While the UK’s overall car sales have dropped by over 90% in 2020, sales of electric vehicles have, for the first time ever, beaten diesel. The UK is one of the few governments that has a comprehensive strategy for electrification, with both an official Office for Low Emission Vehicles (OLEV) and an electrification strategy called the Road to Zero strategy. Combined with an increasingly climate-friendly public attitude, these policies look set to support a big e-mobility uptake in the UK in the next decade. This article will take a closer look at EV and EV charging policies and incentives in the UK.
- EV Incentives in the UK
- EV Charging Incentives in the UK
- Overview of Government Electrification Initiatives & Policies in the UK
EV Incentives in the UK
With alternatively fuelled vehicles now making up roughly 10% of total car sales, the future of EVs in the UK is looking promising. An estimated 1 million EV cars are predicted to be on UK roads by 2020.
It’s difficult to know exactly why EVs are becoming more popular in the UK. The release of the new Tesla in 2018 appears to have something to do with it, given that sales of this particular car tripled in 2019, and continue to lead the 150% growth in EV sales this year. Increasing climate awareness may also play a part, heightened by COVID-19, while the UK Government’s continued push towards zero emissions is probably the biggest factor. Let’s explore the EV incentives available in the UK.
National EV Incentives for Individuals and Businesses
- Purchase grant: with the Plug-in Car Grant, buyers can receive up to:
- 35% of the cost of an electric car (up to a maximum of £3,000 depending on the model)
- 20% of the cost of an electric motorcycle or moped (up to a max. of £1,500).
- 20% of the cost of an electric van (up to a max. of £8,000).
- 20% of the cost of a large electric van or truck (up to a max. of £20,000 for first 200 orders, after that up to a max. of £8,000).
- 20% of the cost of an electric taxi (up to a max. of £7,500).
- This grant is administered by OLEV. You do not need to do anything to benefit from this grant scheme as the dealer will include the value of the grant in the vehicle’s price. Car manufacturers and dealerships can apply here to participate.
- Ownership tax: pure electric vehicles costing less than £40,000 are exempt from the Vehicle Excise Duty (annual road tax).
- Company car tax: businesses that buy EVs can write down 100% of the purchase price against their corporation tax liability if the vehicle emits no more than 50g/km CO2, (paying just 1% CCT in 2021, and 2% in 2022); plug-in electric vehicles emitting less than 50g/km of CO2 have their company car tax set at 16% in 2020, which is 4-8% lower than the tax on diesel company vehicles.
Local and Regional EV Incentives for Individuals and Businesses
- Scotland: The Scottish Government offers an interest-free loan to support drivers switching to an EV or hybrid car. Loans of up to £35,000 to cover the cost of purchasing a new electric/hybrid vehicle, repaid over a period of 6 years. Find out more here.
- Northern Ireland: A maximum grant of €5,000 is available for privately bought EVs, and a max grant of €3,800 for those bought commercially. Find out more here.
- London: EVs and plug-in hybrids (PHEVs) are exempt from London’s Congestion Charge scheme until 2025.
- Local parking benefits: There is free and discounted parking for EVs in some localities.
Additional benefits: The UK Government is making plans to give EVs special green number plates so that they can benefit from local incentives, such as free parking, using bus lanes and accessing areas cut-off from normal vehicles.
EV Charging Incentives in the UK
The UK has a growing network of charging points. According to Zap-map, in 2019 there were around 15,500 charging points and, due to multiple connectors, 26,500 EV charging plugs across the country. This is five times more than in 2011. In 2020, the number of charging points has almost doubled, to around 30,000. EV charging points are gradually becoming competition, then, for the 68,000 petrol pumps in the country. The main companies currently offering EV charging points are Ionity, BP Chargemaster, Tesco and VW.
The Conservative party committed to investing more in green technologies in the lead up to December’s election, including Boris Johnson’s vision of a land filled with EV chargers which would see everyone in England and Wales within 30 miles of a public charging point. The party detailed an extra £500 million for EV charging infrastructure in the near future, on top of the new £400 million charging fund and the £80 million dedicated to EV charging as part of the Road to Zero strategy’s £290 million budget. The existing funds cover some of the following policies:
- Chargepoints to be available at motorway service areas and large fuel retailers.
