Vehicle Hire Guides | What does the new business van grant mean for your business?

What does the new business van grant mean for your business?

Good news -- the UK government has extended their Plug-In Vehicle grant for vans and trucks for another 2 years. The Plug-In grant gives businesses a bit of help to buy electric vans and has been around since 2012.

The latest update to the business van grant has made some changes that companies need to know.

Fri, 8 April 2022

plug in business van grant

What is the Plug-in vehicle grant?

The Plug-in Grant Scheme (PIVG) is a government-backed scheme to help businesses with vans and trucks move from fossil fuels to electricity. The grant gives you a discount whenever you buy a low emission vehicle to make them more affordable.

Since 2018, the UK government has made it clear that they plan to reduce the grant for high-cost electric vehicles and switch their attention to other vehicle types and cost ranges. This is to make EVs more affordable and to encourage businesses to make the switch.

How do I get the plug-in grant?

The best thing about the grant scheme is that you don’t have to do anything to get it. The grant is automatically applied to all vehicles that meet the criteria.

There is no paperwork to complete. All you have to do is buy the electric van or truck, then the government reimburses the cost of the grant to the car dealer.

How much is the new business van grant?

That depends on the type of vehicle you’re buying. The new business grant update has updated the list of the different vans you can buy. The grant also differentiates between small vans, large vans, and trucks.

Small vans plug-in grant

  • Grant amount: 35%, maximum £2,500
  • Gross weight limit: 2,500kg
  • CO2 limit: less than 50g/km
  • Travel range with zero emissions: 96km (60 miles)

Large vans plug-in grant

  • Grant amount: 35%, maximum £2,500
  • Gross weight limit: 2,500-3,500kg
  • CO2 limit: less than 50g/km
  • Travel range with zero emissions: 96km (60 miles)

Small trucks plug-in grant

  • Grant amount: 20%, maximum £16,000
  • Gross weight limit: 3,500-12,000kg
  • CO2 limit: less than 50g/km
  • Travel range with zero emissions: 96km (60 miles)

Large trucks plug-in grant

  • Grant amount: 20%, maximum £25,000
  • Gross weight limit: over 12,000kg
  • CO2 limit: less than 50g/km
  • Travel range with zero emissions: 96km (60 miles)

What electric vans can you get?

The latest update to the business van grant has added and removed some eligible vehicles to the list. In short, you can now get a grant for vans of up to 4.25 tonnes that meet the zero-emission eligibility.

Not all zero emission vehicles are eligible for the grant. They must be government approved.

The government updates their grant every year on the 1st of April. You can double-check what electric vehicles are eligible for the grant on their website.

List of eligible small vans

  • Citroën e-Berlingo
  • Maxus eDeliver 3 (short wheel base variants)
  • Nissan e-NV200
  • Nissan Voltia
  • Peugeot e-Partner
  • Renault Kangoo ZE
  • Renault Zoe Van
  • Toyota Proace City Electric
  • Vauxhall Combo-e

List of eligible large vans

  • BD Auto eTraffic
  • BD e-Boxer
  • BD e-Ducato
  • BD e-Relay
  • Citroën e-Dispatch
  • Citroën e-Relay
  • Fiat e-Ducato
  • Innovation Automotive DFSK EC35 T2
  • LEVC VN5
  • MAN eTGE
  • Maxus eDeliver 3
  • Maxus eDeliver 3 LWB Chassis Cab
  • Maxus eDeliver 9
  • Maxus eDeliver 9 MC L3 Chassis Cab
  • Maxus eDeliver 9 LC L4 Chassis Cab
  • Mercedes-Benz eVito
  • Mercedes eSprinter
  • Peugeot e-Boxer
  • Peugeot e-Expert
  • Renault Master ZE (3.1 and 3.5 tonnes)
  • Renault Trucks Master ZE
  • Toyota Proace Electric
  • Vauxhall Vivaro-e
  • Volkswagen ABT e-Transporter
  • LDV EV80

List of eligible small trucks

  • BD e-Boxer
  • BD e-Ducato
  • BD e-Relay
  • Citroen e-Relay
  • Fiat e-Ducato
  • FUSO eCanter
  • Maxus eDeliver 9
  • Maxus eDeliver 9 MC L3 Chassis Cab 65
  • Maxus eDeliver 9 MC L4 Chassis Cab 65
  • Paneltex Z75
  • Peugeot e-Boxer

List of eligible large trucks

  • Electra e-Compact
  • Electra e-Star 27-350

How is the business van grant changing in 2022?

