The inimitable terror of the disappearing EV grants (oh, and others too)
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Needing to balance its books, as the nation courses through the later stages of a pandemic, highlights Iain Robertson, is causing grant recipients and administrators more than a few headaches, especially as notice periods are dropped.
There are two trains of thought related to government grants: 1. They are welcomed and 2. They are an unnecessary burden. To be quite frank, I fall into the second category and I believe it is not without due reason. After all, a grant, while regarded as ‘free support’ is everything but. Somebody has to repay eventually, whether through taxation, or other levies, in order for government to balance its books.
As has been proven beyond all doubt, since the advent of the EV evolution and more so since government’s rush decision to cease the sales of all fossil-fuelled vehicles after a notional cut-off date of 1st January 2030, government ‘giveaways’ tend to be a means to subsidise the outgoings of those, whom can already afford things without them. It is not so long ago that a £5,000 ‘discount’ could be provided on any EV, simply for the sake of having one.
However, that figure has been eroded slowly but surely to the most recent £2,500 grant, with a new upper ceiling eligibility of just £35,000 per vehicle, which was introduced importantly without notice in March 2021. The mad rush by carmakers to introduce new models that break through the new monetary ceiling has highlighted that unit margins are generous enough for manufacturers to be flexible. It has also highlighted that, while there are some EVs that are less costly to acquire, an unhappy mean seems to exist in the £35k-plus arena, which does make an EV too expensive for many potential and essential converts.
Interestingly, when government notice was provided of previous reductions in grant availability, the rush by retailers created faux spikes in the market of up to six times normal demand, as applications were rushed in to defeat the new lower barrier; a truly ridiculous situation. Needless to state, there are representative bodies, such as the Fleet Drivers’ Association and some aspects of the specialist media, that find any downward grant restrictions intolerable but they are only trying to appeal to their members, or readers, without contemplating the further reaching implications.
Naturally, the logic behind grant subsidies is understandable, especially when sea-change arrangements are made by government, such as the forthcoming 2030 ban. Our government perceives a need to provide encouragement to vehicle users to change direction by way of financial incentives, which are also provided to those commercial bodies fitting domestic driveway rechargers.
When you consider that the ‘only’ option appears to be via the EV market, even though hydrogen gas and alternative fuels developments are also being ‘rushed’ to market, some of the incentives may be considered important. Yet, many early adopters were more encouraged by a desire to clean up the environment than to obtain concessions, a factor that tends to be forgotten.
While the future use of both petrol and diesel powered vehicles will be allowed post-2030, for up to a further 15-20 years, the massive investments made by vehicle manufacturers in the Internal Combustion Engine (ICE) over the decades are being selectively ignored, with only a few pockets of enterprise (some of which is also grant funded by the way) geared towards the repurposing of the tried and trusted technology.
This entire conversion to EVs, not just by the British government but also by other nations hopping onto the bandwagon has been ill-considered from the outset and is not merely wasteful but may prove infeasible to service, with some nations controlling worldwide supplies of precious metals and the possibility of political ransoms rearing their ugly heads, probably some time prior to saturation points being reached. However, this is all in advance of considering the implications of recycling various aspects of the ‘new’ EV technology, a lot of which remains in unanswered territory.
A positive solution exists. Government should cancel ALL EV grant subsidies with immediate effect. It is action that should be reflected by a motor industry prepared to pare down its profit margins to make its products more affordable, while retaining comparability with outgoing ICE alternatives, as the gap is still significant and unwarranted. Zero grants will level the playing-field, while assisting government in its books balancing endeavours.
