By ROB HULL, MOTORING EDITOR
The Government's Electric Car Grant (ECG) is barely a month old and already ministers have introduced a new stipulation to restrict the number of vehicles qualifying for discounts.
Launched on 15 July, the ECG is Labour's desperate bid to encourage the take-up of electric vehicles following months of slowing demand from private buyers.
The scheme offers to slash the price of some new EVs by as much as £3,750 in the hope that making them more financially appealing will translate to an acceleration in the number of motorists making the switch.
To ensure grants are 'targeted' only to affordable EVs, only those starting from under £37,000 are eligible. Manufacturers too must adhere to stringent sustainability criteria in order for their cars to qualify for the discounts.
With 28 models so far confirmed for grants, the Department for Transport last night introduced a new 'price cap' to the rules to cut more luxurious and well-equipped EVs out of the deal.
This will ultimately add yet more confusion to the scheme, which has already drawn criticism from industry experts and dealers for being convoluted and a drain on taxpayer funds.
The Government's Electric Car Grant is barely a month old and already ministers have introduced a new price cap to restrict the number of vehicles qualifying for discounts
The ECG, which is backed by a £650million investment until 2028-29, requires car manufacturers to apply for eligibility for their battery-powered models priced below £37,000.
The DfT has been determining which of these cars qualify based on additional green criteria, namely the emissions produced during the battery's manufacturing and vehicle's assembly, as well as the carbon intensity of the electric grids in the countries where the car is made.
Those that fail to meet the Government's minimum threshold are excluded from the scheme entirely, with all Chinese brands expected to be omitted on these grounds.
EVs deemed suitably green are then judged on a two-tier system: the most sustainable are categorised as 'Band 1' and receive the full grant amount of £3,750; those not quite meeting the highest requirement are demoted to 'Band 2' with smaller discounts of £1,500.
Of the 28 models announced so far, just two - the Ford Puma Gen-E and E-Tourneo Courier - have met the demands of Band 1 eligibility.
And a new stipulation added at midnight means even fewer EV models will be awarded discounts.
Of the 28 models announced as eligible for the Electric Cart Grant, just two have received the full £3750 discount. One is the Ford Puma Gen-E pictured
The DfT also confirmed this week that the Ford E-Tourneo Courier has qualified for the full £3,750 ECG
The introduction of a £42,000 price cap aims to ban more luxurious trim levels from the scheme.
Confusingly, eligibility for each model is determined by the cheapest version of what the DfT calls the 'interpolation family'. This essentially means models underpinned by the same drivetrain combination of battery and electric motors.
For instance, front-wheel-drive versions of the Nissan Ariya have been confirmed for Band 2 - and therefore subject to a £1,500 discount - based on the entry 'Engage' trim level costing less than £37,000.
The same £1,500 discount was therefore applied to all other versions of the FWD Ariya - even those well above £37,000.
However, the application of the price cap means the highest trim level - Evolve - which is priced over £42,000 no longer qualifies because it is deemed too expensive.
While it shares the same electric drivetrain as the Engage trim, it benefits from a number of luxury features, including an electric panoramic sunroof, ventilated front seats, and a high-end sound system.
As an example of how the price cap works, the front-wheel-drive versions of the Nissan Ariya have already been confirmed for Band 2 - and therefore subject to a £1,500 discount - based on the entry 'Engage' trim level costing less than £37k
The same £1,500 discount was therefore applied to all other versions of the FWD Ariya - even those above £37k. However, the application of the price cap means the highest trim level - Evolve - which is priced over £42k no longer qualifies because it is deemed too expensive
Ministers believe buyers capable of spending over £42,000 on an EV have suitable funds not to be awarded subsidies funded by taxpayers.
However, for some models, the price cap could rule out advanced safety features as well as luxuries, with manufacturers typically reserving the latest in crash mitigation systems for their higher-specification models.
A DfT spokesperson told the Daily Mail: 'The Electric Car Grant is putting money back in people’s pockets whilst also providing a vital boost for industry.
'The maximum price limit ensures only eligible cars priced at the lower end of the market can qualify for the discounts, ensuring government support is targeted.'
Due to the prolonged application and review process of the ECG, the Government has only been able to announce qualifying EVs in weekly drips and drabs.
It says it is doing so 'as fast as it can'.
This, however, has created a lot of delays, scepticism and frustration.
It took over three weeks for the first four eligible models from Citroen to be announced. The six latest cars qualifying were confirmed on Thursday.
Dealers have reported to trade magazine Car Dealer that confusion surrounding the scheme is causing 'chaos' in showrooms, with drivers withholding purchases while they wait to see which cars will receive the grant - and, more importantly, which models are eligible for the higher Band 1 discount of £3,750.
SMMT chief executive Mike Hawes earlier this month said a 'dip' in registrations in July has been exacerbated by consumer's postponing orders of new EVs over 'certainty' about which models will have their prices reduced.
Jon Lawes, managing director at Novuna Vehicle Solutions, also criticised the Government for its 'rushed rollout and limited industry consultation' on the scheme, which he says has caused major confusion for consumers and car makers alike.
'Manufacturers are scrambling to work out which models apply while consumers are left in limbo, wondering if they’ll actually get up to £3,750 in savings – risking a slowdown in demand, particularly in private sales, which continue to lag behind fleets,' he said.
'And excluding used EVs is a missed opportunity to improve affordability and buyer confidence.'
Dealers have reported to trade magazine Car Dealer that confusion surrounding the scheme is causing 'chaos' in showrooms, with drivers withholding purchases while they wait to see which cars will receive the grant
Peter Smyth, director of retailer group Swansway, told Car Dealer that the ECG's roll-out has been 'shambolic', adding that it should have been far simpler than what he dubbed a 'typical government bureaucratic mess'.
Other retailers said the grant had been 'ill thought out' and created a logjam of customers.
Some motorists, failing to understand the application process in place for manufacturer, have reportedly walked into showrooms demanding the £3,750 discount in full, irrelevant of whether the DfT has confirmed if the model they want qualifies or not.
Another boss of a 'large dealer group' criticised the approach of announcing small batches of new eligible models on an almost weekly basis, saying the DfT should instead provide a full comprehensive list.