Government considering £6000 EV scrappage scheme

Published 09 June 2020

Car buyers could soon be given an automatic discount of £6000 when they trade-in their old petrol or diesel for a new electric vehicle, if Government proposals are given the go ahead. 

The Government is reportedly considering a new scrappage scheme to jump-start the economy in the aftermath of the coronavirus COVID-19 pandemic, with car buyers being offered £6000 to trade-in their old car for a new electric vehicle (EV). 

A report in The Telegraph suggests that plans for the Government-backed scrappage scheme are already at an advanced stage and could be made public by Boris Johnson in early July. It isn't clear how much public money would be required to fund the new scrappage scheme or how long the scheme would run for.

The 2009 Government-backed scrappage scheme cost £300 million, with buyers getting up to £2000 off the price of a new car. 

A few weeks ago the managing director of Ford of Britain, Andy Barratt, said he was unable to keep factories running in the UK without a much needed boost in demand. The SMMT (Society of Motor Manufacturers and Traders) has also urged the Government to put together a funding package to help the car industry bounce back from months of shutdown. 

Demand for new cars has collapsed since the coronavirus lockdown began on 23 March. Registration figures for May were down by 89 per cent, compared to 2019, with 163,477 fewer new cars being sold.

Dealers were finally given the green light to open their doors for business on 1 June, but research by HonestJohn.co.uk has found significant delays for new factory-built stock with some orders facing a minimum six month lead time. 

Comments

hissingsid    on 9 June 2020

My wife benefited from the 2009 Government Scrappage Scheme, which offered £2000 trade in against a new car. She traded in her old Citroen ZX worth perhaps £200 in bad light against a new Daihatsu Sirion, the most reliable supermini most people have never heard of.

The manufacturer contributed £1000 towards the scheme and the Goverment the remaining £1000, which they immediately recouped from the VAT charged on the new car. Smoke and mirrors or what?

Our present car is worth more than £6000, and we will be keeping it until the economies of scale bring down the price of EV's.

gavsmit    on 9 June 2020

As hissingsid said, you've got to be in a certain situation to benefit most from this - i.e. own a tired old banger that's worth almost nothing to trade in (whilst following terms and conditions surrounding current MOT / minimum length of ownership etc.).

But even if you do, it's still a drop in the ocean compared to the list price of EVs.

The only one I could possibly consider on price is one of the Up / Mii / Citigo electric cars - but they are not big enough or have enough range for me (as well as me not being keen on spending £20,000 on a tiny city car).

Something like a Kia e-Niro would fit the bill, but £6,000 (if you have a worthless old banger to get rid of) isn't going to make much of a dent in the £38,000 list price.

I wonder if you still get the £3000 government grant on top of the scrappage grant, but even if you do that's still a huge amount of money to find and not something you're ever likely to recuperate compared to buying an ICE car (no matter how much cheaper EV running costs are, battery longevity / replacement issues aside).

And car manufacturers have been artificially increasing prices of ICE cars hugely in recent months to close that gap, rather than making EVs cheaper - just look at what entry level models of each car costs these days - complete rip-off!

Captain-Cretin    on 10 June 2020

If the government REALLY want to encourage EV uptake, they need to do TWO things.
Firstly, make this scheme pro rata on older EVs/PHEVs, so more people can get on the EV ladder; and they have to EXCLUDE EVs/PHEVs from the cars that can be traded in.

Otherwise we will end up like last time; only the rich can afford to use the scheme, and decent, cheap older cars get scrapped for no good reason, whilst the survivors get so expensive, they arent worth buying.

I would LOVE an EV, and have hankered after one for years, but when I was employed, my employer couldnt see the benefits, and now I am under employed, I cannot afford one, with even the cheapest old Leaf JUST out of reach - unless I want to drive 500 miles to Scotland.
A Leaf is the smallest my lanky frame will fit in; I would prefer a Kia Soul for comfort, but at £12K for the cheapest, they are only a dream.

soldierboy 001    on 15 June 2020

With a starting price of £15,000 including any grant for a 5 seater 5 door hatch, what choice have I got?????????

Robert Afia    on 15 June 2020


The government has announced that the taxpayer is to subsidise electric cars by £6000 per annum. And no costs and benefits have been quantified.

I don’t think the government's promotion of all-electric cars has been thought through.

Cars (and light vans) make up only 44% of total transport fuel costs. Battery electric does not work for the rest (the battery for a container ship would weigh 1 million tons).
Battery production emits large quantities of CO2 (the battery for a Tesla takes 20 tons of CO2 to make, and does not break even on CO2 until 200,000 kms).
The charging points needed for all-electric vehicles have been estimated to cost £30 billion to £80 billion.
All-electric vehicles would need a massively enhanced power distribution network and many more power stations, at enormous cost.
The materials needed for battery production bring great problems of mining ethical issues, recycling dangers, and limited world availability.

