UK reportedly planning electric car loan subsidies to push sales
UK reportedly planning electric car loan subsidies to push sales
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Ministers in talks with vehicle finance sector about making more low-interest or interest-free loans available. The UK government is reportedly considering subsidising purchases of electric vehicles by guaranteeing consumer loans, as it looks at ways to boost sales that are failing to reach official targets.
Ministers have started talks with the car finance sector on how to make more low-interest or interest-free loans available to help consumers buy more EVs, according to the Financial Times. By underwriting private loans the government could help bring the higher upfront cost of electric vehicles closer to their petrol and diesel equivalents, the FT reported, citing government and industry figures.
Such a move would undoubtedly be welcomed by the car industry, which has been warning for some time that it is facing tough market conditions. Electric cars have been particularly affected by the industry-wide sales slowdown because they require a greater initial outlay, compared with their fossil fuel-powered counterparts.
Previous subsidy schemes for electric cars came to an end in 2022, when the Conservative government pulled the plug on the final grant scheme. The government said at the time that grants had created a mature market for ultra-low emission vehicles, and had boosted sales of fully electric cars over a decade. However, the controversial decision left the UK as the only large European country without any incentives for electric cars, which carmakers called “hugely disappointing”.
