Vauxhall is the latest car maker to have tweaked pricing for its electric car range in the wake of the government’s changes to the Plug-in Car Grant.
Vauxhall’s new pure-electric Mokka-e in SE Premium trim now starts at £33,040 while the top-of-the-range Launch Edition starts at £34,995.
As for the Vivaro-e Life people mover, prices have been cut by £2,000 so the entry-level Edition model is now £34,995.
The Corsa-e supermini’s pricing remains unchanged as this model falls beneath the new £35,000 threshold.
The price cuts are in response to the government changing the Plug-in Car Grant last week.
Vauxhall Corsa-e (Image: Vauxhall.co.uk)
The grant was first introduced in 2011 as an incentive for motorists to purchase a pure-electric vehicle. But last week the price cap for eligible vehicles was reduced from £50,000 to £35,000, while the discount dropped from £3,000 to £2,500.
Paul Wilcox, Vauxhall’s recently-appointed new managing director, said: ‘At Vauxhall, we believe in making sure our vehicles are as accessible as possible to the greatest number of people, and especially so when it comes to zero emissions-in-use motoring, so I am pleased to confirm that all Corsa-e, all Mokka-e and the new Vivaro-e Life Combi are eligible for the government Plug-in Car Grant.’
The announcement of the changes to the grant came out of the blue and Vauxhall is one of a number of manufacturers who reacted quickly and changed prices for their pure-electric models.
The government’s announcement caught the car industry off guard, with Mike Hawes, SMMT chief saying it was ‘the wrong move at the wrong time’ that ‘moves the UK even further behind other markets’.
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CAR GRANTS for those purchasing brand new fully-electric road cars have been dramatically cut from £3,000 to £2,500 under a new initiative from the Government.
Campaigners have attacked the proposals with many warning it could be families and those who need to purchase larger road cars who will be the most affected. The proposals also cap the scheme to models only priced below £35,000.
This means the UK’s most popular electric car, the Tesla Model 3 will no longer qualify as part of the plug-in grant discount.
With sales of brand new petrol and diesel road cars banned from 2040, drivers must switch.
But, road users can still secure a range of vehicles under the new measures including the popular Renault Zoe and Honda E.
Nissan Leaf
The Nissan Leaf is one of the longest-running electric vehicles on the market and is a popular option for those making the switch.
The Leaf is available for just over £27,000 while the Leaf + model can be purchased for around £33,000.
The classic Leaf is capable of up to a 168 miles of range on a single charge with the premium model said to manage up to 239 miles.
Nissan claims drivers who make the switch will also benefit from no congestion charge fees or Vehicle Excise Duty (VED) rates.
Nissan also states the cars are eligible for zero percent Benefit in Kind rates meaning company car owners will pay even less.
Nissan Leaf (Image: Qurren/Wikipedia)
MG5 EV
The Government has confirmed one of the most popular electric cars the MG5 EV will still be eligible for grant payments.
The model starts from just £25,495 but is capable of up to 163 miles on electric power.
However, the car is one of the best low-budget options and even has a five star Euro NCAP crash test for extra road safety.
Honda- e
The Honda-e is one of the more quirkier electric cars on the market offering a unique, compact design.
The model is one of the only cars on the market to be fitted without traditional wing mirrors in place of camera technology beamed to the cockpit.
The car is available for just £27,000 but has a small range compared to some equivalent models with just 130 miles guaranteed.
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The Government has cut the electric car grant from £3,000 to £2,500 and excluded models that cost more than £35,000.
It says grants will no longer be available for higher-priced vehicles, “typically bought by drivers who can afford to switch without a subsidy from taxpayers”.
Tax incentives, including favourable company car tax rates, will remain in place, however.
The changes are expected to allow the funding to last longer and be available for more drivers, reflecting the growth in the number of cheaper electric cars.
Transport Minister Rachel Maclean said: “We want as many people as possible to be able to make the switch to electric vehicles as we look to reduce our carbon emissions, strive towards our net-zero ambitions and level up right across the UK.
