UK government unveils £5,000 electric car incentive program
by John Neff on Apr 16th 2009 at 10:02AM 
The UK government has announced a £250 million ($372M USD) incentive program designed to get more plug-in and electric vehicles on British roads. The heart of the program is rebates of up to £5,000 (nearly $7,500) for purchases of full electric or plug-in hybrid vehicles. This could be good news for companies like Mitsubishi, Nissan and General Motors. The Japanese automakers are planning to introduce battery electric cars over the next two years and General Motors plans to launch the Vauxhall Ampera (a rebadged Chevy Volt) in 2011. The program is aimed primarily at next generation full function electric vehicles like the Ampera and Mitsubishi iMiEV rather than the existing crop of low speed vehicles like the Indian-made G-Wiz.
In addition to subsidizing car purchases, the government wants to make life a little easier for EV drivers by putting in more public charging outlets. £20 million (about $30M) of the project is set aside for building out the country's infrastructure of charge points. Thanks to Brother_Will for the Tip!
[Source: BBC, Photo by Oli Scarff/Getty]
Get a WordPress.com Blog
Reader Comments (Page 1 of 1)
BoxerFanatic 10:48AM (4/16/2009)
Exactly why does the British government want to subsidize companies from other countries for this?
Because they have already had their shot at government bail-outs of the british car industry. British Leyland.
And guess what is left. NOTHING but a cottage sports car industry of guys in their workshops building a couple of cars the way they want to, and foreign owned remnants of factories.
Rolls -> BMW (germany)
Bentley -> VAG (germany)
Lotus -> Proton (malaysia)
Jaguar -> Tata (india)
Land Rover/Range Rover -> Tata (india)
Aston Martin -> international conglomerate of owners after Ford
Mini/Triumph -> BMW (germany) Triumph no longer utilized as a nameplate
MG/Rover cars -> SIAC (iirc, china)
TVR -> russian guy, dissolved.
Morgan and Bristol might still be entirely british owned, but they are tiny cottage industry companies.
So, after the British have done what we are doing now, and the results are clear, they still want to pump government subsidies to car companies outside their borders... Sounds about the speed of western government policies as of late.
Nobody has learned a damned thing, have they?
Reply
Bloke 11:26AM (4/16/2009)
Evidently you don't understand how companies are structured. While there are some small independent companies operating in England & Wales, there are many other larger manufacturing subsidiary companies with foreign parents. In each case, the company is registered and articled in England & Wales, or in Scotland, which has its own company registration structure, and operatings in accordance with UK company law.
So, the likes of Ford (GB) Ltd, Jaguar Cars Ltd, Land Rover Ltd, Vauxhall Motors Ltd, GM (UK) Ltd, GMM Luton Ltd, Nissan Motor (GB) Ltd, Honda UK Ltd, Rolls-Royce Motor Ltd and Toyota Motor Manufacturing (UK) Ltd will all benefit - not to mention the flotilla of small independents such as Noble, Bristol, Ginetta, Westfield, Caterham and Morgan. In each case, these are all British companies.
It doesn't matter whose name is on the share certificate or their nationality; what matters is where the company is articled.
Bloke 11:42AM (4/16/2009)
Incidentally, TVR isn't a dissolved company. It was split into three different companies, two of which are related. Both Blackpool Automotive and TVR Motors Ltd are active and the latter was - at least recently - building the Sagaris again in small numbers.
BoxerFanatic 12:18PM (4/16/2009)
Exactly how many of those companies, with a british presence, or the small british companies you mention, like caterham and ginetta, make electric cars? Do they even make 500 units a year, each, total? I like cottage sports cars, actually, but government incentives cost taxpayers, whichever tax base that might apply to. People who pay more taxes buy fewer cars, not more cars.
Do the British taxpayers like the idea of funding this program?
Mitsubishi, GM, and Nissan are all non-british companies, which the article names, and most of them don't yet build an electric car for sale, even if there are some under development...
The people in the US that clamor for US bail-out of our domestic industry all talk about foreign companies exporting cash value to their country of origin, if people mention Japanese or European companies who manufacture cars on US soil... Do the pro-government-oversight folks in GB also make those claims?
It seems a trend that what GB has done, the US is doing, or will do, especially when it comes to socialist and leftist government involvement.
Polly Prissy Pants 1:42PM (4/16/2009)
"Exactly why does the British government want to subsidize companies from other countries for this?"
Maybe the want cleaner air and less imported oil? Just a guess.
