OLEV grants but for how long?

As is the way with Government subsidies, you never know how long they will last, when they will change or when they will end.

This is as true for the OLEV approved charger installations grant as it has been from any other. And shortly befofe our lockdown OLEV reduced charger grants ‘overnight’ from £500.00 to £350.00. If you benefited from the former subsidy, level you were one of the lucky ones.

But why did it change and when is it likely to change again? Firstly, let’s look at why it has just changed changed.

Why did it change?

OLEV, the Office for Low Emission Vehicles, the Government department responsible for administering the approved charger installations grants, has a finite budget for charger installations. Once this has been used up, there is no more money for subsidies and they stop until the budget is, hopefully, reinstated for the following financial year.

To date (May 2020) the UK has not had enough installations to use up the full subsidy but these installations have been increasing in number rapidly and OLEV predicted that this financial year the budget would run out. As a result they took the decision to reduce the subsidies to £350.00, from £500.00 to ensure as many people could benefit from this as possible. This makes sense in our view.

This brings us onto the second question: When is this likely to change again?

It’s predictably difficult to say, but why it will change again, helps us here. As we’ve said above, there is a finite budget for subsidising charger installations. We’ve already come to the point where there are likely to be more installations than OLEV can subsidise at £500.00. This will happen again, and sooner rather than later.

EVs increase in number

More cars are flooding onto the market as manufacturers push out new hybrids and EVs and many are slated for launch in 2020 and 2021. That’s a lot more of these type of vehicles.

Also, as EVs become more popular we will see more activity on the used vehicle market, where owners can also benefit from the OLEV grant.

Our view is that the approved charger installations grants will stop altogether within the the next 12 months. If they are lowered further people can just buy lower specification, cheaper chargers and not need to go to the trouble of meeting OLEV requirements. With just £1-200 difference between ‘dumb’ chargers and intelligent ones (required by OLEV), any lowering of the £350.00 subsidy would simply make it not worthwhile to administer.

When this happens the Government will have done its job. The grants are there to stimulate EV ownership and if there are too many people needing these, their work is done. It is arguable to say this point has already passed.

COVID-19 business support

Finally, we couldn’t post this without mentioning COVID-19. The Government has made huge financial commitments to business in terms of subsidies during this difficult period and this money has to come from somewhere. It may be that the view that the EV market is already well on its way which may mean they decide to move the charger subsidy budget to somewhere else that now needs it more.

Whatever happens, if you are considering and EV or hybrid, now may be the final time period that an approved charger installation grant will be available to you…

In a final irony, COVID-19 has had such a negative impact on car sales that it is possible that OLEV would not have had to reduce the grants this year! Oh well….

UPDATE: OZEV HAVE ANNOUNCED THAT THE HOME AND WORKPLACE CHARGING GRANTS WILL CEASE 31 MARCH 2022