Electric car prices could skyrocket in the UK as government grant faces cuts in the Budget

Electric car prices could increase by thousands of pounds in the UK as the government could be forced to slash the green incentives.

Motorists could be stung by the price increase if the grants fall victim to cuts, reveals the Observer.

The Treasury has been warned that to be able to continue giving motorist subsides to help them buy plug-in hybrid and electric cars then they will have to find emergency funds.

Currently, in the UK motorists can receive up to £2,500 off the cost of a new plug-in hybrid car and £4,500 off the cost of a new electric vehicle.

Under the proposals, the £4,500 grant would be slashed to £3,500 and the £2,500 grant would be scrapped altogether.

In addition to this a luxury car cap would be worth up to £60,000 would be eligible for the discount.

This could have some implications on UK targets to phase out petrol and diesel cars by 2040 and phase out the highest polluting cars on the road.

It could put motorists off from purchasing a new electric car, as now they will be more expensive.

Electric cars are currently pricier than petrol and diesel cars and this latest change could push motorists even further away.

Sales of electric cats hit record highs in August with one in 12 cars sold being an EV and figures from the Society of Motor Manufacturers and Traders claim that hybrid and electric cars made up eight per cent of the overall market.

The Budget will be announced on October 29th, where Chancellor Philip Hammond will reveal whether or not the grant will be cut.

A source close to the negotiations said to the Observer: “Developing new technology and maintaining our car industry are both strategic priorities, Philip should see this more clearly than anyone.

“Greg [Clark, the business secretary] isn’t asking for huge amounts, unlike other departments, but does want to deliver for business and the consumer.”

A Department for Transport spokesperson said: “The Road to Zero Strategy sets out a clear path for the country to be a world leader in the clean transport revolution, including continuing to ensure the tax system incentivises the purchase of the cleanest vehicles.

“We have already supported the purchase of more than 150,000 ultra-low-emission vehicles and offer a range of infrastructure incentives as part of our nearly £1.5bn investment to support the transition to zero-emission vehicles.

“We will continue the plug-in grant until at least 2020, and keep the rates under constant review.”

Source : EXPRESS

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