Erin Baker: Why the new EV grant could change everything

Confusion over eligibility

Many OEM PR bosses had never even heard of the SBT initiative, let alone knew if their company’s carbon-reduction goals had been approved by it.

Furthermore, regarding the country of manufacture, more than a few car brands split the production of various parts of the car (chassis, battery etc.) across different plants, and some even use batteries from multiple plants feeding into the same production line for one model. So how can they know which cars are eligible?

Complicating things further, in the same breath that the Government announced the availability of the grant to consumers, it said car companies could apply from July 16. Consumers took this to mean they could buy their EV of choice at the discounted rate from that date.

Only, no one in the industry knew at that point which models would be eligible, so had no clue which cars to discount. (The grant is handled by car brands, who apply the discount before selling to consumers.) The Government then had to issue further guidance that the list of eligible cars would be published in August.

There would be two bands of discount: the full £3,750 amount, or a second-tier £1,500 discount for those deemed “less environmentally friendly.”

The list of eligible cars is now dribbling out in stages from the Government, but most brands have applied their own discounts to match the grant in order to keep pace with competitors.

China, tariffs and collateral damage

It felt, in part, like Chinese tariffs by another name, given China was singled out by the Government during the announcement for fossil-fuel intensive manufacture, and cars built there would not be eligible.

This is tricky in itself, given most Chinese brands are in the process of establishing European manufacturing hubs to avoid such penalties, while a number of Stellantis models – manufactured in more UK-friendly Poland – are excluded because Poland remains overly reliant on fossil fuels for its energy.

It feels like these poor brands are collateral damage for an ill-devised Government bright idea. We await the outcome of various OEM challenges to the policy.

Looking beyond the chaos

So far, then, so bad. Cue widespread frustration and an urgent search for clarification across the automotive industry.

But let’s take a second to row back and look at the bigger picture. The Electric Car Grant is, I’d argue, the most significant piece of automotive news in a decade. Why? Because for the first time, the Government has aligned money and planet in a serious way.

It has moved past the sticky issue that only the rich can afford to make sustainable choices, and beyond the stage where OEMs pay lip service to climate change by boasting about recycled fishing nets in foot mats, to a place where the greenest cars become the cheapest cars.

Why this still matters

This is the holy grail for anyone concerned about the future of the planet: drivers want to save money and save the planet. Any responsible Government should be helping them do just that.

And the most sincere and honest way is to target the carbon emissions produced by the manufacture of electric cars themselves. It’s high time someone brushed aside the cynical virtue-signalling of car brands that talk endlessly about the percentage of recycled plastic in their interiors, and instead pinned them down to answer: What about your energy and water usage at your plants? What about your recyclable steel and aluminium?

This is the unglamorous stuff that doesn’t make the press releases but matters the most.

And finally, here is the British Government, doing just that. Admittedly, it has acted clumsily and may yet face legal challenges from OEMs.

One might also argue that, seeing as the average price of a new electric car is still just shy of £50,000, setting the bar for the grant below £37,000 isn’t very helpful, because most EVs can’t qualify.

But the reverse argument is, in my mind, more important: let’s make the cheaper EVs cheaper still; let’s really bring electric motoring to the masses, and in doing so, let’s allow consumers with lower budgets to have real agency, for the first time ever, in rewarding greener brands.

That feels to me like the right move.