Electric car sales doubled in November to account for one in every five purchases as the switch away from petrol and diesel vehicles gathers pace.
Almost a third of new cars sold were either pure electric or a petrol/electric hybrid, according to SMMT figures released earlier this month.
Department for Transport insiders argue that bringing the grant amounts down makes sense as the cost of the vehicles falls and more are sold.
However, some buyers will remain deterred by the premium of about 25pc over petrol and diesel cars, said Ian Plummer of Auto Trader.
“Upfront costs and fears around charging are consistently what consumers tell us are their biggest barriers to buying an EV, so government and industry need to work together to overcome these barriers to stand a chance of meeting the 2030 targets,” he said.
The market has relied on budget-conscious drivers believing they will recover the difference in cheaper energy costs and assuming that they have access to cheap credit. That assumption does not apply to all consumers and the situation could be worsened when the Bank of England finally decides to raise interest rates.
Earlier cuts removed all Tesla models from grant eligibility, with the Model 3 listed from £42,500.
The Government will maintain a £2,500 grant for wheelchair-accessible vehicles.
KPMG said its survey of the global car industry suggested bosses believed that subsidies remained necessary, but that electric vehicle sales will be more common by the end of the decade even without them.
The transport minister, Trudy Harrison, said: “The market is charging ahead in the switch to electric vehicles. This, together with the increasing choice of new vehicles and growing demand from customers, means that we are refocusing our vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further.”