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The UK is ending subsidies on plug-in hybrid vehicles next month

Electric vehicles will still receive a grant, but it will be reduced by £1,000.

Plug-in hybrid vehicles will no longer be eligible for a grant from the government of the UK, while EVs will have their grant reduced.

Antuan Goodwin/Roadshow

The UK is sunsetting emissions credits for plug-in hybrid electric vehicles, and reducing car grants for battery-electric vehicle car grants from £4,500 to £3,500, according to a report published Thursday by Auto Express.

Currently, vehicle emissions are broken down into several categories. Category 1 represents the lowest level of environmental impact, reserved for vehicles that emit less than 50 kilograms of carbon dioxide per kilometer and can travel over 70 miles on electricity alone. Category 2 vehicles can emit 50 kilograms of carbon dioxide per kilometer and can travel between 10 and 69 miles on battery power. Category 3 cars are allowed between 50 and 75 kilograms per kilometer and can go up to 20 miles on electric power.

Clean vehicle grants will end for Category 2 and Category 3 vehicles sold after November 12, 2018, while the grant for Category 1 vehicles is only reduced. 

Rather than simply granting the money back to the consumer directly or having it reflect in their taxes, as in the US, the UK's program issues the grant to the dealer or the manufacturer, which then applies said grant to the purchase price of the vehicle. Cars, vans, SUVs, motorcycles and scooters all qualify for grants, provided they meet the specified emissions requirements and have a purchase price of under £60,000.

Currently, no plug-in hybrid vehicles sold in the UK qualify for the Category 1 grant. Manufacturers' troubles with getting their PHEVs to pass the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) is likely exacerbating this issue.

This news comes on the heels of a Republican Senator in the US introducing a bill that seeks to eliminate the federal electric vehicle tax credit and institute a highway use fee for alternative fuel vehicles.