News

The UK government has confirmed it will reintroduce grants for new electric cars, offering discounts of up to £3750.

The new Electric Car Grant, backed by £650 million of government funding, will apply to certain new EVs that are priced at or below £37,000.

A Department for Transport (DfT) spokesperson told Autocar that the discounts could be applied to new EVs as of Wednesday (16 July).

It comes three years after the previous, Conservative-led government axed the Plug-in Car Grant (PiCG), which offered a fixed £1500 off list prices on EVs priced below £32,000.

Since then, demand for new EVs has fallen short of the rise that was forecast at the time – and much of the car industry has recently called for support to stimulate the market, particularly for private buyers.

Compared with the PiCG's fixed £1500 discount, the value of the new Electric Car Grant offered on each model will depend on sustainability criteria, which the government has yet to disclose. Cars deemed to be in “band one” will be discounted by the full £3750 while those in “band two” will receive up to £1500.

The spokesperson said bands (which could expand beyond two) are determined by how much CO2 is emitted in an EV's production is, assessing the energy used in vehicle assembly as well as battery production. Threshold levels have yet to be made public.

They added that contrary to some reports, UK-made vehicles – such as the Citroën ë-Berlingo and from later this year the next-generation Nissan Leaf (pictured below) – would not be given additional benefits. "All products are assessed under the same framework," they said.

The grant will only be offered to manufacturers that have verified science-based targets (SBTs) for carbon reduction and that have emissions scores below a threshold that the government has also yet to define.

When asked for clarification on these sustainability criteria and emissions scores, the spokesperson said: "An SBT [that we consider verified] is one that has been validated by the Science Based Target initiative [SBTi]. Scores are relative to an index based on the carbon intensity of different [power] grids."

Unlike the previous PiCG, car buyers will not have to apply for the grant themselves. Instead, it will fall on manufacturers to submit their EVs for inclusion in the scheme, based on the government’s criteria.

The government’s funding will be allocated on a first-come, first-served basis, and it will publish a list of models that qualify in the coming weeks.

Asked when the grants will come into effect, the spokesperson said: "If manufacturers are confident their application will be successful, sales from before formal application approval would be eligible for the grant provided they comply with all aspects of the scheme and the application was subsequently approved. This applies from Wednesday 16 July."

The £37,000 threshold was chosen because it "targets the more affordable end of the market, ensuring funding for the ZEV transition can reach as many people as possible", the spokesperson added.

Asked why it would not include more expensive cars, such as the £37,500 Vauxhall Grandland Electric, the spokesperson said: "All grants for ZEVs need to offer the best value for money for the taxpayer – we won’t subsidise luxury cars for those who can afford them."

The government said it would fund the grants until the 2028-29 financial year but the scheme could be amended or closed early, with no notice, if cash reserves for it were depleted. "This will remain under review," said the spokeperson.

The move comes as car makers are working to hit the UK’s Zero Emission Vehicle (ZEV) mandate, which this year requires them to achieve an EV sales mix of 28% or be fined £12,000 per non-compliant vehicle. So far this year, just under 25% of all new cars sold in the UK have been fully electric, prompting concern – although manufacturers can also trade reductions in their fleet emissions for de-facto 'sales' of electric cars.

The motor industry has also flagged that EV sales are being propped up by sales to fleets, which receive significant incentives in the form of benefit-in-kind tax breaks.

Mike Hawes, chief executive of industry body the Society of Motor Manufacturers and Traders, has been one of the most vocal proponents for reintroducing an EV grant. He hailed the news as a “clear signal” for prospective buyers to go electric.

“Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four [new cars sold] today, to four in five by the end of the decade,” he said.

Adam Wood, managing director of Renault UK, said the incentives are "extremely welcome" but called for further action to hit the 80% EV sales threshold for 2030 set out by the Zero Emission Vehicle (ZEV) mandate. "It remains critical that car makers, infrastructure providers and government remain united in delivering everything required to make that happen," he said.

A spokesperson for Volkswagen Group UK said it was "pleased" the government was implementing a new grant because it signals a "clear direction of travel" towards battery-electric cars. However, they added it was too early to forecast the grant's impact on its customers, given it has yet to receive full details from the government. 

Delvin Lane, CEO of charger provider Instavolt, said the grant will be a “major contributor” to boosting demand for EVs.

The grant is part of a wider move by the government to increase the appeal of EVs. On Sunday it announced Drive35, a £2.5 billion fund “supporting projects which help the transition to zero-emission vehicle manufacturing”.

This includes cash for manufacturing, R&D, jobs, training and more to “help ensure the UK remains at the forefront of zero-emission vehicle development”, said the government. 

Business and trade secretary Jonathan Reynolds said: “Economic growth is our number-one priority, and by funding our world-leading auto sector, we are creating the right conditions for increased investment, bringing growth, jobs and opportunities to every part of the UK.”  

Renault design boss Gilles Vidal predicts the people carrier could make a comeback to shake up the family car market as designers explore new ways of boosting efficiency and depart from the hallmarks of conventional SUV styling. 

