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The government £5,000 EV subsidy explained

From January 2011 electric vehicles and ultra-low-carbon vehicles will qualify for a 25% subsidy (up to £5,000).

AM explains how the incentives will work and what vehicles will qualify.


The government has allocated £230m to incentivise the sale of electric vehicles (EVs), plug-in hybrids (PHEV) and hydrogen cell ultra-low-carbon cars.

Dealers will deduct the subsidy and claim it back from the manufacturer.

Once the subsidy has been in place for 12 months, there will be a review to assess whether any changes need to be made. Any changes to the scheme as a result of this review would be implemented from April 2012.

The incentives will then continue until April 2014, or until money left has been distributed.

The Office for Low Emissions Vehicles (OLEV) has published the qualifying criteria for vehicles (see below). Electric vehicles must have a range of at least 70 miles and have a minimum top speed of 60mph.

The Department for Transport and SMMT are confident the grant process will work smoothly because it is based on the current scrappage scheme.

Sue Robinson, RMI director, said: “We expect it to be achieved without any major problems but the lead-in period allows time to assess the complete workings of the scrappage scheme. We can then ensure that any issues felt by dealers can be addressed before the EV scheme goes live.”

Mitsubishi is already taking advantage of the future subsidy. Catherine Perrin, EV product manager at Mitsubishi Motors UK, said: “We are taking orders now for the Miev ahead of October’s pan-European launch and are reworking sales volume projections following the government’s decision to accelerate the EV market.”

Mitsubishi has not fixed UK prices yet but the Miev will cost £38,699, reduced to £33,699 with the subsidy.

The manufacturer is confident innovators are willing to pay a higher price for the latest technology and expects to sell 8,500 units globally this year. The 2011 target is 50,000 units after the opening of a second battery production plant.

Mitsubishi expects 20% of its production to be either be EV or PHEV by 2020. These model types, and extended range cars like GM’s Opel/Vauxhall Ampera/Chevrolet Volt, all come within the subsidy programme.

Alliance partners Renault and Nissan expect to launch EVs next year but are not giving UK sales figures.

Sales of the Nissan Leaf start next March but a spokeswoman said: “2011 is very much the launch phase with mass marketing starting in 2012 which is when we will see the volumes increase. We had based our sales plans on the Government introducing this incentive.”

Renault is developing four EVs under the Z.E. sub brand. Sales start next year of the Fluence (a family-sized four-door), the Twizy (a small urban EV) and electric Kangoo. By 2012 Renault intends to start selling the Zoe five-door supermini EV.
The government also announced that London, Milton Keynes and north-east England were chosen to qualify for money to install 11,000 EV charging points.

Qualifying criteria

  • Vehicle type M1 (i.e. cars only)
  • Must be battery electric, plug-in hybrid or a hydrogen fuel cell car
  • Emisions: 0g/km for EV; Max 75g/km PHEV
  • Vehicle performance: Min range 70 miles (113 km) EV
  • Min range: 10 miles (16 km) PHEV
  • Max speed: at least 60mph (96kph)
  • Warranty, vehicle: three years or 75,000 miles
  • Warranty, battery: three years for the battery with a requirement to offer five if requested by consumer
  • Battery degradation: a rate of degradation such that it retains a reasonable degree of performance after a three-year period of normal use.
  • Safety Crash safety:EC whole vehicle type approval; OR crash tested to acceptable international standards (namely, i) A tailored protocol based on EuroNCAP ii) Compliance with crash testing regimes in other developed international markets of similar stringency to Europe; for example USA, Japan, Korea etc)
  • Consumer electrical safety: Manufacturers to confirm they have assessed the risks associated with the use of the vehicles, have developed appropriate mitigating actions and will inform the consumer of these.
  • Compliance with UN-ECE Reg 100


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