Electric vehicle grants scheme backfires as taxpayers subsidise £87,000 sports cars

Subsidising expensive sports cars is not the most obvious way to fight global warming. But soon, anyone with £87,000 will be able to claim a UK taxpayer-funded £5,000 grant to help them buy Tesla's supercharged electric car, the Roadster, in the name of cutting carbon emissions.

The Guardian has learned the Tesla Roadster is one of just two cars that will be available from the start of a new government grants scheme announced today to encourage the take-up of greener cars. Existing electric cars, such as the G-Wiz – the most popular consumer electric car on UK streets – and the MEGA e-City will not be eligible because they do not go fast enough.

The new plug-in car grant, a plan first revealed by the Guardian last April, will offer car-buyers a maximum £5,000 discount on electric, plug-in hybrid and hydrogen vehicles from 1 January 2011. But the slow roll-out of electric vehicles by car-makers is putting the brakes on ministers' hopes for a rapid electric car revolution in the UK.

Apart from the Tesla Roadster, the only other model that will be on sale in time for the introduction of the grant is the Mitsubishi i-Miev, a four-seater car that will cost a hefty £25,000 before the grant. These two cars will be followed in March 2011 by the heavily hyped Nissan Leaf, a five-seater mass market electric car capable of running 100 miles between charges.

But further electric cars appear unlikely to materialise until 2012, or even later. The Ford Focus electric, which was shown at government photo call yesterday with transport secretary Lord Adonis, is only a prototype and will never become a mass production car. Vauxhall's Ampere, the UK version of America's GM Volt, is slated for 2012, the Norwegian-made Th!nk City cannot confirm it will have a right-hand drive model ready for 2011, and the Smart 'ed' won't be available to consumers until 2012.

Toyota, which has come under fire for its handling of the braking problems with its most recent Prius, said its lower emission plug-in Prius – a hybrid of petrol engine and electric motor – will not be available to consumers until 2012 at the earliest.The Guardian was unable to contact Tata UK, which is planning a 'Vista EV' car, as well as a UK dealership and Italian company that convert Citroen C1s and Fiat 500s to electric versions.

Existing electric car distributors such as Goingreen – whose £9,000 G-Wiz is ineligible for the scheme – may also be hit as buyers delay purchasing an electric vehicle until the grants begin in 2011. Nick Hewson, owner of Goingreen warned the grant could be used as a justification for putting up the price of cheaper, under-45mph electric vehicles. "This [new grant scheme] is now a disincentive for anyone looking at buying the quadricycle type of electric vehicles [such as its G-Wiz]. I think what will end up in happening is the grants will allow manufacturers [of cheaper electric vehicles] to put the price point up."

Under the grant scheme criteria, cars must be capable of a minimum top speed of 60mph and a range of at least 70 miles, as well as meeting safety criteria. Manufacturers will also be expected to offer a three-year warranty for the cars' batteries, which degrade over time.

Friends of the Earth's transport campaigner Richard Dyer said he welcomed the new grant but cautioned that the government needed to couple it with a growth in renewable energy. "Urgent action is needed to cut transport emissions, and incentives for motorists to choose electric cars could be a significant part of the solution," he said. "But these vehicles are only as green as the electricity used to power them, and tougher action is needed to ensure that the UK develops its vast renewable electricity potential." He added that car-makers needed to do more and the industry had a history of fighting regulation of tailpipe emissions, referring to lobbying by car-makers which led the EU to water down emissions targets for future new cars.

Separately yesterday, Mitsubishi Power Systems announced plans to invest £100m in a new wind turbine factory in the UK. The project, which is supported by a £30m government grant, will create around 200 jobs and was welcomed by energy secretary Ed Miliband and green groups including Greenpeace. Last year the UK's only major wind power factory, a Vestas blade-manufacturing plant in the Isle of Wight, closed after a long-running campaign by employees and activists. Forty employees were retained by Vestas for a new wind research and development centre.

The government also laid out further detail for the new charging infrastructure that will support electric cars. The £30m "plugged-in places" project, first announced last November, yesterday singled out London, Milton Keynes and the north-east as areas that will see over 11,000 charging points installed in the next three years. The government said it expects between 2,000 and 2,500 points to be installed by April 2011.

This article first appeared at the Guardian

BusinessGreen.com is part of the Guardian Environment Network