The UK’s electric vehicle grant may be a victim of its own success, as the exceptionally high demand seen in September has put the scheme’s future in doubt and raised the prospect of an early end. Policy experts are now suggesting that the fund, which is limited to 400,000 buyers, is being depleted at a faster rate than anticipated.
The grant has been undeniably effective, acting as the primary catalyst for the record-breaking sales of electric and hybrid cars. However, this success comes with a catch. According to David Farrar of the thinktank New AutoMotive, the rapid uptake provides “early evidence” that the scheme might have to close its doors ahead of schedule.
This creates a significant degree of uncertainty for both consumers and the car industry. Potential buyers who may have been planning to purchase an EV in the coming months might now feel pressured to act quickly before the subsidy disappears. For manufacturers, the potential withdrawal of a key sales incentive could disrupt their planning and impact their ability to meet ZEV mandate targets.
An early end to the scheme would present the government with a difficult decision. It could either allocate new funds to extend the program or allow it to expire, which would test the EV market’s ability to stand on its own two feet. Given the market’s continued weakness below pre-pandemic levels, removing the grant could prove to be a risky move.
The very popularity that made the grant a policy success has now become its greatest challenge. The race is on for consumers to claim the remaining funds, but the bigger question is what happens to the market once the finish line is crossed, potentially much sooner than anyone thought.