The market for electric cars and plug-in hybrids in the UK is small but growing and a major reason for this growth is the government’s plug-in car grant.

From March 1st 2016, significant changes will be made to the way the plug-in grant is implemented so we’ve complied this guide to what the changes mean.

The Plug-in car grant offers individual full-electric and plug-in hybrid car buyers a fat chunk of taxpayer’s cash to subsidise their purchase. It means lower upfront prices for electric cars and hybrids that you can charge from the mains.

The Plug-in Car Grant was previously set at a generous £5,000 for all eligible vehicles, but changes to the scheme on March 1st 2016 could end up costing some buyers thousands.

How is the plug-in car grant changing?

The electric car subsidy is changing in three significant ways from March 1st 2016

1. From that date onwards, eligible cars will be banded into the following three categories:

Category 1. Vehicles with a ‘zero-emission’ range of 70 miles, and CO2 emissions lower than 50g/km.
Category 2. Vehicles with a ‘zero-emissions’ range between 10 and 69 miles, and CO2 emissions lower than 50g/km.
Category 3. Vehicles with a ‘zero-emissions’ range of at least 20 miles, and CO2 emissions between 50-75g/km.
2. The maximum available grant is being cut from £5,000 to £4,500 for category 1 vehicles, but slashed from £5,000 to just £2,500 for category 2 and 3 vehicles.

3. A £60,000 ‘on the road’ price cap is also being introduced, so cars which are more expensive will not be eligible for the grant at all.

Read more: Auto Express