Bloke 12:28PM (4/16/2009)
You still don't get it.
Nissan Motor (GB) Ltd is a British company, and a subsidiary of a Japanese parent company. However, that Japanese parent company's only liability to the subsidiary legally is the amount paid up on the issued ordinary shares of the subsidiary. Everything else on the balance sheet of the subsidiary is owned by and the responsibility of the subsidiary company.
GM (UK) Ltd and Vauxhall Motors Ltd are also British companies - the latter is expected to produce the Ampera at Ellesmere Port following discussions between GME and the British government which began at last year's London Motor Show. The British taxpayer will be funding programmes benefitting British companies and British productivity - it's no different in concept to any other grant or incentive.
Reply
Bloke 12:38PM (4/16/2009)
And the programme is devised for existing British companies - whether they build or are developing electric vehicles or not - as well as foreign corporations such as Mitsubishi to attract them to develop British manufacturing subsidiary companies.
It was Government grants in the Thatcher years which lead to Nissan's enormous investment in the north-east of England, setting up a British manufacturing subsidiary company, which began the hugely successful enterprise in Washington, Tyne & Wear.
This scheme follows similar lines.
Bloke 12:48PM (4/16/2009)
I thought this article was referring to the grants the Government announced last year for electric vehicles being produced in the UK which was based on production numbers.
This is a Government-funded customer rebate, rather like the tax credits offered in the US. The country of origin of the vehicle is irrelevant, in the same was that regular fuels are taxed at various levels - again, irrespective of the vehicle using the fuel.
Blacknimbus 12:35PM (4/16/2009)
How do they plan to power the grid for all of these electric cars? Nuclear? Oil-fired? Coal burning plants?
Wind and sunlight can't fill the need. Not yet anyway and not for the near future.
Reply
Swede 12:55PM (4/16/2009)
The United Kingdom currently sits at 40% natural gas, 30% coal and 20% nuclear power. Building more nuclear power is the logical step, and a series of EPR-reactors would be the most beneficial.
BoxerFanatic 12:48PM (4/16/2009)
Bloke,
I GET IT. I was making a point, which it seems that you have entirely sidestepped.
Whenever things like that are mentioned in the US, it doesn't seem to matter, if Toyota, Honda, BMW, Nissan, Subaru, Mercedes, VAG, or anyone else manufactures cars on US soil, they are not considered domestic, and pro-domestic-bailout advocates cry about people considering those cars over US brand cars, which are sometimes built in Canada or Mexico. They cry about money flowing to the parent company outside of the US, regardless of where the business activity occurs on US soil.
The BIGGER point that I was trying to make, is after the British government has DECIMATED the british mainstream auto industry, they still are going for government hand-out programs to promote this or that, at cost to the taxpayer.
The point I was trying to make is FAR more political than automotive or corporate.
DO THE BRITISH TAXPAYERS LIKE PAYING FOR THESE GOVERNMENT PROGRAMS??? I am curious.
There seems to be a contingent in the US that does like for US taxpayers to pay for the US auto industry... even though we are on the same road that decimated the british car industry in the 70s and 80s, and let the unions drive the companies to other countries, even if they have some infrastructure left on British soil.
The US is repeating history that has already happened to GB, and a lot of it is POLITICAL activities overshadowing economics, which is the problem.
Reply
Bloke 1:01PM (4/16/2009)
"Whenever things like that are mentioned in the US, it doesn't seem to matter, if Toyota, Honda, BMW, Nissan, Subaru, Mercedes, VAG, or anyone else manufactures cars on US soil, they are not considered domestic, and pro-domestic-bailout advocates cry about people considering those cars over US brand cars, which are sometimes built in Canada or Mexico. They cry about money flowing to the parent company outside of the US, regardless of where the business activity occurs on US soil."
That's because the Americans who generally participate in car-related forums and websites are not experts in corporate law or accountancy. A company's domicile is based on where it is articled, not the nationality of its shareholders - and that rule applies globally. It's great to be a passionate car enthusiast, but the issue of determining corporate domicile has nothing to do with cars whatsoever.
The only way a parent company can extract money from a subsidiary is by way of voting itself a dividend or via a management charge. The latter do not usually attract tax relief for the subsidiary, but do count as taxable income for the parent. and therefore kept to a minimum. Dividends however can only be paid from post-tax profit and assuming the subsidiary has the cash to do so - remember, profit is not the same as cash in the bank. It's rare that a parent company will extract a dividend from a subsidiary, and usually in exceptional cases like how GM did recently from its Chinese subsidiary. There are also often Advance Corporation Tax implications for dividend payouts in many jurisdictions. Usually, retained profits in a subsidiary remain in that companiy's reserves for future investment by the subsidiary. "Profits flowing in/out of the country" is primarily laymen's BS.
