Vehicle scrappage scheme

Last updated

The vehicle scrappage scheme (also vehicle discount scheme and car scrappage scheme) is a government incentive scheme that was introduced in the 2009 United Kingdom Budget to encourage British motorists to purchase a new, more environmentally-friendly car or van and scrap an older, more polluting one that they have owned for more than twelve months. The scheme was extended in September 2009 and again in February 2010 and it finished at the end of March 2010. In February 2010, a separate Plug-in Car Grant to provide £5,000 towards the cost of electric vehicles was announced and it began in January 2011. [1]

Contents

Overview

The initial scheme, costing the British Government £300,000,000 was introduced in 2009 to support the replacement of 300,000 cars purchased. [2]

The Government agreed to provide a £1,000 payment towards the purchase of a new car ordered from participating manufacturers after 23 April 2009 and first registered on or after 16 May 2009.[ citation needed ] to UK residents who also scrap a car that they have owned for more than twelve months, was older than ten years and manufacturers agreed to also provide £1,000 off the list price. [3]

Environmental groups were "angered" that the scheme was not limited to economical cars, while classic car enthusiasts expressed concerns about the potential decimation of surviving numbers of some of the rarest models in the country, many of which would have been off the road for years and thus not polluting anyway. The RAC Foundation said that many scrapped cars would be still be in good condition and an estimated 90% of cars purchased under the scheme would be imported. Many cars are already discounted from list price so the saving to purchasers is in reality, less than £2,000. [3]

The Institute for Fiscal Studies criticised the scheme, saying that: [4]

The number of new cars sold increased during the scheme, and figures for February 2010 were 26% higher than the previous year. There were concerns that sales would reduce after the end of the scheme and the end of the reduced VAT rate of 15%. [5]

The average emissions of new cars sold during the scheme dropped 5.4% from the year before. [6]

In March 2010, What Car magazine claimed that the scheme had been a "smoke-screen" behind which manufactures increased prices and that "some of the price rises take your breath away".[ citation needed ]

In February 2010, the Government announced a £230,000,000 "Plug-in Car Grant" scheme to provide a £5,000 grant towards the purchase of plug-in electric cars—the scheme started in January 2011 and a separate scheme, "Plugged-In Places" provided some 11,000 charging points in selected UK cities over the next three years. [7] There was also talk of a scrappage scheme for old radios ahead of the planned analogue TV switch-off. [8]

History

A car scrappage scheme was introduced in Germany on 13 February 1999 and then in France and Italy. Following a record fall in car sales in the UK and associated redundancies [9] accompanied by lobbying by the Society of Motor Manufacturers and Traders on behalf of UK car manufacturers with support from[ word missing? ] [10] the UK scheme was introduced in the 2009 United Kingdom Budget on 22 April 2009 by the Chancellor of the Exchequer, Alistair Darling. The scheme was supported by Peter Mandelson, Secretary of State for Business, Innovation and Skills, and Geoff Hoon, Secretary of State for Transport. [11]

In September 2009, a further £100,000,000 was made available to the scheme which was extended until the end of February 2010. [12] The scheme had been due to run out of money during October and varies bodies including Engineering Employers' Federation, Unite and the Society of Motor Manufacturers and Traders had lobbied for an extension which was announced by Mandelson at the 2009 Labour Party conference in Brighton. [13]

On 5 February 2010, the scheme was extended by a month to run until the end of March 2010 or until the funds were exhausted.[ citation needed ] During the same month, the Government announced a £230,000,000 "Plug-in Car Grant" scheme to provide a £5,000 grant towards the purchase of plug-in electric cars, to begin in January 2011. A separate scheme, "Plugged-In Places", would provide some 11,000 charging points in selected UK cities over the next three years. [7]

See also

Related Research Articles

<span class="mw-page-title-main">Honda</span> Japanese multinational manufacturing company

Honda Motor Co., Ltd. is a Japanese public multinational conglomerate manufacturer of automobiles, motorcycles, and battery-powered equipment, headquartered in Minato, Tokyo, Japan.

<span class="mw-page-title-main">Electric car</span> Car propelled by an electric motor using energy stored in batteries

An electric car or electric vehicle (EV) is a passenger automobile that is propelled by an electric traction motor, using only energy stored in on-board batteries. Compared to conventional internal combustion engine (ICE) vehicles, electric cars are quieter, more responsive, have superior energy conversion efficiency and no exhaust emissions and lower overall vehicle emissions. The term "electric car" normally refers to plug-in electric vehicle, typically a battery electric vehicle (BEV), but broadly may also include plug-in hybrid electric vehicle (PHEV), range-extended electric vehicle (REEV) and fuel cell electric vehicle (FCEV).

