Huge £20m boost to UK drivers buying EVs but there's a catch

Motorists in part of the UK can benefit from substantial incentives to switch from petrol and diesel cars to electric vehicles (EVs) with the help of a £20 million fund. The initiative is part of a broader strategy to accelerate the transition to cleaner transport and reduce carbon emissions, but here’s the catch — it is only available to drivers in Scotland.

The Scottish Government recently renewed the funding — the scheme was started in 2011 — which comes on top of an investment of around £65 million in strengthening public charging infrastructure. These incentives also support Scotland’s ambitious target to phase out new petrol and diesel cars by 2030.

The £20 million electric vehicle fund features several key components. Interest-free loans are being made available to both households and businesses, with a particular focus on supporting individuals and enterprises with lower incomes. Funding will be available for the Used EV Loan, Switched on Taxi Loan and Used Electric Low Carbon Vehicle Loan for Vans.

These loans can be used for the purchase of new and used electric cars, vans, motorcycles and mopeds. For example, the Used EV loan offers an interest-free loan of up to £30,000 to cover the cost of buying a used EV, and up to £5,000 towards a second-hand electric motorcycle or moped.

Businesses are also eligible for the Low Carbon Transport Business Loan, which can provide up to £150,000 to help businesses reduce their carbon impact and fuel costs, with sole traders and partnerships eligible for up to £75,000 of loan support. Taxi drivers are not left out, as the Switched On Taxis Loan covers both new and used electric taxis, with loan limits tailored to company size and structure.

In addition to loans, grants are available for vehicle disposal and charging infrastructure. Households within a 20km radius of Scotland’s low emission zones, such as those in Glasgow, Edinburgh, Aberdeen and Dundee, can receive up to £3,000 towards the safe disposal of non-compliant petrol or diesel vehicles, further incentivising the move to electric. There are also grants for installing home EV charge points, with up to £600 in combined UK and Scottish Government support for domestic installations.

Cabinet Secretary for Transport Fiona Hyslop said: "I’m pleased to announce the allocation of £20million to support our electric vehicle support schemes.

"During the ongoing cost-of-living crisis, this will help people access the benefits of modern electric vehicles at a greater range of price points. This means that more people can take climate action as part of our transition to a net zero transport system.

"These loans are in addition to what Scotland is already investing through our core Electric Vehicle Infrastructure Fund. These streams of investment work in tandem to make electric cars and vans the natural choice for drivers by 2030.”

Hyslop added: "We've met our target of 6,000 charge points two years earlier than planned through a combination of Scottish Government funding, increasing private sector investment and local authority planning and leadership.

"Scotland has more public EV charge points per capita than anywhere else in the UK, outside of London, and we have more rapid public EV charge points than any other part of the UK."

As of April 2025, Scotland had the second-most rapid or ultra-rapid electric car chargers in the UK, with 1,885 in place — coming in just behind the Southeast of England.

The push for electric vehicles is expected to stimulate economic growth by creating new green jobs, especially considering Scotland’s aim to deliver around 24,000 additional public EV charge points by 2030.

To access these incentives, motorists and businesses can apply through the Energy Saving Trust, which administers the funding programmes on behalf of the Scottish Government. Detailed eligibility criteria and application processes are available on their website and through local advice centres.

Senior programme manager at the Energy Saving Trust, Heather Quin, said: "In addition to supporting individuals and businesses purchasing electric vehicles, we’re pleased to also be offering further support to microbusinesses and sole traders to purchase electric vans.

"These loans are a practical and inclusive way to help more people switch to electric vehicles, lowering Scotland’s carbon emissions and improving local air quality."

Do you have a story to share? Email us at [email protected] for a chance to be featured.