The Benefits of Electric Cars For Business
Electric commercial vehicles are fast becoming mainstream across the UK; not least since the recent HGV driver shortage across the continent caused panic buyers of fuel to clog petrol stations with mass purchases and cause shortages.
When many think of electric cars, they conjure up a mental image of charging points in garages and shiny Teslas parked outside of large homes – but for the first time, more companies are realising the electric car benefits for business purposes and are adopting an electric fleet of vehicles.
With the recently introduced UK government incentives for electric cars, which helps to support businesses making the move from petrol, now’s the time to explore the possibility of a greener, cleaner vehicle portfolio.
UK government incentives for electric cars
The British government is continuing to work toward ambitious sustainability targets, and as a result, there are various grants and incentives available which form one of the most attractive electric car benefits for businesses.
The exact details of UK government incentives for electric cars vary. However, there are several relating to electric commercial vehicles. For electric cars, businesses are able to obtain up to a 35% (or £2,500, whichever is the lower) discount from the purchase price of these vehicles; whether used as part of a business fleet or as a company car option for employees.
Electric van grants also exist with the same 35% (or £2,500 whichever is the lower) discount available from the purchase price — but this increases up to £6,000 off the purchase of electric vans categorised as ‘large’. This hefty rebate is increasingly enticing for businesses that are now able to choose from a range of electric vans with similar flexibility and loading capacity to their existing diesel and petrol vehicles.
Furthermore, there are numerous benefits affecting the corporation tax relief on electric cars. Tax relief deductions vary and fluctuate, but include exemptions from fuel duty, company car tax, vehicle excise duty, van benefit charges and fuel benefit charges. One of the most alluring electric car benefits for businesses is the enhanced capital allowance benefits against them. A 100% first-year allowance means that most companies can claim the entire cost of an electric vehicle (be it a car or van, of any size) against taxable profits in the same year as the purchase.
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Many organisations will require a competitive business case to purchase electric commercial vehicles if they haven’t before, and the financial savings during both purchase and operations are one of the most impressive electric car benefits for business.
The technology behind electric vehicles continues to evolve and develop rapidly but at the time of writing, the initial purchase cost of these cars and vans are often still considerably more expensive than their petrol and diesel equivalents. However, if the upfront investment can be made, these costs can be offset by the various UK government incentives for electric cars and vans as mentioned above.
One real, tangible benefit of an electric fleet of vehicles for any business is their ongoing running costs. These costs are significantly lower than those incurred by petrol and diesel vehicles. According to the British Vehicle Rental and Leasing Association, the cost of running an electric vehicle is somewhere between two to four pence per mile: dependent on how and when it is charged.
More traditional vehicles cost between ten to fourteen pence per mile, with payable UK mileage rates for expenses at around forty-five pence a mile. This impressive saving can equate to between 80–90% of ongoing fuel costs for a business – a saving unrivalled by most sustainable transportation options.
Increased sustainability credentials
Comprehensive CSR (Corporate Social Responsibility) and thorough sustainability planning are no longer a ‘nice to have’ in corporate circles, but rather a business ‘must have’. Moving a fleet over to electric commercial vehicles or beginning to offer such choices as company cars to employees, demonstrates a business’ commitment to environmental issues and creates not just a positive PR story but also the opportunity to give back to the world in which it operates.
Innovative technological developments in electric transport mean that there are zero tailpipe emissions from these vehicles and between 15–40% less CO2 emissions made over the vehicle’s lifetime (compared to a similar-sized petrol car; this will be more for a diesel car).
With substantial cost savings to be made on an ongoing basis, numerous tax breaks, financial grants available and the ability to demonstrate an ongoing commitment to sustainability, it is clear that there are considerable electric car benefits for businesses to consider. Even the most thorough of auditing units will see the advantages in a business case, of proposing the use of electric commercial vehicles — and the environment the business functions in will enjoy it even more.
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