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UK gets charged up with a plug-in electric car subsidy

by Kathryn Robbins on February 28, 2010
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UK gets charged up with plug-in electric car subsidy Governments have often used subsidies to help spur the adoption of greener choices. The US had the Cash For Clunkers program, Germany gave subsidies to solar panel owners, and now the UK wants to subsidize plug-in or electric cars.

Up to £230m have been set aside for a “plug-in car grant” that will start in January 2011. The grant works on a sliding scale of 25% of the purchase price of the car up to £5,000 or about $7,600.

The grant program sounds like a great idea to encourage people to put a piece of green technology in their driveways. However, the guidelines set by the government may put the subsidy out of reach for average consumers for some time.

Cars that qualify must pass safety standards, have a minimum top speed of 60 mph, and have a range of at least seventy miles. These sound like sensible standards but only two cars that are currently on the market qualify and come with big price tags.

Tesla’s Roadster and Mitsubishi's i-MiEV couldn’t be more different. One is a sexy two-seater while the other a bit boxy and can fit four. They do have some things in common, namely that they are powered by electricity and they aren’t cheap. The i-MiEV sells for £25,000 (about $38,000) and the Tesla is priced like a new home at £82,000 or $132,000.

Simply put, the government moved a little too fast in adopting the subsidy program. Big players like Toyota and their plug-in Prius and the overseas version of the Chevy Volt won’t be out until at least 2012.

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Even though the government took a stumble subsidizing the pricey Tesla Roadster, they are making smart investments in the creation of charging stations. Three areas including London are set to benefit from the plan. London residents would be the big winners with charging points in 330 car lots, 500 streets, and 6,000 workplaces.

Sure, the government may be subsidizing some pricey electric cars. But if it means that the subsidy could take a gallon-per-block pickup truck or SUV off the road, it could prove to be a worthy experiment.