<span class="mw-page-title-main">Vehicle recycling</span> Dismantling of vehicles for spare parts

Vehicle recycling or automobile scrapping is the dismantling of vehicles for spare parts. At the end of their useful life, vehicles have value as a source of spare parts and this has created a vehicle dismantling industry. The industry has various names for its business outlets including wrecking yard, auto dismantling yard, car spare parts supplier, and recently, auto or vehicle recycling. Vehicle recycling has always occurred to some degree but in recent years manufacturers have become involved in the process. A car crusher is often used to reduce the size of scrapped vehicles for simplified transportation to a steel mill.

The 2008–2010 automotive industry crisis formed part of the 2007–2008 financial crisis and the resulting Great Recession. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry. The downturn also affected Canada by virtue of the Automotive Products Trade Agreement.

A scrappage program is a government incentive program to promote the replacement of old vehicles with modern vehicles. Scrappage programs generally have the dual aim of stimulating the automobile industry and removing inefficient, more polluting vehicles from the road. Many European countries introduced large-scale scrappage programs as an economic stimulus to increase market demand in the industrial sector during the global recession that began in 2008.

<span class="mw-page-title-main">Car Allowance Rebate System</span> US federal incentives program for consumer fuel efficiency boosts

The Car Allowance Rebate System (CARS), colloquially known as "cash for clunkers", was a $3 billion U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new, more fuel-efficient vehicle when trading in a less fuel-efficient vehicle. The program was promoted as a post-recession stimulus program to boost auto sales while putting more fuel-efficient vehicles on the roadways.

<span class="mw-page-title-main">Plug-in electric vehicle</span> Type of vehicle

A plug-in electric vehicle (PEV) is any road vehicle that can utilize an external source of electricity to store electrical energy within its onboard rechargeable battery packs, to power an electric motor and help propelling the wheels. PEV is a subset of electric vehicles, and includes all-electric/battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Sales of the first series production plug-in electric vehicles began in December 2008 with the introduction of the plug-in hybrid BYD F3DM, and then with the all-electric Mitsubishi i-MiEV in July 2009, but global retail sales only gained traction after the introduction of the mass production all-electric Nissan Leaf and the plug-in hybrid Chevrolet Volt in December 2010.

The Retire Your Ride program was a voluntary Canadian scrappage program created to reward Canadians for permanently retiring a vehicle made in 1995 or earlier for a wide range of rewards, such as a public transit pass or C$300. The program ended on March 31, 2011. By January 2011, the program had surpassed its original targets and had permanently retired over 120,000 vehicles and reduced thousands of tonnes of smog-forming emissions. The program was available in provinces across Canada. Some automakers had started their own complimentary auto retirement programs with rewards on top of the federal program's rewards in an effort to increase vehicle sales in Canada.

<span class="mw-page-title-main">Plug-in electric vehicles in the United States</span> Overview of plug-in electric vehicles in the US

The adoption of plug-in electric vehicles in the United States is supported by the American federal government, and several states and local governments.

<span class="mw-page-title-main">Toyota Prius Plug-in Hybrid</span> Motor vehicle

The Toyota Prius Plug-in Hybrid is a plug-in hybrid liftback manufactured by Toyota. The first-generation model was produced from 2012 to 2016. The second-generation model has been produced since 2016. Production of the third-generation model began in 2023.

<span class="mw-page-title-main">Electric car use by country</span>

Electric car use by country varies worldwide, as the adoption of plug-in electric vehicles is affected by consumer demand, market prices, availability of charging infrastructure, and government policies, such as purchase incentives and long term regulatory signals.

<span class="mw-page-title-main">Government incentives for plug-in electric vehicles</span>

Government incentives for plug-in electric vehicles have been established around the world to support policy-driven adoption of plug-in electric vehicles. These incentives mainly take the form of purchase rebates, tax exemptions and tax credits, and additional perks that range from access to bus lanes to waivers on fees. The amount of the financial incentives may depend on vehicle battery size or all-electric range. Often hybrid electric vehicles are included. Some countries extend the benefits to fuel cell vehicles, and electric vehicle conversions.

<span class="mw-page-title-main">Plug-in electric vehicles in France</span> Overview of plug-in electric vehicles in France

The adoption of plug-in electric vehicles in the France is actively supported by the French government through a bonus–malus system through which provides subsidies towards the purchase of all-electric vehicles and plug-in hybrids with low CO2 emissions. The government also provides non-monetary incentives; subsidies for the deployment of charging infrastructure; and long term regulations with specific targets. Additionally, France passed a law in December 2019 to phase out sales of cars that burn fossil fuels by 2040.

<span class="mw-page-title-main">Plug-in electric vehicles in Japan</span> Overview of plug-in electric vehicles in Japan

The fleet of light-duty plug-in electric vehicles in Japan totaled just over 300,000 highway legal plug-in electric vehicles in circulation at the end of 2020, consisting of 156,381 all-electric passenger cars, 136,700 plug-in hybrids, and 9,904 light-commercial vehicles.

