Subsidy in doubt for future electric car buyers

Jul 1 2010 by Dan Warburton, The Journal

PRESSURE was mounting last night on Business Secretary Vince Cable to save a £5,000 green car subsidy expected to play a vital role in the future of the North East’s car industry.

The minister has warned car companies there will be no cash hand-outs and claimed the new coalition Government would not “go around the country waving a cheque book”.

Previous Government officials had committed to subsidising, from 2011, the buyers of electric cars for a quarter of the purchase price up to a maximum of £5,000.

But in a direct blow to Sunderland’s Nissan car plant, it is believed that the subsidy, designed to get the production of electric vehicle cars off the ground, could be axed.

The Nissan Leaf would will cost £28,350, including the battery. But the price was set on the assumption electric car buyers are eligible for a £5,000 Government incentive for going green.

If the subsidy were to be cut it is feared the North East car industry would fall behind European countries such as Holland, Portugal and France, which have confirmed they will definitely offer the initiative.

It comes just months after it was announced £8m of public money would be ploughed into installing of 1,300 charging points across the North East.

Now fears have been raised that the future of electric vehicle production in the region is in jeopardy following Mr Cable’s pledge to cut back spending.

Last night MP for Sunderland Central Bridget Phillipson said: “The car industry is very important to the North East economy and it’s important that there is development of the new electric car.

“It will require Government spending to buy and use the car and it is very important that the subsidy goes ahead. Once the cars become more popular they will become cheaper to produce.

“This is not simply about jobs and the economy, it’s about making sure we consider the implications of climate change. It’s also fundamentally dishonest of the Business Secretary to suggest the previous Government was going around waving a cheque book.