UK approves $7,800 incentive for ultra-low carbon vehicles

When the UK's government changed hands back in May, the previously promised subsidy of $7,800 (U.S. at the current exchange rate) for ultra-low carbon vehicles was immediately called into question. Even the UK's current business secretary, Vince Cable, boldly stated that the new government "moved on from the era of subsidies." With a high likelihood that the subsidy would never come to fruition, the UK stood at risk of becoming one of the few remaining major nations to not offer assistance for purchases of plug-in hybrids and electric vehicles.

The automotive industry, environmentalists and eager green car buyers sighed in relief on Wednesday when the UK's government unexpectedly announced that the subsidy was approved intact, starting next January. As Transportation Secretary Philip Hammond remarked:

The coalition Government is absolutely committed to low carbon growth, tackling climate change and making our energy supply more secure. We are sending a clear signal that Britain is open for business and that we are committed to greening our economy. This will ensure that the UK is a world leader in low emission vehicles.

The $7,800 subsidy mainly applies to the purchase of plug-in hybrids, EVs and fuel cell vehicles. The Office for Low Emissions Vehicles will release additional program requirements that will be posted on its site at a later date. The subsidy has been approved through March of 2012 and will be up for review and possible adjustments the prior January. Now, we can officially add the UK to the ever-growing list of countries that offer substantial monetary assistance for advanced technology vehicles. Follow the jump to read more about the UK's commitment to ultra-low carbon vehicles.

Photos copyright ©2010 Sebastian Blanco / Weblogs, Inc.
[Source: Department for Transport]

PRESS RELEASE

Green light to ultra-low carbon car consumer incentive

Transport Secretary Philip Hammond confirmed today that motorists will receive up to £5,000 towards purchase of an ultra-low carbon car from January 2011.

Exceptionally, the Government has agreed the announcement of this incentive ahead of the completion of the spending review to support the early market for ultra-low carbon cars. The Government remains committed to reducing the UK's budget deficit, but understands the need for certainty for investors who are taking long term decisions now on where to launch ultra low carbon vehicles and where to locate future production.

The consumer grant will reduce the up-front cost of eligible vehicles by 25 per cent, capped at £5,000. Available across the UK, it will be open to both private and business fleet buyers.

Transport Secretary Philip Hammond said:

"The coalition Government is absolutely committed to low carbon growth, tackling climate change and making our energy supply more secure.

"We are sending a clear signal that Britain is open for business and that we are committed to greening our economy. This will ensure that the UK is a world leader in low emission vehicles.

"We will review the level of the incentive regularly to ensure that the UK remains competitive and taxpayers get value for money. The first review will be in January 2012, at which point we will set the level for subsequent years."

Business Minister Mark Prisk said:

"The consumer incentive will help Britain become one of the leading centres for the design, development and manufacture of ultra-low carbon vehicles. It sits alongside public and private sector investment in innovation and infrastructure, leading to the creation of new highly skilled low carbon jobs."

Energy and Climate Change Secretary Chris Huhne said:

"Electric and low carbon cars are fun to drive and essential to meet our climate targets.

"That's why we'll need a massive increase in the number of electric and clean green cars on our roads. Because this is new technology the Government needs to step in to kick start the market which is why today's initiative is vital."