Car makers and consumers face more uncertainty following news that the Department for Transport is revising its grant funding for low emission vehicles. The announcement, which will affect the Powershift, CleanUp and New Vehicle Technology Fund programmes, threaten further to undermine confidence in schemes designed to promote the take-up of cleaner vehicle technologies.
The DfT maintained that changes must take place to comply with European rules on state aid. While there is no detail on the level of funding adjustments or the structure of new schemes, the industry fears the level of grant funding will be slashed. This would come on the back of 30 per cent cuts made in 2004 funding for Powershift and CleanUp programmes.
Commenting on the news SMMT chief executive Christopher Macgowan said, ‘This is a real concern to the industry and once again sends out all the wrong messages to those who want to buy and market cleaner vehicle technologies. The reality is that any new scheme developed to comply with EU state aid rules will take time to establish. Industry needs a stable framework of incentives so that products can be planned and launched effectively.’
Manufacturers will now seek urgent clarification from DfT on a number of points that affect their development programmes and grants offered to new car buyers:
- Full details of criteria under which grant applications can be made
- The value of grant awards from April 2005 onwards
- A clear timetable for the introduction of new schemes next year
Today’s announcement is the latest in a series of problems that have hit support programmes. In the final quarter of 2003, grant funding dried up out without warning while the creation of two month ‘administrative windows’ for grant applications in 2004 have created barriers for those in the market for cleaner cars.