SMMT members are have been "left reeling" as the Energy Saving Trust (EST) dropped another bombshell on grant funding for cleaner vehicle technologies such as hybrids and LPG-fuelled vehicles.

"Powershift and CleanUp grants for May have dried up and no new applications are being accepted until the beginning of June. Customers cannot apply for a grant until then, leading to further uncertainty in the market and driving new car buyers away from the cleanest new vehicles," the SMMT said in a press release

The problem is likely to be amplified later in the year as EST has announced an arbitrary two month budget window for all grant applications. When the budget has been used up, no new grant applications are accepted. The industry fears this will create a huge problem in September, the second largest month for new car registrations and part of EST's August-September application window.

SMMT chief executive Christopher Macgowan said: "What are car buyers to do? Will they wait until an administrative window has opened to make a grant application for one of the cleanest alternative fuelled vehicles? No, the reality is that many will simply change their buying decision.

"This latest bombshell from EST shows a lack of understanding of how the market works on top of failing to learn lessons from previous mistakes. If government is serious about the drive to support greener technologies then it had better sort this mess out - and quickly."