- Houses built in the coming years are electric vehicle ready. All new homes, where appropriate, should have a pre-installation available.
National EV Charging Incentives for Individuals and Businesses
- EV charger grant for homes: the Electric Vehicle Homecharge Scheme (EVHS) enables individual buyers of eligible EVs to receive a grant for up to 75% (capped at £350, inc. VAT) of the total purchase and installation costs of one EV charger for their home. Company cars and leased cars are also eligible. You can apply here.
- EV charger grant for workplaces: the Workplace Chargepoint Grant is a voucher-based scheme that provides the upfront costs for the purchase and installation of EV charging points at workplaces:
- After the 1st of April 2020: firms can cover 75% of all purchase and installation costs, up to a maximum of £350 for each socket, for up to a maximum of 40 across all sites. You can apply here.
- Until the 1st of April 2020: firms can cover 75% of all purchase and installation costs, up to a maximum of £500 for each socket, for up to a maximum of 20 across all sites. You can apply here.
Click here to download our ‘How To Apply Guide’.
- Company Tax Benefits: businesses that install charging infrastructure can access tax benefits through a 100% first-year allowance (FYA) for expenditure incurred on electric vehicle charging equipment.
Local and Regional EV Incentives for Individuals and Businesses
- EV charger grant for homes in Scotland: the Energy Saving Trust enables individual buyers of eligible EVs to receive a grant for up to £300 of the total purchase and installation costs of one EV charger for their home, with an additional £100 available for those in rural Scotland. This grant is available on top of the £350 OLEV grant mentioned above. You can apply here.
- EV charger grant for workplaces in Scotland: the Energy Saving Trust enables businesses to receive funding for the purchase and installation costs of EV chargers for their workplace. The exact number of EV chargers for which financial support can be provided depends on the amount and type of company and staff-owned EVs. For more detailed information and the application form, click here.
Support to Develop EV Charging Infrastructure for Local Authorities
As there are 408 councils in the UK, we will only give a brief overview of what some councils offer in terms of EV charging incentives. Local authorities have been important promoters and coordinators of e-mobility in cities and regions, often relying on competitively awarded central government funds, such as Go Ultra Low Cities, Ultra Low Emission Taxis and Low Emission Buses schemes.
There have been some problems with this system, however, in that many local councils simply do not have the inhouse knowledge, skills or time to apply for these bids. Furthermore, local councils who win bids often find that central government initiatives do not adequately account for local conditions and planning policy requirements because local authority representatives are rarely involved in the creation of such initiatives. Many struggle with funding too. Some central government programs, like the On-Street Residential Charge Point Scheme (explored in more detail below) provide only a certain percentage of the financial support for charging infrastructure, leaving councils without the funds to fully support or maintain it over time. This has led to some geographical inequalities across the UK, with some regions excelling at providing EV charging infrastructure and others very far behind. The UK government is currently exploring some solutions to these issues. It hopes, in the near future, to be able to provide all local authorities with the appropriate guidance and funds to reduce these interregional inequalities.
The On-Street Residential Charge point Scheme (ORCS)
Some local authorities have taken advantage of OLEV’s On-Street Residential Charge point Scheme (ORCS) to receive help and guidance to install on-street charging points in their localities. Local Authorities can receive a grant to part-fund (75%) the capital costs relating to the procurement and installation of on-street electric vehicle charge point infrastructure in residential areas. OLEV provides up to £6,500 per charge point installation, and each project should not exceed more than £100,000 in OLEV funding. Additional funding of £20 million was made available to continue the scheme into the year of 2020-21.
You can check if your local authority is part of the ORCS here.
Overview of Government Electrification Initiatives & Policies in the UK
The Office for Low Emission Vehicles (OLEV)
The Office for Low Emission Vehicles is a team backed by over £900 million in funding who work across different areas of the UK Government – notably the Department for Transport and the Department for Business, Energy & Industrial Strategy – to support the early market for ultra-low emission vehicles (ULEV). They aim to position the UK as a leader of ULEV development, manufacture and use. Through this, they hope to contribute to economic growth and reduce greenhouse gas emissions and air pollution in the UK.
OLEV oversees a number of key policies and initiatives promoting EV adoption in the UK, including:
- EV grants for ULEVs
- research programmes
- business consulting
- funding incentives
- developing the UK’s ULEV manufacturing capacities
- contributing to the development of new carbon dioxide emissions standards
As well as its foundational government team, OLEV is also supported by staff on secondment from industry and academia.