Bloke 1:06PM (4/16/2009)
"There seems to be a contingent in the US that does like for US taxpayers to pay for the US auto industry... even though we are on the same road that decimated the british car industry in the 70s and 80s, and let the unions drive the companies to other countries, even if they have some infrastructure left on British soil."
The British car industry isn't decimated. It builds as many cars today (1.6m annually) as it did when MG Rover was in existence ten years ago. Only the recession has diminished output for the time being.
The UK taxpayer benefits from programmes such as these - a cleaner environment, less demand for fossil fuels, and further modernising the infrastructure. It makes for a more progressive society, instead of one full of selfishness forever arguing the toss as to who should pay for what and leaving huge swathes of the population suffering as a result.
Reply
BoxerFanatic 2:28PM (4/16/2009)
I was not talking about MG rover 10 years ago. MG/Rover was the only mainstream british company operating at that time, after MG and most of British Leyland failed in the early 80s. THAT is when the british car industry was decimated, and got substantially went out of business or got sold off. It may not have been entirely shuttered, but it hasn't come back to what it was, and most of the nameplates are property of other companies in other countries.
I was talking about the 1950s, 60s, and 70s, when British cars were in their full swing, post WWII.
I have a close relative with a 1974 MG. We couldn't get a 94 MG. and now MG is chinese.
I may not have a background in corporate law, or first hand knowledge on the ground in England. I will defer to you on those points if you do.
But it is sheer denial if you think the british car industry survived the late 70s, 80s, and 90s intact, when most of it got sold off or shuttered, even if some cars are still built on british soil. 1.6 million units? what fraction of the western world/far-east automotive marketshare is that? What was the marketshare in the mid 60s for the British brands?
Don't get me wrong. I like british cars, past and present. That is why I think it is so unfortunate what happened to the british industry, and I would prefer that others, including the US learn those lessons, and not repeat those unfortunate errors.
It MATTERS, because the US car industry is headed very much down the same path now as the british industry did in the late 70s and 80s, and whatever is left, will be weaker than it has historically been, and could possibly end up being owned by foreign interests.
Fiat is doing a deal with Chrysler right now, and Nissan is rumored to be interested in Dodge trucks to become Nissan Titans. That is just the start, as history shows us. GM is talking about shedding too much of it's portfolio, which it may not recover from, and some of those being recoverable nameplates being sold off, or shuttered completely.
But more importantly, our government is getting more invasive, as the British government has, and most of western european nations have even moreso. That is another set of errors I don't want to see repeated.
Bloke 3:14PM (4/16/2009)
'I was not talking about MG rover 10 years ago. MG/Rover was the only mainstream british company operating at that time, after MG and most of British Leyland failed in the early 80s. THAT is when the british car industry was decimated, and got substantially went out of business or got sold off. It may not have been entirely shuttered, but it hasn't come back to what it was, and most of the nameplates are property of other companies in other countries."
I completely disagree with you. A country's car industry does not hinge on whether it is indigenously domestic or comprised of subsidiaries of foreign parents. What it does hinge on is the productivity and efficiency of the companies involved and their contribution to the country's economy. Ten years ago, Nissan GB and Honda UK had been building cars for over a decade, and Toyota UK had been producing the Carina E for several years. PSA were still building at Ryton, and Ford and Vauxhall had existing plants in various parts of the country. The British subsidiaries of Toyota, et al are far more productive and beneficial to this country's economy than BL or the Rootes Group ever were. THAT's what matters. Being hurt by the name on the share certificates is wrong-headed and ultimately, it means nothing. Business is business no matter what.
Much of the world could get MGs in 1974. Much of the world, with a few notable exceptions, could get MGs in 1994 and 2004. MG had no UK domicile after MG Rover folded in 2006, but I'm thankful the Chinese have kept the marque alive and are now returning production to Longbridge via a new UK subsidiary. The former British Leyland and its greedy unionism were hardly proud symbols of British business, and the present status quo is far more promising.
I find it interesting that you, and many other right-wing Americans, see a Government that actually governs as "invasive." It's simply doing what it was charged to do - protect the interests of its country and its people in ways it sees fit.
Reply