<span class="mw-page-title-main">Plug-in electric vehicles in China</span> Market overview

In China, the term new energy vehicle (NEV) is used to designate automobiles that are fully or predominantly powered by electric energy, which include plug-in electric vehicles — battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) — and fuel cell electric vehicles (FCEV). The Chinese Government began implementation of its NEV program in 2009 to foster the development and introduction of new energy vehicles, and electric car buyers are eligible for public subsidies.

<span class="mw-page-title-main">Plug-in electric vehicles in the United Kingdom</span> Overview of plug-in electric vehicles in the United Kingdom

The adoption of plug-in electric vehicles in the United Kingdom is actively supported by the British government through the plug-in car and van grants schemes and other incentives. About 745,000 light-duty plug-in electric vehicles had been registered in the UK up until December 2021, consisting of 395,000 all-electric vehicles and 350,000 plug-in hybrids. Until 2019, the UK had the second largest European stock of light-duty plug-in vehicles in use after Norway.

<span class="mw-page-title-main">Plug-in electric vehicles in California</span> Overview of plug-in electric vehicles in the U.S. State of California

The stock of plug-in electric vehicles in California is the largest in the United States, and as of December 2023, cumulative plug-in car registrations in the state since 2010 totaled 1.77 million units. Between November 2016 and until 2020, China was the only country market that exceeded California in terms of cumulative plug-in electric car sales.

Chargemaster Limited is a supplier of charging infrastructure for electric vehicles, based in Milton Keynes, England. It provides charging units for home, business and public use, and operates its own electric vehicle public charging network, which is the largest network in the United Kingdom.

<span class="mw-page-title-main">Plug-in electric vehicles in Europe</span> Overview of plug-in electric vehicles in Europe

The adoption of plug-in electric vehicles in Europe is actively supported by the European Union and several national, provincial, and local governments in Europe. A variety of policies have been established to provide direct financial support to consumers and manufacturers; non-monetary incentives; subsidies for the deployment of charging infrastructure; and long term regulations with specific targets. In particular, the EU regulation that set the mandatory targets for average fleet CO2 emissions for new cars has been effective in contributing to the successful uptake of plug-in cars in recent years

<span class="mw-page-title-main">Ultra Low Emission Zone</span> London UK vehicle charging zone

The Ultra Low Emission Zone (ULEZ) is an area in London, England, where an emissions standard based charge is applied to non-compliant road vehicles. Plans were announced by London Mayor Boris Johnson in 2015 for the zone to come into operation in 2020. Sadiq Khan, the subsequent mayor, introduced the zone early in 2019. The zone initially covered Central London, the same area as the existing London congestion charge; in 2021, Khan extended the zone to cover the area within the North Circular and South Circular roads. In 2023 it was further extended to all of Greater London, covering over 1,500 square kilometres (580 sq mi) and approximately 9 million people.

References

  1. ↑ "Plug-in car grants: eligibility and applications". GOV.UK. Retrieved 20 August 2019.
  2. ↑ Reed, John (23 April 2009). "Mixed response greets car-scrapping bonus". Financial Times. Retrieved 16 July 2009.
  3. 1 2 Webster, Ben (23 April 2009). "Car-scrap scheme payout is a cheat at half the price". The Times. London. Retrieved 9 April 2010.
  4. ↑ "Some initial reactions to Budget 2009" (PDF). Institute for Fiscal Studies. Retrieved 10 March 2010.
  5. ↑ Kumar, Nikhil (5 March 2010). "Car sales rise again as end of scrappage looms" . The Independent. London. Archived from the original on 11 August 2022. Retrieved 9 April 2010.
  6. ↑ "Vehicle scrappage scheme drives down emissions of new cars". The Guardian. London. 9 March 2010. Retrieved 10 March 2010.
  7. 1 2 Hudson, Paul (28 February 2010). "£5,000 grant to buy plug-in electric cars". The Telegraph. London. Retrieved 10 March 2010.
  8. ↑ Moore, Matthew (2 February 2010). "Radio 'scrappage' scheme to boost sales of digital sets". The Daily Telegraph. London. Retrieved 10 March 2010.
  9. ↑ "UK moves towards car scrap scheme". BBC News. 12 April 2009. Retrieved 10 March 2010.
  10. ↑ "Car scrappage scheme considered for ailing UK motor industry" . The Independent. London. 16 February 2009. Archived from the original on 11 August 2022. Retrieved 9 April 2010.
  11. ↑ Winnett, Robert (21 April 2009). "Owners of older cars to be offered cash to trade in vehicles". The Telegraph. London. Archived from the original on 20 April 2010. Retrieved 10 March 2010.
  12. ↑ "Q&A: The new car scrappage scheme". BBC News. 28 September 2009. Retrieved 9 April 2010.
  13. ↑ Wintour, Patrick (28 September 2009). "Mandelson announces extension of car scrappage scheme". The Guardian. London. Retrieved 9 April 2010.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.