Major questions remain around the funding of EVs on the used market, said CEO Paul Burgess, and the announcement created a new degree of impetus towards resolving them.

“It’s fair to say that the used car motor finance sector has been aware of the structural problems around used EV funding for a while but we believed that more time was available to work our way through them. The new announcement moves the point of action much closer.

“Like most other motor finance providers, we have been looking at the challenges around constructing EV funding products. These range from the fact that predicting RVs remains much more difficult than for petrol and diesel cars through to the question of the battery as an asset.

“The current situation, where there are very few companies currently willing to provide finance for used EVs – and that even some of those are having the business underwritten by manufacturers – illustrates the difficulty of solving these problems.”

Paul said that having a properly functioning used car market and accompanying motor finance was essential to the success of EVs in the medium and long term.

“The Government announcement means that, within less than a generation, we will all be EV drivers, so finding viable finance products is crucial but the current models we use for petrol, diesel and hybrid don’t really work, at least at the moment.

“Our view is that no single motor finance company is likely to solve this issue by themselves and there needs to be industrywide discussion and co-operation in order to deliver the required innovations.”

It was certainly possible, Paul added, that manufacturers played a greater part in the funding of used EVs than had been seen in the traditional motor finance market.

“It’s been suggested that manufacturers show their faith in the product by underwriting the battery while motor finance companies fund the car, and this is certainly one option that could help to create more affordable products.

“However, there are any number of potential solutions. What the Government has done with the 2035 announcement is to make talking about those possibilities much more urgent.”