There are a lot of expenses associated with company cars that can put employees off, but electric vehicles offer a more affordable alternative.
With the government bringing the ban on new petrol and diesel cars forward to 2030, it makes sense for businesses to start switching their fleets to electric.
According to Go Ultra Low, 70% of employees want the option of electric vehicles as company cars, and 63% would choose an electric company car if they could.
Electric company cars can give employees and customers the eco-friendly options they want, while allowing your business to benefit from a range of financial incentives.
Let’s take a look at all the savings you could make by switching to an electric company car.
Lower running costs than petrol or diesel
Electric vehicles are becoming increasingly affordable as more models hit the market, and there’s even a government grant to help pay for electric vehicles.
With up to £3,500 off for electric cars and up to £8,000 off for electric vans, you’ll be saving money right out the gate.
Once you have an electric vehicle, servicing and repairs will be much cheaper because of the limited number of parts compared to petrol or diesel vehicles.
Some of the biggest savings come from fuel costs, with electricity costing 4p per mile and petrol costing 10p per mile on average.
For businesses operating in cities like London with a Congestion Charge and Ultra Low Emissions Zone, driving an electric car means you can access all areas of the city without having to pay emissions fees.
Without paying the daily Congestion Charge of £15 and ULEZ charge of £12.50 for vehicles with higher emissions, you’ll save thousands of pounds a year.
These zones are likely to become the norm for major cities across the UK in the coming years as local councils tackle climate change and pollution.
Councils are also planning other incentives like cheaper parking for electric vehicles with green number plates.
Meanwhile, petrol and diesel vehicles are only going to get even more expensive to run as they’re phased out, with higher fuel and maintenance costs and heavier taxes.
More tax benefits for electric cars
First of all, fully electric cars are completely exempt from paying Vehicle Excise Duty.
Hybrid cars with lower emissions also have lower vehicle tax rates, while heavier polluting petrol and diesel cars could cost you up to £2,175 in the first tax year.
Zero-emission electric cars are also eligible for the Enhanced Capital Allowance.
This means you can deduct 100% of the vehicle’s cost from pre-tax profits in your first year of ownership, saving thousands of pounds in Corporation Tax.
From April 2021, hybrid cars with 1-50g/km emissions will be eligible for an 18% allowance.
Company car drivers who also use the car for private purposes have to pay a benefit in kind tax, but this is also extremely low for electric vehicles.
Since April 2020, zero-emission vehicles were exempt from paying a benefit in kind tax, with the rate rising to a tiny 1% in 2021 and 2% in 2022.
This rate will stay frozen at 2% until 2025, while cars with emissions higher than 50g/km could be taxed at 16-37%.
Helps the environment and improves company image
Making environmentally responsible choices like going electric is good for the planet and good for business.
Switching to cars with zero or low emissions helps to reduce air pollution and minimises your contribution to climate change.
You’ll be participating in global efforts to bring emissions down to net zero and creating a healthier environment for local communities at the same time.
Sharing your company’s efforts to reduce its carbon footprint can also improve your brand’s reputation.
Consumers are becoming increasingly environmentally aware, with 84% of people saying they wouldn’t buy from a brand if it wasn’t eco-friendly enough.
Boosting your brand’s green credentials can also attract clients and partners who want to work with like-minded companies investing in sustainability.
More choice and capability than you think
In previous years, people might’ve been put off making the switch to electricity because of limited options and facilities.
These concerns are becoming a thing of the past, with more leading manufacturers releasing electric or hybrid models and a growing network of public chargers giving even long-distance drivers the range they need.
Many electric cars can travel around 100 miles on a fully charged battery, and you can quickly find a charger using services like Zap Map if you need one.
The technology is constantly improving, and the variety of pure electric and plug-in hybrids on the market today makes it easier to find a model suitable for your business needs.
Whether you want an affordable electric van or a luxury electric car for your fleet, there are comparable price options to petrol and diesel cars.
The electric and hybrid models then have the bigger benefit of post-purchase savings in reduced running costs and taxes.
Government grant for workplace charging facilities
Powering electric company cars is made easier by the Workplace Charging Scheme, which helps to pay for the installation of EV charging points.
The government will fund up to £350 of the cost when you install an electric vehicle charger, for up to 40 charging sockets.
Go Ultra Low found that at least 30% of employees are keen for their employers to install workplace EV chargers, which would allow them to charge their electric vehicles during working hours.
It’s also easy to keep your fleet fully charged if they stay plugged in overnight.
Businesses can also choose to make their chargers available to the public at certain times and charge users for the electricity for a little extra profit.
Remember the Enhanced Capital Allowance for electric cars?
This also applies for electric vehicle chargers, so the business can deduct the cost of the chargers from pre-tax profits, too.
Contact Downtown Electrical to install EV chargers for your business and we’ll apply for the Workplace Charging Scheme for you to get those savings started.
If you haven’t made the change to electric company cars yet, now’s the time.