OLEV: Go Ultra Low Campaign
One of OLEV’s most prominent projects is the Go Ultra Low campaign, a joint Government and automotive industry initiative supported by OLEV and the Society for Motor Manufacturers and Traders (SMMT). This campaign is principally focused on education and awareness-raising. It provides all the information prospective EV buyers in the UK need to both buy an EV and take advantage of all the benefits associated with being an EV owner. For instance, the Go Ultra Low website offers answers to prospective and existing EV owners’ common questions, such as how to choose the right electric vehicle, which energy tariff to go for, and how to charge your EV at home. The Go Ultra Low website provides all of this information, plus guidance on how to fully capitalise on UK EV and EV charging incentives. There are also tools to calculate how much you could save as an EV, rather than a conventional car owner. OLEV has also done a really fantastic thing by automatically enrolling all recipients of the plug-in car grant into Go Ultra Low.
The Road to Zero Strategy
The Road to Zero Strategy outlines how the government will facilitate the transition to zero-emission road transport and reduce emissions from conventional vehicles during the transition. Although the strategy is long-term in scope and ambition, covering the drivers of change, opportunities and risks until at least 2050, it has a practical focus on how the UK will lay the foundations for the transition now. This strategy has a £290 million budget dedicated to boosting the use of low-emission vehicles.
The Transport Energy Model (TEM)
The TEM is a model developed by the Department for Transport (DfT), in collaboration with industry, academia, environmental groups and governments. It assesses the energy consumption, air quality pollutant emissions and greenhouse gas emissions of a range of road transport fuels and technologies over the period to 2050. The model includes comparisons of various vehicle powertrain technologies and fuel options for cars, vans, buses, trucks and HGVs.
The Charging Infrastructure Investment Fund
The UK government announced a £500 million fund for the development of “green technologies for a cleaner and healthier future” in September 2019. This includes a new £400 million Charging Infrastructure Investment fund, managed and invested on a commercial basis by private sector partners, who will pay for half the fund (£200 million). The first £70 million investment, provided by the UK Government and the car company Masdar, will go towards creating 3,000 new rapid charge points, more than doubling the number of rapid charge points across the UK by 2024.
Both OLEV and other government departments working on the Road to Zero strategy aim to end the sale of fossil-powered vehicles by 2040 using policies covering commercial vehicles, public transport, charging infrastructure and more. These include both EV and EV Charging Incentives, as we explored in more detail above.
According to a recent Deloitte report, almost half of consumers would consider buying an EV as their next car. With the EV prices expected to fall rapidly over the next decade and EV charging infrastructure being rolled out across the UK, EVs should come to take up more and more market share.
The UK Government is clearly looking to incentivise people to go green and choose EVs over conventional cars in order to stay on their planned “road to zero”. The recent funds made available for EV charging infrastructure testify to this desire. Some barriers remain, however. Concerns around charging capacity and price, and lack of EV chargers in local areas, constitute the main barriers to EV uptake in the UK. The Government could very easily address these by launching a communications campaign dispelling myths about EVs, continuing to fund EV incentives for individuals and businesses, and rolling out more evenly distributed and comprehensive financing and advice for local authorities’ development of EV charging infrastructure. Based on its policy papers and recent moves, the UK government looks likely to carry out the two latter suggestions in the coming few years, but the first is not yet in sight. However, many private companies, like Tesla and Volkswagen, looking to sell EVs or EV chargers may well provide the campaigning element that the government lacks.
The Conservative win in the December 2019 election will influence the future of UK e-mobility and energy policy over the next decade, and the party looks set to continue the UK’s trajectory towards being greener into 2020 and beyond. The popular mood in the UK has really swung towards climate-friendly policies in recent years. With the launch of groups like Extinction Rebellion, a UK-founded but now global activist climate movement, UK citizens look increasingly keen on further climate action. In this sense, the future of e-mobility in the UK looks very bright, but we will have to see if the ideas proposed by policymakers, activists and the wider public come to fruition.
To find out about the EV and EV charging incentives of other European countries, read our complete EU EV incentives guide.
And if you’re looking for an EV charger provider for your home or organisation, take a look at our fab new options: