The time is now - Embracing the EV challenge.
Electric vehicles have been slowly creeping onto the scene since 2013, and as they release 40% less carbon dioxide emissions than standard diesel or petrol cars, their presence will definitely be part of the cultural and legislative push to reducing the UK’s wider carbon footprint.
For the last few years business leaders have been wrestling with the challenge of when and how to bite the bullet on an all-EV vehicle fleet – but can we afford to wait? The British government has already announced that they wish to ban the use and production of new diesel and/or petrol vehicles by 2040, meaning that standard vehicles are actually well on their way to becoming extinct.
In addition to the ticking clock, now more than ever businesses are feeling the economic case for making the change. Indeed, the current spike in fuel costs resulting from the invasion of Ukraine by Russia has created the perfect impetus for many businesses to embrace this issue right now.
Why Should You Make Your Vehicle Fleet Electric?
The government have made a lot of preparations already so that the transition from petrol to electric cars will happen as smoothly as possible, including spending £38m on fitting public charging points across the UK.
Corporation Tax - If you buy an electric car through the business you can offset part of the cost against your corporation tax bill. With most cars this deduction will be applied gradually over time, however with electric cars you can claim the full deduction in the year you buy it.
Company Car Tax – Currently company car tax on electric cars is 0%. Given that company car tax is often hundreds of pounds a month, or even more, this means there are huge savings for employees when you go electric. Although not a direct benefit for the business, this can feel like a zero-cost “pay rise” for employees – win/win.
Mileage Costs – Electric vehicles have extremely low long-term running costs. For example, petrol currently costs between £1.50-£1.90 per litre whereas the cost for charging an electric car is between 10-14p per kWh (one kWh is equal to around 3 miles).
Congestion Zones – Once only limited to London, the new congestion zones in Birmingham and Bath show the way things are going. The exemption of EVs means that significant daily savings can be achieved for businesses operating in metropolitan areas.
Safer Driving Behaviours - These vehicles encourage and promote eco-friendly safer driving, which would lead to your company being perceived by customers as more reliable, innovative and modern. Your drivers will be encouraged to practise safer driving, as unsafe driving behaviours will cause significantly limited battery life and range.
Environmental Impact – This is the easy one. No company can claim to really have a green agenda unless they reduce the carbon footprint of their vehicle fleet.
And what about the negatives?
There three key issues with electric cars which could put businesses off integrating them into their fleets.
Firstly is the fact that they are not best suited to long distance journeys, due to having a limited battery life. This is true when comparing with fuel vehicles with a 300-500 mile range, however many current EVs now have a 200 mile range, which is suitable for the vast majority of business users. In addition the network of super-fast chargers is increasing every month, further enabling significant business mileage to be easily and efficiently completed.
Second is vehicle cost. Whilst it is true that purchase prices are high, they are coming down rapidly. Further there are now specialist EV fleet providers emerging who are able to offer comparable 3-4 year lease agreements for any size of business.
The other challenge is insurance. The average premium price for an electric vehicle is said to be around 45% higher than that of a regular vehicle, but again, as EVs become more popular it is highly likely that these rates will drop rapidly at a normalized level.
Time to change
Changing your motor fleet to make it entirely - or even partially - electric would save your business a significant amount of money in the long run, as electricity is an easily accessible and cheap resource (compared to fossil fuels).
Electrical vehicles seem like the obvious choice for any motor fleet business looking to save money, and there’s never been a more obvious time – so what’s stopping you?