Granted: Electric vans receive subsidy boost

Date: Thursday, March 22, 2012

Light commercial customers are now in line to benefit from a Government EV grant that will significantly lower the price of vehicles such as the Renault Kangoo ZE, as James Dallas reports
The Government has announced a Plug-in Van Grant that will give van buyers a reduction of 20% – up to the value of £8000 – on the cost of a qualifying plug-in electric van.
This means, for example, that a new Renault Kangoo ZE, What Van?’s Van of the Year 2012, with a starting price of £16,990, will be available from £13,592 (plus the battery lease of from £60 per month) – a saving of almost £3400. Meanwhile, the other high-profile electric van on the market, the Transit Connect Electric, which resulted from a partnership between Azure Dynamics and Ford and currently has an all-inclusive price tag of £39,999, would be available for £31,999.
Andy Heiron, Renault UK’s head of electric vehicles, predicts the move will lead to a “surge in demand”, while Azure’s sales and marketing boss, Gary Whittam believes the grant will boost sales of the Transit Connect Electric because “customers needed an extra bit of support to make the leap to electric technology”.
Transport minister Norman Baker claims the grant will allow operators to purchase ultra-low carbon vans, for which the price would otherwise have been prohibitive.
He says: “Electric vehicles are the arrow head for a low-carbon revolution in motoring and as more models come to market we’ll begin to see sales gather pace.”
The Government has also extended the year-old grant for electric cars, but Baker stresses: “Now it’s time for van buyers to get their chance to go electric. This is great news for businesses given the lower running costs of these vehicles. Fleet buyers tell us that this is one of the most important factors influencing their decisions on what to buy.”
He says the case for introducing an incentive for buyers to choose electric vans is strengthened by the fact that they often operate on fixed-duty cycles, regularly returning to a base where they can recharge.
“The technology fits well with a large portion of the van market that relies on short urban trips to and from base,” Baker says.

To be eligible for the grant vans must emit less than 75g/km CO2, be capable of at least 60 miles between charges (10 miles in electric mode for hybrids), have a top speed of at least 50mph for safety purposes and meet European Type Approval standards.
A spokeswoman for the Department for Transport said once it had assessed the applications it would announce the names of the first vans qualifying for the grant, expected as What Van??went to press. The DfT expects the scheme to go live within two months of the end of January but added that the grant cannot be applied retrospectively, potentially leaving the electric van market in a state of limbo in the meantime as buyers hold off until they can get the discount.
The Society of Motor Manufacturers and Traders claims the Plug-in Van Grant will boost the UK’s environment and economy. Boss Paul Everitt says: “We will reap significant industrial and environmental benefits from establishing an early and flourishing ultra-low carbon vehicle market, attracting high-value investment in R&D, innovation and automotive manufacturing.”
The industry, which has long called for the Government to clarify its policy on alternative fuels, has welcomed the introduction of the incentive to go electric.
John Lewis, the British Vehicle Rental and Leasing Association’s chief executive, says business fleets have spent the last year telling the Government that the van market was “crying out for this sort of low-carbon incentive”.
Although acknowledging that electric vans are expensive,
Lewis claims the combination of the Plug-in Grant, low running costs and significant tax benefits will encourage many fleets to go electric.
But he warns the Government to learn the lessons from its introduction of the plug-in car grant by moving much more swiftly to clarify how the grant will be treated for VAT purposes.
Geoff Allison, who heads up Smith Electric Vehicles and raised the call for vans to be eligible for an electric vehicle subsidy at last year’s Commercial Vehicle Show, agreed that the Plug-in Grant would trigger an accelerated adoption of the technology in 2012.

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