While a lot of attention has been paid to the Department for Transport’s ‘Road to Zero’ white paper, which details how central Government wants to banish fossil fuels by 2040, less has been said about Holyrood’s plans and its impact on Scottish fleets and drivers.
With an ambition to end the sale of conventional petrol and diesel vehicles by 2032, fleets in Scotland have been given less than 15 years to transition from diesel to electric power.
However, help is at hand. Since 2011, Transport Scotland has been offering an interest-free loan to help fleets switch to electric propulsion. Administered by the Energy Saving Trust, the budget allocated in the first year was a paltry £210,000, however, in 2018/19 and in 2019/20, £20m worth of public money is being allocated to help companies take on EVs and plug-in hybrids.
“The business loan offers up to £120,000 interest-free, repayable over six years, but is capped at £35,000 per vehicle. If you’re looking to take the full £120,000 as a fleet operator you’re probably looking to draw down less than the £35,000 per vehicle,” Matthew Eastwood (pictured right), head of transport at the organisation explained to Company Car Today.
Although the loans are generally used to help acquire vehicles outright, Matthew Eastwood said fleets can use them to help with lease down-payments.
“The loan is predominately taken out to purchase vehicles but clearly the majority of fleets don’t purchase vehicles,” he said. “We do allow the loan to support the leasing of vehicles – for instance, the initial payment could be funded through the loan to reduce monthly costs so you’re benefiting from the loan.”
The loan is available to any business based north of the border (this includes English companies that have an outpost in Scotland) but rather than simply handing over £120,000 of Government money, Matthew Eastwood said his team works with fleets and fleet managers to identify their needs on a one-on-basis.
He said: “We want to speak to them before they apply for the loan. We want to be able to identify carbon savings associated with the loan that we provide, so one of things that we do is that we ask fleets to speak to an advisor who will talk them through how the loan works and also allows them to get an understanding of the fleet and the potential to both save costs and carbon emissions,” he said. “While the business is interested in getting the vehicles, we are interested in the outcome as well – what’s the benefit to the business? What’s the cost saving? What’s the carbon saving?”
Should the paperwork all be in order, Eastwood told Company Car Today that fleets can expect the loan funding to be made available within 10 working days of a successful application being posted. However, Matthew Eastwood outlined a key role manufacturer’s dealers play in promoting the scheme: “Around 60% of the referrals come from dealerships so they play a key role in highlighting that the loans are available and can be used to support the purchase of vehicles.”
As well as the fleet-specific loan, a similar scheme is available to consumers – or grey fleet drivers – which offers up to £35,000 to cover the cost of buying a new EV or plug-in hybrid, while another programme offers taxi drivers a loan of up to £120,000 to replace black cabs with the new plug-in hybrid LEVC model or a Euro 6-compliant vehicle. Schemes are also in place to help install electric vehicle charging points at workplaces.
But the fleet loan doesn’t just cover cars and vans. Matthew Eastwood said: “It was pitched as a way to fund any carbon-saving transport measure, so we’ve funded telematics, video conferencing to reduce travelling, weight plates in LCVs to ensure they aren’t overloaded, as well as e-cargo bikes. Increasingly the focus has been on vehicles and that’s where the demand has largely been. We see a few businesses a year taking advantage of it to fund telematics but the vast majority use it for vehicles.”
Although funded by Transport Scotland (and the Department for Transport in England), the EST is positioned as an impartial man-in-the-middle between ministers and fleets and Matthew Eastwood said this is helpful, because the body has a good relationship with leasing providers and dealerships.
“It is helpful for a leasing company to be able to refer customers to an organisation that offers independent and impartial advice that supports decision-making and identifies the benefits of procuring ultra-low emission vehicles,” he said, as he explained that the EST is also helping to educate dealers about EVs.
“Quite often you would get a dealer, even if they understood the particular vehicle they were selling, that wouldn’t have a good understanding of how those vehicles compare with other EVs or charging infrastructure, so the training gives them a broader understanding and gives customers more accurate information,” he concluded.