“The increasing choice of new vehicles, growing demand from customers and rapidly rising number of charge points mean that, while the level of funding remains as high as ever, given soaring demand, we are refocusing our vehicle grants on the more affordable zero emission vehicles – where most consumers will be looking and where taxpayers’ money will make more of a difference.
“We will continue to review the grant as the market grows.”
Charging with an Ohme smart charging cable
The Government has announced a £20 million research and development competition to find solutions to the challenges associated with increasing the uptake of zero emission vehicles (ZEVs) and the necessary infrastructure
New Government legislation is also set to end the monopoly on electric car charging at motorway services, by ensuring chargers are reliable and accessible by all.
The plug-in vehicle grant scheme was renewed last year when plug-in hybrids and cars costing more than £50,000 were excluded. It was originally introduced in 2011 and has supported the purchase of 285,000 vehicles to date.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), believes the decision is the wrong move to make. He said: “New battery electric technology is more expensive than conventional engines and incentives are essential in making these vehicles affordable to the customer.
“Cutting the grant and eligibility moves the UK even further behind other markets, markets which are increasing their support, making it yet more difficult for the UK to get sufficient supply.
“This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the Government’s ambition to be a world leader in the transition to zero emission mobility.”
The number of electric cars on UK roads is expected to exceed that of diesel-powered models by 2030, research by The AA has found.
Plug-in van customers had been eligible for a 20% reduction on the vehicle purchase price, up to a maximum of £8,000. However, this has changed to 35% of the purchase price for small vans, up to a maximum of £3,000 and 20% of the purchase price for a large van, up to a maximum of £6,000.
The plug-in truck grant, which had provided funding of up to £20,000, has been cut by £4,000. The new grant covers 20% of the purchase price, up to a maximum of £16,000. It will be available for the first 250 orders placed. Grants at the £16,000 rate are also limited to 10 per customer. After the 250-order limit is reached, a maximum grant rate of £6,000 will apply.
The British Vehicle Rental and Leasing Association (BVRLA) also criticised the timing of the decision to cut the plug-in grant.
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The perceived high cost of electric vehicle (EV) charging is a key barrier to EV uptake, according to research conducted by energyhelpline.com.
According to the survey, almost two-thirds of consumers believe that EVs cost up to £50 to fully charge at home, this is despite analysis showing that they cost between just £6 and £17 to fully charge.
The survey also revealed that many consumers are concerned about mileage and are worried that their EV won’t get them from A to Z without running out of charge.
38% of consumers cited the distance per charge and almost half (44%) cited the lack of charging points across the nation as the biggest barriers to purchasing a fully electric car.
However, energyhelpline.com has found that some EVs can offer an estimated 270 miles per charge – this is more than enough to travel from Sheffield to Edinburgh – and all for a total cost of £12.32 in electricity.
Dacia Spring 2021 (Image: Dacia.co.uk)
Tom Lyon, director of energy at energyhelpline.com, said: ‘Electric-only vehicles have come a long way over the last ten years, but our research reveals that there’s a clear disparity between perception and reality, with BEV cars costing as little as four pence a mile to run using electricity charged at home.
‘To help the UK meet its carbon reduction targets, it’s vital to do even more to boost uptake in the technology. Energy suppliers have a clear role to play in helping motorists make the move to electric vehicles. By offering special tariffs and providing access to competitively priced on-street charging, suppliers can help dispel misconceptions around electric cars to actively encourage uptake.
‘Not only is charging far more cost effective than filling up at the petrol station, switching tariffs will help cut charging costs. Suppliers such as Bulb and OVO offer EV plans aimed at electric car owners, providing benefits such as free access to public charging and lower at home rates for overnight charging, and we’d encourage more suppliers to do the same.’
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New services mean you can have a greener vehicle on your driveway for little commitment
You’ve already got a monthly Netflix subscription, and maybe a veg box delivery service. So why wouldn’t you start leasing an electric car on the same month-to-month terms?
