The grants contribute 25 per cent towards the purchase of battery electric cars or plug-in hybrids electric vehicles, up to a maximum of £5,000 per car. In total £43m has been allocated – sufficient for an initial 8,600 electric cars – starting in January 2011 and running until the end of March 2012, with a review slated for January 2012.
The coalition’s plan is a sizable step back from the £230m funding announced by the Labour government in February, but is nonetheless a major leap forward in making electric cars more affordable in the short term.
Those electric vehicles eligible for the revised scheme are yet to be confirmed, but the original scheme was set to exclude slow and fragile electric runabouts such as the Reva G-Wiz, which are legally classed as four-wheeled motorcycles rather than fully fledged cars.
The criteria laid out by Labour were:
* Pure battery-electric, plug-in hybrid or hydrogen fuel cell power source
* Zero emissions in use, or less than 75g/km for plug-in hybrids
* At least 70 miles range for battery cars, or 10 miles on battery alone for plug-in cars
* At least 60mph top speed
* At least three years or 75,000 miles of vehicle warranty
* At least three years warranty on the battery, with five years available on demand (presumably at additional cost)
* Reasonable battery life after three years (‘reasonable’ to be defined)
* Crash-tested to European, US, Japanese or an equivalent standard for cars
* Compliance with electrical safety standards both when in use and when recharging
The grant will be available to both business and private buyers, while business buyers will also benefit from other financial incentives, such as zero-rated benefit-in-kind tax, plus the facility to set 100 per cent of purchase cost against corporation tax in year one.
A number of manufacturers are preparing to bring electric cars to market that will qualify for the grant, including Vauxhall, Ford, Mitsubishi, Toyota, Renault and Nissan.
In the last month, BusinessGreen.com has been able to take a close look at two of the contenders: Renault’s Fluence ZE and Nissan’s Leaf, both of which are pure battery electric vehicles capable of carrying five adults and travelling up to 100 miles on a single charge.
Both cars are ‘C-segment’ vehicles, of roughly the same proportions as a Ford Focus or VW Golf. However, the Nissan Leaf is a five-door hatchback – the most popular format for cars of this size in Europe – while the Renault Fluence ZE is a booted saloon.
The Leaf is largely a clean-sheet design, built as an electric car from the outset, while the Fluence ZE is a modified version of a conventional model.
The two electric vehicles look very different but they share some similarities under the skin. Their two makers are partners in the Renault-Nissan Alliance, a wide-ranging collaboration established in 1999, so engineers pooled their efforts on some control systems, for example.
Lithium-ion battery cells for both electric cars will initially be made in the same Japanese factory, with production from a new UK factory due to supply both manufacturers from 2013.