The government updates their grant scheme every year. In 2022, there are a couple of changes that will affect those using the business van grant or buying small and large trucks.

From 01 April 2022, the threshold to claim the small truck grant of up to £16,000 will be increased from 3.5 tonnes to 4.25 tonnes.

Vans up to 4.25 tonnes will be able to claim the large van grant of up to £5,000.

How many vehicles can you claim on the grant?

Every year you can claim up to 1,000 plug-in van and truck grants for your business. The year refreshes on the 1st of April. Here’s what most people won’t tell you about the business van grant, though. There are grant limits for small and large trucks.

iCompario tip:

Email the Department of Transport

Planning to buy a small or large truck? Double-check what grants there are left before making your purchase. You don’t want to miss out on those big savings! You can check what grants are left by emailing the Department of Transport: PluginGrants@dft.gov.uk.

Grant limits for small trucks

For small trucks, there’s only a limited number of big grants available. Luckily if the limit is reached the grant doesn’t go away all together, but the maximum is reduced to £5,000.

The government’s plug-in grant limits are:

  • £16,000 rate: 250 grants available
  • up to 10 grants per business or organisation at the £16,000 rate

Grant limits for large trucks

Just like small trucks, you’ve only got a limited number of the big grants available before the government cuts down. If the limit is reached, the maximum is reduced to £5,000.

The government’s plug-in grant limits are:

  • £25,000 rate: 100 grants available
  • up to 5 grants per business or organisation at the £25,000 rate

What about vans and cars for personal use?

The UK government’s plug-in grant applies to all eligible vehicles that you buy from a dealer. The grant applies whether you’re purchasing a van, truck, car, or moped for personal or business use. The rules are different for each type of vehicle, though.

The grant amount for cars has been reduced in the latest government update. The grant is now 35% of the price, up to a maximum of £1,500 for eligible cars. As electric cars become more affordable and popular, we believe that the government is shifting their focus in reaction to the market.

iCompario tip:

Look into all government EV grants

The business van grant isn’t the only scheme available to you. You can get money off buying and installing [EV charging points in your home] too. Unlike the plug-in grant, this is a scheme you’ll have to actively apply for.

Why the UK government has extended the plug-in grant scheme

The extension of the business van grant scheme isn’t a big surprise when we look at the UK government’s plans for transport. The Department of Transport is fully committed to phase out fossil fuel vehicles (petrol and diesel). So, incentives for electric vehicles and more congestion charges are to be expected.

We’ve broken down all the reasons the new business van grant has come to be to help you prepare. Here’s what you need to know.

Emissions from vans and trucks

The government is likely eager to push funding towards vans and trucks as they account for a large percentage of UK transport Co2 emissions. Vans account for 17% of all Co2 emissions from transport in the UK and HGVs aren’t far ahead at 18%.

The UK government’s own analysis found that in the past few years, most modes of transport have decreased their CO2 emission levels. Except for vans. ‘Van emissions have increased by 8 MtCO2 e since 1990 (a 65% increase)’. It’s no wonder then that we see the plug-in grant focus shifting from electric cars to vans and trucks.

Cutting back on oil

In 2022, we all know how volatile the oil market can get. While in the UK we only get around 6% of our oil from Russia, any price changes affect the whole of the market.

According to the Department of Transport, extending the business van grant ‘will help make the UK less reliant on imports of foreign oil, improving the security of our energy supply and reducing our vulnerability to volatility in global energy prices.’

Whether the extension and changes were a direct response to the current oil market or a planned change long in advance, we think it’s clear that the plug-in grant is here to stay.

Should businesses use the plug-in vehicle grant?

We know how tough making the switch to electric can be. But if you’re going to buy an electric vehicle, you may as well benefit from the scheme. Plus, you wouldn’t be the first business to make the change.

In 2021, the UK bought 15,151 electric vans – the highest number in Europe. The only ones close to that were Germany and France with over 12,000. The report was released by the European Automobile Manufacturers’ Association (ACEA) in March 2022.

The government has also stated that there have been 4 times as many grant applications compared to 2020.

Of course, petrol and diesel vehicles still dominate the market. But at iCompario we see electric vehicles growing. If your business is planning on buying a plug-in vehicle, there’s no better time to do it.

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