Written evidence from Transport Scotland and Energy Saving Trust (ELV0149)

The Committee is keen to understand the following about the Scottish interest-free ‘Used Electric Vehicle Loan’ that was recently closed for applications:

The success and take up of the scheme – how many loans have been administered under the scheme?
Are there plans to reopen the scheme in 2024?

Over the past decade, sales of zero emission vehicles (ZEVs) have grown in Scotland in line with the Scottish Government’s consumer-focussed financial support schemes for early adopters. The Scottish Government have offered a range of consumer incentives to support ZEVs uptake, most notably an interest-free Low Carbon Transport Loan (LCTL). The LCTL was created to support households and businesses overcome one of the biggest barriers to making the switch to lower emission vehicles - the higher upfront cost relative to internal combustion engine vehicles.

In recent years, to support a just transition to net zero, the LCTL has been re-focussed to prioritise support for the purchase of used electric vehicles. This approach is designed to support more people and households on lower incomes to make the switch to ZEV. The re-focussed scheme will also supports the development of the emerging market for second-hand ZEVs. Businesses can still use the loan to purchase new vehicles.

The LCTL aimed at used vehicles has been available since financial year (FY) 2020/21 and the attached table shows the number of loans and value of loans paid since that year. The figure quoted for FY 23/24 is what is expected to be paid this FY and includes paid loans and pending loans currently awaiting vehicle delivery to complete the loan process.

Financial Year	Number Paid	Value Paid
20/21	96	£1,214,738
21/22	234	£3,528,208
22/23	738	£16,666,834
23/24	1,148	£26,384,256
Grand Total	2,216	£47,794,036

Since the LCTL launched in 2011 it has successfully supported individuals and businesses across Scotland make the transition to net zero with 8,409 loans worth £224,532,817 in total – this includes the figures above and both new and used ZEVs. EST regularly publish updated stats on the loan on their website.

Currently, due to high demand, the loan has closed to new applicants as this year’s budget has been fully allocated. Typically, at this time of year Transport Scotland (TS) and the Energy Saving Trust (EST), who deliver/administer the scheme on behalf of Scottish Ministers, evaluate the loan to ensure it still meets its intended policy objectives. TS officials are currently preparing work plans and reviewing budgets and no decisions have been made by Scottish Ministers on the future of the scheme.