Hot on the heels of bicycle and other monthly subscription services, drivers can now get electric cars on a renewable monthly basis, with everything included – even free charging.
A number of firms are now offering this fresh take on driving, effectively giving people a chance to try electric vehicles without the commitment of buying or entering a lengthy leasing agreement.
For £389 a month – with no up front deposit – Onto will provide a Renault Zoe 135 capable of about 190 miles on a full charge. As with Netflix, the contract automatically renews each month unless you cancel, meaning that as long as you keep paying, the car stays outside your house.
Included in the monthly fee is the insurance, maintenance and servicing, tyres, breakdown cover, the London congestion charge registration – and charging at 11,000 public chargers.
Analysts say it is a great way to try an electric car without a huge financial commitment. Until now, the options were expensive leasing deals, typically lasting a minimum of two years, starting at around £240 a month. Usually, there’s a deposit of three monthly payments upfront, and drivers have to insure and service the car themselves. Those buying a new electric car faced having to hand over a minimum of £25,000.
By the end of this month Onto expects to have a fleet of 2,300 vehicles and is planning to double in size every three months throughout 2021.
Renault ZOE Van (Image: Renault)
Its service is based on its smartphone app. Customers have to be aged 25-85 and have to have a driver’s licence with no more than six penalty points in the last three years. You also can’t have been the cause of more than one crash in the last three years.
However, if you qualify and can pass the firm’s ID and other checks, it will deliver a car to your home (for £49.50) within 72 hours. There are a range models on offer – from the Zoe starting at £389 a month, up to the luxury Jaguar I-Pace at £1,299 a month.
The Tesla Model 3 starts at £799 a month for the standard car, while the long-range version, with a 280- mile range on a full charge, is £999 a month.
The crucial difference between these prices and conventional leases is that they include access to Onto’s fleet insurance policy. Users are allowed to use the car for commuting, social use and occasional business. However, commercial use, as a taxi or similar, is prohibited.
When you consider it could easily cost £800-£1,000 a year for many drivers to insure these cars, Onto’s pricing starts to look like good value. If you want a partner or friend to be able to drive, you’ll pay an extra £9.99 a month.
Be warned, though, that if you have an accident you will have to pay the first £1,000 of any claim.
Hirers get 1,000 miles included in their monthly fee, but you can buy extra if you find your mileage starts adding up.
Rather bizarrely, you don’t get the actual car keys: you will only be able to use the app on your phone to unlock, lock, and start the car.
The best bit is that if you decide you don’t need the car, after three months for instance, you can hand it back with no financial penalty other than the £49.50 collection fee.
Equally you can trade up or down to a better car, or a cheaper model, at any time. All the firm’s cars are 100% electric.
Free charging comes via BP Pulse, Shell and Tesla’s network, which would normally cost 30p per kWh, or around £15 to fully charge a Zoe. There is, of course, nothing to stop you charging the car at home at your own expense.
The other main difference between this service and a conventional lease is that you don’t get a new car: but it will generally have low mileage and be less than two years old.
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The government wants to stop sales of new petrol and diesel cars by 2030, but drivers are being slow to switch to electric vehicles.
A report by the National Audit Office (NAO) found that sales of electric cars not growing fast enough to meet the government’s climate targets.
In November 2020, the government announced plans to stop the sale of new cars that are powered solely by petrol or diesel by 2030. From 2035, only zero-emission cars can be sold, and by 2050 government wants almost all cars to emit zero carbon.
But as of September 2020, only 1.1% of UK cars were ultra-low emission including 0.5% which were electric.
By the end of September 2020, sales of new ultra-low emission cars accounted for 8% of the market, above the projections of the Office for Zero Emission Vehicles (OZEV).
But while sales of electric cars have increased, the NAO says “substantial growth” is required to meet the government’s target for them to comprise 100% of new sales from 2035.
