If you’re looking to lease an electric car or van for your business, there’s a growing range of models to choose from and a few different ways to add one to your fleet.
Going electric will involve changes to your business, but there are multiple benefits that you can take advantage of, including tax breaks and grants. The switch will have practical implications on staff, too, but they will also see direct benefits.
GRIDSERVE Electric Fleet Solutions
Our team of fleet experts are here to help make the electrification of your business fleet as easy as possible - read more about GRIDSERVE Electric Fleet Solutions.
We can help you with;
- Optimising Fleet Cost
- Fleet Consultancy
- Electrification Strategy
- Corporate Charging Infrastructure
- Keeping your business moving
- Fleet Management Tool
Is leasing an EV best for my business?
Most businesses, tend to lease their vehicles, rather than buying them outright. And when it comes to electric vehicles, the case for leasing gets even stronger.
Here are some things to consider;
- EVs are much more cost efficient
- Electric vehicles require a lot less maintenance
- EVs have much lower journey costs - it costs much less to charge an electric car or van than it does to fill a tank of petrol or diesel
- EVs can be more expensive to buy than vehicles with petrol or diesel-fuelled internal combustion engines initially but this will become less of an issue as electric vehicles are more widely adopted
Electric vehicle grants to help your business
There are also government grants for businesses wanting to switch to electric fleet vehicles. The Office for Zero Emissions Vehicles (OZEV) has a Plug-in Car Grant (PiCG) for cars costing less than £35,000, which will pay 35% of the purchase cost, up to £1,500.
Electric vans are also eligible for government grants - the Plug-in van and truck grant. How much you can get will depend on the Gross Vehicle Weight (GVW) of the vehicle. The biggest grants are for the biggest vehicles, so you can receive £16,000 for something with a GVW of 12,000kg: for lighter vans, there’s up to 35% off the purchase price.
How do EV running costs compare to petrol or diesel vehicles?
The biggest element of running costs for a fleet car or van is fuel – which means that switching from petrol or diesel to electricity is going to save your company money.
While comparing different vehicles with different drivers over different journeys is tricky, it’s useful to consider HMRC’s Advisory Fuel Rates (AFR) for calculating Benefit in Kind (BiK) taxes.
A 2.0-litre petrol car’s AFR is 18p per mile, while electricity is 4p per mile and while this isn’t a definitive guide, it’s reasonable to work on the assumption that petrol and diesel are around four times the cost of electricity.
Another element of EV running costs that companies should benefit from is service and maintenance costs. Because an EV has nowhere near the same number of components to make it go (an ICE engine has around 2,000 parts: an EV’s drivetrain has just over 20), it should need less maintenance, which means companies will benefit from their fleet vehicles being less likely to be off the road.
Companies will save on their car tax payments, too. Vehicle Excise Duty charges are currently based on a vehicle’s CO2 emissions: as EVs emit no tailpipe CO2, they are zero-rated, saving a business around £155 per vehicle per year.
What are the other benefits?
Your employees will thank you for supplying them with an electric car or van, because they will benefit, too.
Companies that supply vehicles to staff that can also be used for personal mileage are subject to National Insurance Contributions (NIC) based on the BiK enjoyed by employees. EVs are currently rated at 1%, so companies and employees can save themselves thousands of pounds a year, compared to running a petrol or diesel car.
Under current tax laws, electricity is not classed as a fuel, so when charging at home and then covering business miles, HMRC’s Advisory Fuel Rate for electric cars is 4p per mile.
Anything a company pays an employee above this amount is liable for BiK. However, if a company fits workplace chargers – which they can also obtain grants for, under the government’s Workplace Charging Scheme – and they’re available for all employees to use, there’s gain no BiK to pay.
Companies can also decide to install charging points at employees' homes for their company EVs so the Workplace Charging Scheme can again provide grants of 75% of installation costs. And again there’s BiK to pay on charging costs.
Overall, the arguments for switching to electric are overwhelmingly positive and companies considering the move should act now, while the government grants still exist.
Going electric won’t just be good for the environment: it will be good for your business, too.