People carriers, or multi-purpose vehicles (MPVs), used to be big business in Europe, with the likes of the Renault Scenic, Vauxhall Zafira, Ford Galaxy and Citroën Picasso claiming a huge share of the regional car market (the segment accounted for more than 10% at one point) on the basis of their ability to accommodate seven occupants in a tall cabin, while occupying a footprint comparable with an estate car.

The decline of the MPV began in 2006 when Nissan launched the Qashqai - effectively the genesis of the crossover segment, which would come to be the default choice for family motoring and dominate Europe's car market. Currently, SUVs account for more than half of all European car sales, while MPVs have dropped to a market share in the low single digits.

But Gilles Vidal says the transition to electrification could bring about a renaissance for the MPV segment, as car makers strive to make their vehicles as efficient as possible and exploit the packaging freedoms of EV ‘skateboard’ architecture.

He said: "SUVs won the battle against the MPVs because MPVs are cars that you need but you don't desire, and suddenly SUVs with the same engines, same weight, same everything - they are shapes that you will desire.

"Now there's an SUV bashing going on in Europe, especially. You would never do MPV bashing because it's a very respectable family car - but it's equally polluting, equally heavy, equally everything, so that's a weird society twist."

Vidal added that the general concept of an SUV "is still attractive today for most people, and still a functional car in terms of size, roominess and practicality". But he said that as cars become more aerodynamic in pursuit of efficiency, we could see a return to lower, sleeker and more MPV-like silhouettes.   

"What will probably happen with SUVs is they will try to be more and more efficient, so maybe slightly lower and better in aerodynamics. They will morph into a very efficient car, less energy consuming, with equivalent habitability and roominess and everything that's probably the trend."

He said Renault's segment-straddling Emblème concept (pictured below), due in production in the coming years as the first of a new-generation electric car line-up, is a “morphing of all of that” – with a raised ride height but a sleeker, lower profile than any of Renault’s current SUVs. 

MPVs are already playing an important role in China, the world’s biggest car market, where manufacturers such as Zeekr, Lynk&Co, Li Auto, Denza and Xpeng have each launched luxurious three-row people movers with technology and refinement to rival limousines like the Mercedes S-Class and BMW 7 Series. 

Vidal suggested that this quest for efficiency could ultimately prompt an all-out rethink for Europe’s most popular type of car: "What could kill SUVs? That's the interesting question. Maybe MPVs could come back in a sexier, desirable shape or form.”

However, he said, MPVs would be broadly comparable with SUVs in terms of energy consumption and material usage: “In the end, they wouldn't be lighter or less energy-consuming - maybe slightly better in aerodynamics, so that would maybe be the win. 

“I see two trends: super-efficient SUV transformation, and maybe a big comeback of sexy, desirable MPVs.”

Autocar has previously reported that Renault was considering a retro revival for the Espace MPV, using the Scenic's AMPR Medium platform as the basis for a sharp-nosed electric seven-seater to rival the Volkswagen ID Buzz. 

However, Vidal said the Renault 4, 5 and Twingo will be the company's only retro-styled designs for the foreseeable future. "For everything else, we will go future. We will go innovative. We want to be super-innovative, but we don't want to be sci-fi, futuristic, and lack personality or emotion.

"We don't want robots. We want emotional cars, which could make them more classical."

Mercedes-Benz has officially revealed its first electric wagon: the CLA Shooting Brake. 

A variant of the German brand’s long-legged EV unveiled in March, the shooting brake is positioned as a roomier and bigger-booted alternative to the standard coupé.

The new, second-generation CLA Shooting Brake is also bigger than the car it replaces. Compared with the first-generation model, it is 35mm longer (at 4723mm) and 27mm taller (1469mm), with its wheelbase stretched by 61mm (2790mm).

As a result, rear head room increases by 7mm (and 26mm more than in the new coupé) and by 14mm in the front. Leg room also improves by 11mm in each row. 

Boot space is 455 litres, which is 50 litres more than in the new coupé but 30 litres down on the previous-generation car. However, the addition of a 101-litre frunk – the new CLA models are the first modern Mercedes cars to offer it – means overall luggage space is up 71 litres. When all rear seats are folded, overall luggage space ramps up to 1290 litres.

Underneath, it’s the same set-up as the CLA Coupé, which draws electricity from an 85kWh battery for 473 miles of range – 19 miles less than the more slippery coupé. It's available in 268bhp entry-level 250+ and 349bhp dual-motor 350 forms. Towing capability is rated at 1800kg in four-wheel-drive guise. As with the standard car, a 1.5-litre hybrid variant will arrive next year.

Inside, the Shooting Brake also mirrors the CLA Coupé, with a technology-centred cabin that features a 10.25in driver’s display paired with a 14in central touchscreen. A further 14in screen for the front passenger is available as an option. The wagon also gets a cabin-length sunroof.

Pricing has yet to be revealed but it is expected to start above the standard car’s £45,000. As standard, the CLA Shooting Brake comes with roof rails and an electric tailgate. Deliveries are set to begin early next year.