Discounts and incentives

What financial incentives are there to buy electric?

By Gavin Conway on July 25, 2011 4:05 PM

Many national governments and local authorities are keen to incentivise the uptake of electric vehicles. In the UK the Office for Low Emissions Vehicles’ Plug-in Car Grant offers 25% off the value of a number of cars up to a maximum of £5,000. The vehicles that qualify right now are:

Make and Model

1st UK Deliveries

UK Price after grant

Mitsubishi i-MiEV

January 2011


Smart Fortwo electric drive

January 2011


Peugeot iOn

January 2011

£415/month + VAT

Nissan LEAF

March 2011


Tata Vista

March 2011


Citroen CZero

March/April 2011

£415/month + VAT

Vauxhall Ampera

Early 2012


Toyota Prius Plug-in Hybrid

Early 2012


Chevrolet Volt

Early 2012


Renault Fluence ZE

Autumn 2012

£17,850 + £75/ month battery lease

This grant won't last forever, and is under review annually.

Electric vehicles are also exempt from Vehicle Excise Duty (aka road tax), which can be up to £460 for a very high emissions petrol car, and of course fuel duty (tax on petrol and diesel) is bypassed completely. Pure electric cars are also exempt from company car tax until April 2015. And in London, you don’t have to pay the city centre Congestion Charge of £10 per day.

Other less formalised incentives in the UK include free parking in some designated areas – this is most prevalent in London at the moment.

In the U.S., the American Clean Energy and Security Act of 2009 granted tax credits for qualifying EVs such as the Nissan LEAF and Chevrolet Volt. The total amount of this credit is currently $7,500. There is also a federal tax credit equal to 30% of the cost of installing a home-based charging point, to a maximum amount of $1,000.

In addition, many individual states have supplementary incentives on top of the federal grant. California, for example, offers an extra $5,000 purchase rebate for qualifying electric vehicles, as does Hawaii.

To make the ownership proposition even more attractive, many states, including Florida, Georgia, California, New Jersey and Arizona make it legal for lone EV drivers to use carpool lanes (theses are usually reserved for multiple-occupancy vehicles).

In the Canadian province of Ontario, the government offers a rebate between $5,000 and $8,000 CDN depending on battery size. Another interesting twist is that Ontarian motorists driving plug-in hybrids or pure electric cars will be allowed to use carpool lanes and in future, their vehicles will be issued special green-coloured license plates (the ultimate eco-status symbol?).

The vast majority of western European nations offer tax incentives of varying amounts. For example, France, Ireland and Romania offer a €5,000 grant for EV purchase. Spain goes one better with a €6,000 grant applied to EVs.

The majority of incentive schemes have a limited shelf life, though. Most will be phased out over time as EV ownership becomes more popular – if you’re thinking of becoming an EV motorist, now’s the time.