Incentives for Low- and Zero-Emission Vehicles

Incentives for Low- and Zero-Emission Vehicles

22/12/2021

What incentives are in place to help me purchase a low- or zero-emission vehicle?

On December 15th 2021 the government made some changes to the grants available to support the purchase of a range of low- and zero-emission vehicles. This page provides the latest information on the level of national incentives available from the government, as well as local incentives available specifically for drivers and vehicle owners in Birmingham.

Cars

National incentives

Government grants are available to help towards the purchase price of low- and zero-emission cars. Eligible vehicles must be capable of driving at least 112km (70miles) without producing any emissions and cost less than £32,000 (including VAT and delivery fees). For vehicles that meet these criteria, the government will provide 35% of the purchase price, up to a maximum of £1,500.

Local incentives

If you work within the CAZ and live outside it (please note this incentive is not available to residents of the CAZ) you are able to scrap your non-compliant vehicle through Motorpoint and then choose to receive one of the following options:

You are eligible for this scrapping incentive if:

  • You are the registered owner/ keeper of a vehicle that does not meet the emission standards for the Clean Air Zone so would be subject to the daily charge
  • You have been the registered owner/ keeper of that vehicle since before 10 September 2018
  • You work at least 18 hours per week at a business premise situated within the Clean Air Zone
  • You earn less than £30,000 a year

Wheelchair Accessible Vehicles (WAVs)

There are a limited number of grants available for passenger vehicles that have been converted to WAVs. Eligible vehicles must be converted from a passenger vehicle (M1 category) and have either zero tailpipe emissions or be capable of driving without producing any tailpipe emissions for at least 112km (70miles).

Vehicles that meet these criteria and cost less than £35,000 (including VAT and delivery fees) are eligible for a grant of 35% of the purchase price, up to a maximum of £2,500. The number of grants available is limited:

  • 250 grants available until 31st March 2022
  • 1,000 grants available from 1st April 2022-31st March 2023

To find out how many grants are left you can email the Department for Transport at: PluginGrants@dft.gov.uk

Taxis

National incentives

Government grants provide up to £7,500 for purpose-built taxis (Hackney carriages), up to a maximum of 20% of the vehicle purchase price, that have CO2 emissions of less than 50g/km and can travel at least 112km (70 miles) without any emissions at all.

Local incentives for Hackney carriages

As the owner of a Birmingham-licensed Hackney carriage, you may be eligible for a financial incentive if you meet all three of the following criteria:

  • Are the registered owner/keeper of a Hackney carriage taxi that is subject to the Clean Air Zone daily charge
  • Have been the registered owner/keeper of that vehicle since before 10 September 2018
  • Are licensed by Birmingham City Council as a Hackney carriage driver

If you meet all three of the above criteria, you can apply for one of the following financial incentive schemes:

  • £5,000 (spread over four years) towards the running costs of an Ultra Low Emission Vehicle (ULEV) taxi
  • £5,000 (one off payment) towards a Clean Vehicle Retrofit Accreditation Scheme (CVRAS) solution for an existing vehicle
  • £5,000 contribution towards a Euro 4 petrol or Euro 6 diesel (or better) compliant vehicle, unless eligible for the Government’s plug-in grant.

If you had previously owned a non-compliant vehicle, but have upgraded to a compliant vehicle since 10 September 2018, you may be able to apply for the financial support retrospectively.

Local incentives for private hire vehicles

As the owner of a Birmingham-licensed private hire vehicle, you may be eligible for a financial incentive if you meet all three of the following criteria:

  • You are the registered owner/keeper of a private hire vehicle that will be subject the Clean Air Zone daily charge
  • You have been the registered owner/keeper of that vehicle since before 10 September 2018
  • You are licensed by Birmingham City Council as a private hire driver

If you meet these eligibility criteria, you can apply to one of the following schemes:

  • Up to £1,000 towards an upgrade to a compliant Euro 4 petrol or Euro 6 diesel vehicle or better. The vehicle must be no more than three years old as of January 2020
  • Up to £2,000 towards the purchase or lease of a hybrid vehicle or plug-in hybrid electric vehicle that is not eligible for the Government’s plug-in car grant and meets the Birmingham Taxi Licensing age requirements
  • Subject to purchase up to two annual payments of £1,250 towards running costs of a fully electric vehicle or long-range plug-in hybrid vehicle (if eligible for a Government plug-in grant)

Further information around eligibility is available through the Brum Breathes website

Small Vans

You can receive a grant that will pay for 35% (up to a maximum of £2,500) of the purchase price of a small van that:

  • has CO2 emissions of less than 50g/km and can travel at least 96km (60 miles) without any emissions at all
  • weighs less than 2,500kg gross vehicle weight

Each business or organisation can apply for up to 1,000 plug-in van and truck grants per year, with the limit resetting on April 1st each year.

