LEASING brokers are faced with the unenviable task of telling their electric vehicle customers that the price of the new car they were considering has just gone up by at least £1,000
And if their car costs £34,000 , the price will have gone up by £2,500 as the Government has this week also lowered the Plug-In Grant threshold from £35,000 to £32,000.
Brokers are already reporting some unhappy customers particularly fleet buyers who were considering leasing multiple vehicles. The accountants are working hard on how to best spread the additional cost over the lease period.
Those already in the system are in the clear, however. Anyone who placed orders between 8 December and 14 December will still qualify for the old £2,500 grant, on cars costing up to £35,000. The Plug-in Van Grant has also dropped, to £2,500 for vans under 2.5 tonnes and £5,000 for vans between 2.5 tonnes and 5.0 tonnes
The Office for Zero Emission Vehicles (OZEV) said the Government has a responsibility to manage the grant budget and to deliver value for money for taxpayers and as signalled to industry following the March 2021 grant changes.
The latest cut earlier this week came under fire from the AA and the National Association of Franchised Dealers as margins have already been reduced on various models to ensure they fit within the previous £35,000 RRP Cap. With already small margins, they will now have vehicles in stock that are significantly more expensive on both outright purchase and monthly payments.
Jon Lawes, Managing Director, Hitachi Capital Vehicle Solutions, said: “Last minute cuts to both the grants for cars and vans are counter intuitive to achieving the ambitious targets set by the Government to reduce carbon emissions and has the potential to dampen the strong demand for zero emission vehicles we’ve seen in recent months.
“Despite the growth of EV registrations, this market remains in its infancy and TCO, especially across LCVs, can be challenging for fleet operators who need to adopt. The government rationale to reducing eligibility at this juncture for the second time this year is confusing, as we know financial incentives to encourage EV adoption are an important factor within the vehicle renewal decision making process.”
“In light of these changes, we are working closely with our customers to recalculate their TCO so they can readily factor this development within their decision making.”