Overall, all-electric vehicles would cost the UK taxpayer massive sums and make a very small difference to global warming.

On the other hand, plug-in hybrid cars would seem to bring most of the benefits at modest cost. Planned improvements to petrol engine efficiency and emissions control will mean that they will out-perform all-electric on overall carbon emissions, and bring substantially lower emissions in cities.

Ian Basford    on 15 June 2020

it seems a bit rich ford saying the need help to keep their factories running as despite selling the most popular car in the UK they long ago closed all their UK car factories.

paul robert watson    on 15 June 2020

The government needs to shift some motors somehow,if you have
a 90% slump in new motor sales and spaces to put them is running
out you need to stimulate some new sales to get some movement
somewhere or the whole of the motor industry will contract to a much
lower level,as can be seen by promoting car journeys above the use
of public transport for the first time in decades.

Harrovian    on 15 June 2020

Scrappage schemes are beloved of the dealers, but the actual environmental advantages are dubious, nobody considers the amount of energy & C02 used to make a new car. It is a sad fact that most cars sold in the UK are foreign made, even those made here are made by foreign owners and we make only 3 EV's.
JLR's only EV is made in Austria.......
BMW's Mini is anything but Mini, bigger than a Maxi and much less space efficient plus somewhat expensive even if they do make an EV.
To take advantage of a scrappage scheme and buy an EV one first needs to have the resources to lay out, even if the TAXPAYER helps with £6000.
Ford are being rather silly regarding supporting their UK plants, one is slated to close, the other at Dagenham is a shadow of what it once was and now make diesel engines only.
Government intervention in the UK motor industry has over many years seen it wrecked.

NickNike    on 15 June 2020

Why not use this as a bribe to get car manufacturers to return to the UK, like Ford? If they sell them here then they can make them here.
The electrical energy is largely supplied from polluting power stations so I don't see the sense. EV's are hugely expensive. I like the option to hang on to a car for a few years, maybe even 10 years but I have no confidence the batteries will last that long.
And the scrappage scheme will take tax money from those who cannot afford a new car and give it to someone who is wealthier. Yet another distribution in wealth upwards.
This country has been grossly mismanaged since the 1960's, regardless which party is in. We need a major reset.

GTD 184    on 16 June 2020

A £6,000.00 scrappage scheme for EV's is no different to obtaining a new car discount from the dealer. Whatsmore £6000 off a £70k EV is only going to benefit the affluent types who can afford the out right purchase or HP payments!

If the government want to really help the motor industry they need to reduce VAT and manufacturers need to introduce competative finance on both new and used cars!

Plodding Along    on 16 June 2020

All this is merely to copy what Germany are doing. When France introduced furlough pay for workers, Pfeffel did the same.
Germany are giving a £6 grant for the purchase of EVs so we just copy them. It's not an original idea

Justy    on 16 June 2020

The Toyota Yaris hybrid is excluded for the scrappage scheme however I can get a £4000 off a Hilux ! (SORRY wrong forum)

Edited by Justy on 16/06/2020 at 18:15

Steve McDermott    on 22 June 2020

The last Scrappage scheme was basically a lifeline to the German (although not exclusively) car industry and put a significant number of new diesels on the road which we now say are bad for the environment. The fact is the environmental debt created by the production of any new car is considerable particularly electric vehicles.
Please exercise common sense and not add to the problems we are trying to avoid.

All vehicles should remain on the road as long as possible to reduce overall environmental impact, better to be a bit dirty now for a much cleaner future rather than a bit cleaner now for only a slightly cleaner future. This will allow technology to improve in battery production and longevity as well as the massive investment that charging infrastructure will require. To put it in perspective all homes that want fast chargers of larger vehicles are going to require three phase supplies and local power infrastructure will have to be up graded to match. The cost in terms of cabling and local transformers will be huge not to mention that the national grid will stand everybody charging at once. While we may be able to encourage cleaner electric cars it would be stupid to only solve half the problem.

As someone who is considering going to all electric I'm seriously concerned about the whole infrastructure surrounding electric vehicles, currently if you'll excuse the pun I'm firmly in the plug in hybrid camp.

I do believe electric is the future but it will be a combination of battery and hydrogen fuel cell which is a far better technology as will not require masses of charging stations and current fuel stations could be converted. Basically slow charge at home and fuel cell hybrid for longer journeys.

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