The report also criticised the setting up of public charging points in residential areas. Between 2017-18 and 2019-20, OZEV allocated £8.5m to help local authorities install on-street residential charge points, but uptake has been slow.
IONITY rapid charge points at Leeds Skelton Lake Services (Image: IONITY)
By March 2020, government funding had contributed to 142,604 new charge-points, most of which are on private driveways. OZEV has spent £97.2m supporting the installation of more than 133,000 chargers for those with off-street parking.
OZEV informed the NAO that it initially focused on supporting people with off-street parking or with an ability to charge at work. It has not yet focused sufficiently on charge-point availability for people who do not have a driveway.
Gareth Davies, the head of the NAO, said: “The number of ultra-low emission cars on UK roads has increased, but meeting the government’s ambitious targets to phase out new petrol and diesel cars in less than a decade still requires a major transition for consumers, car makers and those responsible for charging infrastructure.
“Government now has the opportunity to reflect on what has gone well and better target its interventions and spending to secure this fundamental change and deliver the carbon reduction required.”
Michael Briggs, head of sustainability at Which?, said: “To ensure electric cars are a viable option for motorists and the UK can hit its net zero target the government must urgently tackle the costs involved for those who do not have the ability to charge at home.
“The public charging network can be confusing due to the lack of easy ways to pay, inconsistency of unit pricing and unreliable apps. The multiple networks of chargers also require motorists to download specific apps, or register a card, prior to charging their car.
“If it wants to achieve its target of phasing out new petrol and diesel car sales by 2030, the government should prioritise making the public electric vehicle charging network larger, simpler and far more accessible than it is today.”
Research by heycar has found that electric cars are cheaper to insure than comparable petrol and diesel models.
It’s Time to Go Green!
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Every year, we see more electric vehicles on the UK’s roads. A total of 108,205 fully-electric vehicles or EVs were sold in 2020, representing a 185% increased compared to 2019.
That’s according to data from the Society of Motor Manufacturers and Traders, which says that 1,631,064 cars of all types were sold in the UK last year.
Coronavirus meant that 600,000 fewer cars were sold compared to 2019, the largest year-on-year decline since the Second World War.
While the number of new petrol and diesel cars sold fell, the number of electric vehicles and plug-in hybrid cars sold increased.
Just over 10% of all vehicles sold in the UK last year had some level of zero emission running capability and could be plugged in.
What are the reasons behind the increase in sales?
There are a number of reasons behind the move towards electric and eco-friendly vehicles. Drivers who are conscious of the environment see driving an electric vehicle as their way of doing a little bit to reduce CO2 emissions.
More people are being drawn towards EVs as their prices begin to fall. A greater number of carmakers are producing electric vehicles, not just high-end, expensive brands like Tesla.
Tesla Model 3 (Image: Tesla.com)
People with a more modest budget are now able to shop in the electric market. Electric car owners can get vehicle tax reductions, cheaper public parking and make big savings on re-fuelling.
“We believe the rise of the EV will continue in 2021 and worldwide sales could soar 50% this year. From a demand perspective, the costs of ownership and the range available are getting more attractive to drivers, with new affordable models entering the market.” Rico Luman, ING
Arguably the most important reason for the present and predicted future shift in buying approach is the Government’s environmental ambitions.
It has announced plans to end of the sale of all new petrol and diesel cars in the UK by 2030.
Between 2030 and 2035, new cars and vans can be sold if they have the capability to drive a significant distance with zero emissions (plug-in hybrids or full hybrids). From 2035, all new cars and vans will be fully zero emission at the tailpipe.
A poll by the RAC of 3,068 motorists showed a rise in the number of people who plan to make the switch to electric when they next change their car, from 6% in 2019 to 9% in 2020.
What is the difference between the car types?
Electric Vehicle (EV): A car that runs solely on electricity that’s stored in an on-board battery that you charge using a cable. It doesn’t have a petrol or diesel engine, so that means it produces zero emissions.
