Stuart: Increasing self-employed access to electric vehicle finance

In the long run, electric vehicles (EV) are both better for the planet and for their owner’s purse. With manufacturing costs falling and consumer finance groups showing that the average lifetime costs of electric vehicles are now cheaper than their internal combustion engine (ICE) equivalents, the trajectory is clear. However, the spread of costs is different. While electric vehicles are generally cheaper to run, they still tend to cost more to buy; a higher capital, lower operating cost model. This means that access to vehicle finance is relatively more important for those  purchasing EVs than it is for ICEs. Consequently, good finance provision is key to achieving widespread EV adoption. Transport Scotland has recognised this need, offering interest-free loans for those purchasing electric vehicles. Sadly this support is absent south of the border.

One group that traditionally suffers when it comes to access to finance is the self employed - just ask any sole trader who has tried to get a mortgage. Unfortunately, self employed access to vehicle finance is no different. This lack of provision puts the EV transition out of reach for a growing proportion of the workforce. This outcome is not only outdated, given the realities of the modern labour market, but also economically inefficient. It leaves many credit worthy consumers without access to the vehicle finance required for a full scale EV transition as well as much profit left on the table by their potential financiers. 

Self employed couriers provide a case in point. Like all consumers, couriers face barriers to switching to EVs. Range anxiety, limited charging infrastructure and higher upfront costs are all frictions impeding a smooth transition, but these are being overcome. However, access to finance remains a binding constraint. One EV provider recently set up a portal in order to funnel finance applications more efficiently to their finance providers. Only 2% were accepted. 

In a labour market that is increasingly platform enabled, facilitating information exchange may provide part of the solution.  Logistics platforms like Stuart provide partner couriers with access to work opportunities with complete flexibility, enabling them to maximise the productivity of their available time and the return from their vehicle assets. Many have established track records and are consistent performers with significant earning potential; qualities not necessarily visible via a standard credit check. Making finance partners aware of this can help to provide a more accurate, and often more favourable, picture of a courier’s suitability for lending. 

A partnership solution thus emerges between the vehicle vendor, the finance provider and the platform (or platforms) through which the applicant finds work. The plan at Stuart is to support this further through grant funding to reduce the size of the loan required, lowering the loan to value ratio and further incentivising the switch to EVs. We hope that this strategy, coupled with the long term financial benefits of switching to EVs, will make the self-employed EV transition a more investable proposition. 

This article was written by Will White, Sustainability Programme Manager, Stuart. Stuart is the leading on-demand solution for last-mile logistics, with a mission to build logistics for a sustainable world. To learn more about this author, please visit LinkedIN page.

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