Why you should plan to invest in electric vehicles
With the government confirming last month (March 2021) that no new petrol or diesel cars will be allowed to be sold post-2030, more and more individuals and businesses are switching to electric. Electric Vehicles (EVs) are quickly becoming a viable substitute for your petrol or diesel equivalent. Once, being limited by distance on a single charge and lack of infrastructure, EVs are now becoming both an environment and financial investment to businesses and the general public. As the UK government moves towards ‘building back greener’ and reaching its legally binding target of net zero emissions by 2050, it can be said that now is the best time to start the switch to electric.
Why do EVs make good financial sense?
EVs are cheaper to maintain, service and repair. Without an internal combustion engine, there is less likely to go wrong in the first place. There are grants and funding available locally and nationwide to bridge the initial investment and reap the benefits long term.
- Workplace charging scheme – businesses, charities and the wider public sector can apply for grants of up to £350 per socket for installing up to 40 charging sockets for their employees and fleets.
- Plug-in vehicles grant – depending on which EV you buy, including initial cost and emissions, you can receive up to £3000. There are also grants for electric vans, taxis and bikes, each with its thresholds.
- Go Ultra Low has a fantastic Local Incentives Tool that helps you find local incentives near you for EV purchasing and management.
Depending on your facilities and usage, smart electric chargers could also save your business money by avoiding peak charging times. On-site generation, storage, and load management systems are also other areas worth exploring that can also help you save and minimise the cost of upgrading your electricity connection.
Advice for businesses looking to switch to electric vehicles is largely around ensuring the availability of charging stations and implementing long-term EV strategies and travel plans. Travel plans are important to help you manage transport for your business and encourage staff to make informed, sustainable choices regarding their travel arrangements, for more information see iiE’s Travel Plan advice.
Where is the market going?
Ford and Jaguar are just two examples of large-scale car retailers following the deadline, pledging to be fully electric by 2030. British Gas are another company that is committed to their fleet going electric, with a more ambitious deadline of 2025.
The changes in policy and legislation, alongside consumer and business-driven behavioural changes all point in the same direction – electric cars. The Transport Decarbonisation Plan (TDP) which will detail the government’s support and role in the transition, is expected to be finalised at the end of Spring 2021. We are likely to see funding for innovation (similar to the £20 million funding pot announced during British Science Week), electrified public transport and a strategy of the roll-out including support.
Should you take the plunge?
Corporate Social Responsibility
Being socially accountable is crucial in today’s working environment. More and more employees are looking to their management department to work towards high environmental and ethical standards. When combined with other environmental policies, introducing an EV fleet or company car is seen as a forward-thinking, environmentally-conscious business decision. With 65% of people around the world wanting to work for an organisation with a powerful social conscience, you will not only be increasing employee retention but also attracting valuable new candidates.
Alongside, employee retention, there is also scope to attract new customers. A recent YouGov poll found that 2/3rds of the British public were sceptical of ‘green-washing or sustainability-related communications from businesses. Proof of successful initiatives, such as a commitment and roll out of an EV fleet, is a tried-and-tested way for your business to show your commitment and stand out.
That being said, it is important to know the source of the electricity being provided to your EV. Having an electric car sourced from electricity generated by fossil fuels would be counter-intuitive. So, make sure you switch to a green energy supplier and utilise resources such as Green Energy Switch.
When to Buy
- Tax changes from 2020/21 and Benefit-in-Kind (BiK)
Fully electric cars will not need to pay any Company Car Tax (CCT) in 2020/21 and it will only increase to 1-2% in the next two years. There are also five new CCT bands for certain plug-in hybrid being introduced which is beneficial for those with longer journeys and the least emissions. Electric cars are within the lowest BiK bracket of company car tax, which the largest tax benefits offered to business car drivers (which could save up to £1000/year compared to a conventional car).
- Vehicle Excise Duty
Fully electric cars are exempt from paying Vehicle Excise Duty (VED). Furthermore, in the first year, all cars (including plug-in hybrids) that emit less than 75g/km CO2 will pay less road tax.
- Daily congestion charges and free parking around city centres for EVs
For example, London has introduced cheaper tariffs to park around the city if you drive an EV.
For more information on tax incentives for EVs see here.
Trends & Future Proofing
As with any trend, no business wants to get left behind – EV’s are here to stay. With major developments and funding being directed at renewable energy and transportation, keeping ahead of the curve, and transitioning to an EV fleet now will save time, energy, and money in the future.
There also is a growing interest in technological trends. Battery management and developments are increasing including the Vehicle to Grid (V2G). V2G harnesses and stores energy provided from other renewable sources such as solar or wind, where storage is an issue, in EVs. It doesn’t impact your daily charging, is a similar cost to installing a fast charger and can generate a saving equivalent to the cost of driving 9,000 miles (Source).