Plug-in Hybrid Electric Vehicle (PHEV): A car that also has an on-board battery that powers an electric motor. You plug the car in to charge the battery. A PHEV also has a normal combustion engine, which needs fuel, that kicks in once the battery runs out of charge. The engine also generates more electricity to help recharge the battery. Depending on how far you drive, you may only need to use the battery power but the combustion engine is there if you run out of juice.
Self-charging Hybrid Vehicle: A car that has both an electric motor and a combustion engine. You don’t need to plug this type of car in, instead the car charges itself by recycling energy mainly through the braking system. You only get a fraction of the electric range that a PHEV gives you, meaning the combustion engine will be in more regular use. As a result, you will emit more CO2 when driving.
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CAR TAX changes introduced last year have led to a massive 15 percent surge in car leases, according to experts from the British Vehicle Rental and Leasing Association (BVRLA).
New benefit in kind tax rules led to a massive upswing in take-up of plug-in and hybrid vehicles as drivers made use of the extra savings. Nearly one-fifth of the car leasing fleet now relies on electric powertrains as Diesel’s share fell below 50 percent for the first time.
The average CO2 emissions for cars leased by the BVRLA has also fallen from 107g/km to 105g/km in a new low.
The experts said the figures were around eight percent lower than the national average vehicle emissions.
BVRLA Chief Executive Gerry Keaney said the “long-awaited surge” was “expected” after the introduction of new tax rules.
He said: “Quarter three of last year delivered the long-awaited surge in BEV registrations that we expected after the introduction of the zero-rate BiK incentive.”
“A massive 21 percent of new business contract hire car registrations were BEVs, once again demonstrating that the company car sector is driving the transition to zero-emission motoring.”
Lexus UX 300e (Image: blog.lexus.co.uk)
New tax rules saw benefit-in-kind costs drop from 16 percent to zero percent for zero-emissions vehicles from April 2020.
This means drivers do not need to pay any Benefit in Kind charges if their company car emits no emissions.
This figure will increase to one percent in 2021 and two percent in 2022 meaning costs will rise but will still be massively reduced compared to previous values.
The two percent figure will remain in place for a further couple of years up to the 2024/25 tax year to encourage drivers to switch.
In comparison, those who lease a combustion vehicle are still liable for charges of up to 27 percent when securing a model under a salary sacrifice scheme.
Late last year experts at Octopus Electric Vehicles claimed the number of drivers leasing electric vehicles had doubled since the new tax rules were introduced.
The group said they had seen a 91 percent increase in electric car leasing as drivers realised they could save up to 60 percent in some cases.
Fiona Howarth has previously said the updates were a “financial game-changer” for the market.
She said: “Changes to Benefit in Kind tax have been a financial game-changer for EV leasing.
“Add this to brilliant electric cars hitting the market and huge savings on running costs versus petrol cars, and EV’s are a total no brainer.
“It’s no wonder then that we are seeing a huge boom, with the number of companies ordering EVs via our salary sacrifice scheme growing five-fold since April.”
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Between 2023 and 2025, electric vehicles (EVs) will reach the “tipping point” of rapid mass adoption. In 2020, global sales rose 43% compared to the year before. That growth is expected to accelerate as battery prices continue to fall, bringing the cost of EVs down to the equivalent of or below petrol and diesel models – even without subsidies.
McKinsey’s Global Energy Perspective 2021 predicts:
“Electric vehicles are likely to become the most economical choice in the next five years in many parts of the world.”
Norway has already passed the tipping point thanks to tax breaks making electric cars cheaper than gas-powered vehicles. The Nordic country’s market share of battery-powered vehicles reached 54% last year. In most other European nations, that figure is still less than 5%.
Professor Tim Lenton of the University of Exeter explained:
“There’s been a tipping point in one country, Norway, and that’s thanks to some clever and progressive tax incentives. Then consumers voted with their wallets.”
According to Lenton’s latest study findings, EVs in Norway were 0.3% cheaper and had a 48% market share in 2019. However, in the UK, where EVs were 1.3% more expensive, the market share was just 1.6%.
