Benefits of an electric car fleet for businesses

One of the most important drivers (excuse the pun) of business decisions is the effect on the bottom line. How will this decision impact my profits or is there another way of doing things that is more cost effective? In this context I want to explore  some of the benefits of electric car fleets for businesses.

Energy efficiency is a major factor in how most companies operate. Whether that be standard running costs of electricity and gas for company premises or production equipment power usage.  How often has energy efficiency when it comes to the car that you and/or your employees drive entered into your considerations though? For many companies, especially those with large fleets, the running costs can be a major expense. There’s not just the purchase or leasing of the vehicles involved, there’s road tax, insurance and maintenance. Not to mention the extortionate cost of fuel to keep you and your employees on the road.

It’s little wonder then, that more and more companies are looking to the electric vehicle industry. Understanding the economic benefits that running an electric fleet may yield can be quite a surprise. (And don’t forget the important and obvious environmental advantages of using a less polluting scheme).

What are the benefits of electric vehicles as company cars?

Along with the environmental impact, the most important benefit is obviously the cost savings for the company. The main cost savings come from:

  • Whole cost life of the car – Electric Vehicles significantly reduce the whole life cost of a company car due to several things:
  • there’s no road tax to pay, all cars with CO2 emissions less than 100 g/km, are not subject to road tax.
  • the huge savings made on fuel (which is typically around 80% of the fuel costs of a conventional fleet).
  • businesses in London using electric vehicles can save thousands of pounds per year on Ultra Low Emission Zone (ULEZ) and congestion charges.
  • Reduced running cost in the form of savings on repairs and maintenance. Electric vehicles don’t need oil and air filter changes, a new fan, a new timing belt, head gasket or spark plugs. Why? The battery unit is one working part, as opposed to dozens with a combustion engine. Typically, maintenance costs for electric vehicles are 30% lower than those of their combustion engine alternatives.

There are also benefits in terms of reputation (from being more environmentally responsible) but also with your employees. There are certain benefits to your employees in providing them with electric vehicles:

  • employees can claim 4p per mile when driving a company car on business
  • charging up your Electric Vehicle at work is exempt from tax. If you provide work placed chargers this is a benefit to your employees
  • the drivers can make significant savings on company car tax when using electric vehicles. Benefit in Kind (BIK) tax mean drivers will pay 0% BIK during the 2020/21 financial year, 1% in 2021/22 followed by 2% in 2022/23. As the amount of company car tax you pay is based on your annual salary and the value of your car, this could mean massive savings (hundreds of pounds a month in some cases).

Initial out lays

Here, there are savings available too. It’s a fact that electric vehicles are generally more expensive than standard cars at the moment. The government, however,  has included a number of grants to persuade more companies to adopt electric fleets. This is as a part of their overall strategy to remove diesel and petrol vehicles by 2035.

Small vans are eligible for up to £2,500 grant, large vans £5,000 and trucks up to £25,000. In addition the scheme covers other electric vehicles including electric taxis where discounts are up to a maximum of £7,500, and electric motorbikes up to £500. The grants are still available in 2024 (although the government does regularly review the market and may change these in future).

Workplace EV charging

You’ll also need to consider charging points. Although the prevalence of charging points around the country is increasing, it’s still a little patchy. So it’s worth considering installing charging points at your premises. Here too there are government interventions to assist in your costs, another of the benefits of electric car fleets. The Government offers businesses financial support under the Workplace Charging Scheme (WCS). This is a voucher-based scheme that provides support towards the up-front costs. It covers the purchase and installation of electric vehicle charge-points for eligible businesses, charities and public sector organisations.

Workplace Charging Scheme

WCS provides a grant equal to 75% of the purchase and installation costs of a charge point, capped at a maximum of £350 for each socket up to a limit of 40 sockets per company. ( More information on this grant is available in our What grants are available for Electric Vehicles article.)
 

So, as I’m sure you’ll agree, there are many benefits of electric car fleets. As Registered Installers for Electric Vehicle charging points we are here to assist you with any questions you may have. If your thinking about the switch to an electric fleet we are happy to discuss your requirements. We can assist with anything with regards to how you access the WCS grants, what you’ll need and, of course, ensure the safe and compliant installation of charging points for your businesses electric fleet. To contact us today click here