Large Vans

You can receive a grant that will pay for 35% (up to a maximum of £5,000) of the purchase price of a large van that:

  • has CO2 emissions of less than 50g/km and can travel at least 96km (60 miles) without any emissions at all
  • weighs between 2,500kg and 3,500kg gross vehicle weight

Trucks

National incentives

There are two different grants available for the purchase low- or zero-emission trucks. Eligible vehicles must:

  • have CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle that can carry the same capacity
  • be able to travel at least 96km (60 miles) without any emissions at all

The value and availability of the grant will depend on the vehicle size.

Small trucks

For eligible small trucks that are 3,500-12,000kg gross vehicle weight (sometimes referred to as N2 category vehicles), the grant will cover 20% of the purchase price, up to a maximum of £16,000.

There are a limited number of grants available at the full £16,000 rate each year, running from April 1st to March 31st: 

  • a total of 250 grants are available at the £16,000 rate each year
  • each business or organisation can receive up to 10 grants at the £16,000 rate each year

Once either of these limits is reached, the incentive cap falls to £5,000. Each business or organisation can apply for up to 1,000 plug-in van or truck grants each year. All limits are reset each year on April 1st.

Large trucks

For eligible large trucks that weigh more than 12,000kg gross vehicle weight (sometimes referred to as N3 category vehicles), the grant will cover 20% of the purchase price, up to a maximum of £25,000.

There are a limited number of grants available at the full £25,000 rate each year, running from April 1st to March 31st: 

  • a total of 100 grants are available at the £25,000 rate each year
  • each business or organisation can receive up to 5 grants at the £25,000 rate each year

Once these limits have been reached:

  • A total of 250 grants of up to £16,000 per vehicle are available
  • Each business or organisation can apply for up to 10 grants at this rate

Once these limits have been reached, the incentive cap falls to £5,000. Each business or organisation can apply for up to 1,000 plug-in van or truck grants each year. All limits are reset each year on April 1st.

To find out how many grants are left you can email the Department for Transport at: PluginGrants@dft.gov.uk

Local incentives

SMEs operating heavy duty vehicles in Birmingham that have been actively trading for at least 12 months can receive financial support to ensure their vehicles meet the requirements of the CAZ from the Heavy Duty Vehicle fund.

Road Freight Transport for Hire or Reward Operators can apply for a maximum of €100,000 per SME towards:

  • Retrofit of non-compliant vehicle(s) – Up to a maximum of £15,000 per vehicle
  • Relocation/exit lease costs – Up to a maximum of £15,000 per SME

Non-Road Freight Transport for Hire or Reward Operators can apply for a maximum of €200,000 per SME towards:

  • Retrofit of non-compliant vehicle(s) – Up to a maximum of £15,000 per vehicle
  • Relocation/exit lease costs – Up to a maximum of £15,000 per SME
  • Lease of compliant vehicle(s) – A maximum grant contribution of up to £15,000 towards the lease costs of a new or used (Euro 6 diesel or above, Euro 4 petrol or above, electric, hybrid, LPG or biofuel) compliant vehicle, which can include a deposit and lease repayments of up to a maximum of six months
  • Purchase of compliant vehicle(s) – A maximum grant contribution of up to £15,000 towards the purchase cost of a new or used (Euro 6 diesel or above, Euro 4 petrol or above, electric, hybrid, LPG or biofuel) compliant vehicle

You can view the retrofit options and the approved providers under the Clean Vehicle Retrofit Accreditation Scheme (CVRAS) in the Resource Library

Eligibility criteria for the funding:

  • The company must own or lease Heavy Duty Vehicle(s) that do not meet the Clean Air Zone emission standards
  • Eligible non-compliant Heavy Duty Vehicles (N2, N3 and M3 only) must be either:
    • Registered and located within Birmingham’s Clean Air Zone or
    • Registered and located within the Birmingham City area and conducting commercial operations within Birmingham’s Clean Air Zone or
    • Registered and located within the West Midlands area and conducting commercial operations within Birmingham’s Clean Air Zone

Companies applying for the funding must also be able to evidence:

  • The frequency of entry to the Clean Air Zone based on current operations
  • The current emissions standard of eligible, non-compliant Heavy Duty Vehicle(s)
  • The size of the business (Small to Medium sized Enterprise)

Motorcycles

Eligible motorcycles must have no CO2 emissions and be able to travel at least 50km (31miles) between charges. Vehicles meeting these criteria with a purchase price below £10,000 (including VAT and delivery fees) can receive up to 35% of the purchase price up to a maximum of £500.

Mopeds

Eligible mopeds must have no CO2 emissions and be able to travel at least 30km (19miles) between charges. Vehicles meeting these criteria with a purchase price below £10,000 (including VAT and delivery fees) can receive up to 35% of the purchase price up to a maximum of £150.


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