British Government grant cut costs thousands of PHEV sales

October 11, 2016

A UK Government decision to slash clean vehicle grants by 50% will result in sales of Mitsubishi's Outlander plug-in hybrid being reduced by 2,000 units in 2016, the firm’s managing director has said. The government changed its grant system in March to restrict the full grant to cars emitting 50g/km or less with an electric range of 70 miles or more, effectively limiting it to pure battery electric vehicles only (BEVs). Plug-in hybrid electric vehicles (PHEV) which do not meet the criteria saw the grant available slashed from £5,000 (€5,550) to £2,500 (€2,775), which was too much too soon according to Lance Bradley, UK managing director of Mitsubishi. He told Business Car: ‘The impact of the changes to the grant was pretty severe. One of the things we have always said is not to change things too quickly. Cutting the grant was too much. It’s a shame because the market is not established yet – it probably could have done with another 12 months.’ Bradley would like to see the government using a tapered approach to removing grants to avoid a sudden collapse in demand when government funding is cut. The Outlander PHEV has been one of Mitsubishi’s biggest successes, driven by the fact that the company benchmarked the car at the same price as a diesel model once grants were included. The firm has five new SUVs planned in the next five years and Bradley said plug-in technology would continue to feature throughout the range, with a pure EV expected to be available by 2020.

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