Electric cars ready for free test drives in Milton Keynes (Image: T. Larkum)
Lenton said:
“Once the line of price parity was crossed, bang – sales go up. We were really struck by how non-linear the effect seems to be.”
While Lenton predicts lithium-ion battery costs will fall enough that EVs will match petrol and diesel cars’ prices by 2024-2025, BloombergNEF’s analysis suggests it could be as early as 2023.
Although, as of last year only 4,2% of new cars were electric. But moves like President Joe Biden vowing to swap the entire government fleet of vehicles and trucks to electric models should help us reach the tipping point faster.
James Frith, BloombergNEF’s head of energy storage, said:
“Government grants and tax breaks have cut the cost of electric cars in some countries, but the point when they become cheaper without subsidies is key. That’s definitely an inflection point. [Then] we really see the adoption of electric vehicles taking off and real market penetration.”
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Many drivers, especially those with company vehicles, are discovering the tax benefits of electric cars. Charles Calkin outlines all the considerations for purchase in a rapidly changing market.
According to the Bank of England, Britons have saved over £100bn over lockdown. Expect us to spend a large chunk of that in the coming year.
One decision many people had to postpone last year was buying a new car. For some of us 2020 was the year we planned to go electric. Despite covid-19, more than 76,000 battery-powered electric vehicles (EVs) were actually sold in the UK – around one in 20 of all sales.
But this coming year is likely to see many more silently glide off the showroom forecourts. And the people leading the charge (sorry for the pun), will be drivers of company cars and company owners. That is because of the tax perks.
Appealing benefits
Someone who took delivery of a new petrol-fuelled BMW 3-series company car (146g/km of CO2) last April is paying a benefit in kind (BIK) tax of 32%, rising to 34% by 2022/23. A similarly priced, top-of-the-range Nissan Leaf E attracts zero BIK this financial year, 1% next and 2% the year after. Do the numbers and you will see that the BMW costs over £13,000 more in tax over three years.
For business owners there are additional benefits. I have a number of clients with earnings in the £100,000- to-£125,000 bracket who are contemplating buying themselves an electric company car instead of taking the income. That is because with every £2 that you earn over £100,000 you lose £1 of your personal allowance. It brings your income tax rate to effectively 60%. Paying 0-2% in BIK is a lot more appealing if you are in that position! The total cost of the car can be written off against your profits in the first year, which cuts your corporation tax, too.
BMW iX3
Of course, you do not have to be a business owner to enjoy the lower running costs of EVs. They can be half as much as for petrol and diesel, depending on your electricity tariff and the time of day (or night) you charge the batteries.
The average UK driver will cover 7,400 miles in a year and the average new car fuel consumption is around 50 miles per gallon. So a typical new car gets through 148 gallons of petrol in a year. If the average price per gallon is £5.45 that means the “average” EV driver will save around £400 a year in fuel. And they pay no road tax – adding another £150.EV drivers also enjoy 100% discount on London’s Congestion Charge. That can be worth thousands to the daily commuter, though a lot less to a pensioner in Birmingham!
There are negatives. The government offers a grant of up to £3,000 to buy an EV, as well as £350 towards the cost of installing a home charger, but they are typically as much as £10,000 more expensive than petrol equivalents.
In theory then, you might have to drive your EV for between 10 and 20 years before the lower fuel bills make you better off financially. But bear in mind that the government is determined to drive us to electric. New cars fuelled purely by petrol or diesel will no longer be sold in the UK by 2030. I can easily imagine policy measures to make ownership of fossil-fuel and hybrid vehicles more expensive.
Hybrid solution
Many drivers will of course also be drawn to the altruistic appeal of reducing vehicle emissions – for some it is difficult to put a price on that.
In the end, therefore, it may not be the costs that put people off buying an EV but ‘range anxiety’ – the fear of puttering to a halt on the middle of the M1 because you have run out of energy.
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