligible cars must be priced below £35,000 RRP. The definition of price 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.

Further details: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/970334/plug-in-car-grant-guidance-vehicle-notes.pdf

 

Positively, OZEV confirmed they will keep the dialogue going with NFDA and member dealers.

Sue Robinson, NFDA Chief Executive commented: “NFDA has been working closely with the Government’s Office for Zero Emission Vehicles over the past years, especially, since the launch of our Government co-funded Electric Vehicle Approved accreditation scheme and the development of our EV working group.

“Today’s session proved extremely useful in providing retailers with further clarity around the plug-in grant, including details on the definition of price cap which not all dealers are aware of. We encourage our members to read this information carefully and contact us if they require any guidance.

“Going forward, we will continue to work closely with OZEV to best represent our members’ interests and, in turn, provide franchised dealers with clear and timely guidance”.