Labour pledges to issue 2.5m zero-interest EV loans

John McDonnell has announced that Labour will introduce 2.5 million interest-free loans for the purchase of electric cars if it becomes the next government.

In an interview on the Today programme yesterday, the shadow chancellor of the exchequer unveiled the proposed scheme, which the party claims is designed to broaden the electric car revolution “beyond the elites”.

Under Labour’s plans, interest free loans of up to £33,000 will be available in the first year of the scheme’s operation.

The loans, which are then designed to drop in line with the anticipated fall in EV costs, would be issued by car manufacturing and dealers but guaranteed by the government. Labour plans to issue half a million of the loans per annum.

The government will cover the £1,500 cost of interest on a loan, with individuals saving up to £5,000 over time.

Labour said that the scheme is similar to the Scottish government’s arrangements.

Labour has said that those receiving the interest-free loans will have to participate in a mass trial of Vehicle-2-Grid technology, which is designed to balancing the peaks and troughs caused by the grid’s increasing reliance on renewables.

McDonnell insisted the scheme would boost the British automobile industry and support the UK’s transition away from petrol and diesel cars.

He said: “This will stimulate the automotive industry, it will sustain jobs in the conversion from fossil fuels to electric but actually it will create new jobs as well.

“So, this is beneficial in terms of the climate. It is beneficial for those people who want to convert their carbon-fuel powered car into an electric vehicle that is sustainable.

“At the same time it will help support the automotive industry and create jobs. Those jobs are in areas where we have had real issues, particularly with Brexit.”