First Commercial ‘Victim’ of UK EV Grant Cuts

The UK government’s shock decision not to renew grants for plug-in hybrid vehicles and to reduce the grant to BEVs has claimed its first commercial victim.

Medium-term vehicle hire specialist Meridian Vehicle Solutions has announced its plans to switch a large part of its fleet to plug-in hybrids have been shelved with the evaporation of government assistance. Carmaker Kia has already told TU-Automotive that government help for ‘clean’ vehicle technology is essential if it is to flourish in the future.

The company has existing plug-ins on order including the Mini Countryman PHEV, BMW 530e, BMW 225xe and Kia Niro, that will still attract the grant, but says that future additions are looking very unlikely in the current circumstances. Phil Jerome, managing director, explained that owing to the company’s time sensitive business model the lack of grants will hit it harder than most other fleets and would price the technology out of the market for its customers.

He said: “This is really disappointing. There is rapidly growing demand from fleets for plug-in hybrids and we made a strategic decision earlier this year to meet that need. Really, we are trying to establish these vehicles as the mainstream, even the obvious, fleet choice. However, by removing the grant, the government has effectively added £2,500 ($3,269) to the purchase price of any future cars that we were thinking of adding to our fleet. Our hires generally run from three months to a year and, over that period of time, it puts hundreds of pounds every month on every vehicle, meaning that the pricing is no longer commercially viable.”

Jerome said that the government’s move was hard to understand and added to a general feeling of instability around current fleet planning. “The grant removal will apply in just a few weeks, so it gives fleets almost no chance to plan and consider what we are doing in a strategic manner.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_

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