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Electric fleets: Thinking about plugging in?

17 February 2022

Sales of electric vehicles (EV) across the country are increasing. The Society of Motor Manufacturers and Traders (SMMT) noted a higher uptake of plug-in vehicles in 2021 than during the whole of the previous decade. With plug-in vehicles now accounting for more than one in six registrations and battery electric cars one-in-nine, transitioning to plug-in cars is an issue that's gaining momentum for many fleet managers. More than a third (37%) of companies with fewer than 100 employees said they either already operated or plan to adopt an electric vehicle within the next three years, compared with less than a quarter (23%) in 2019, according to Arval Mobility Observatory research. It's still early days, but as the UK government plans to end the sale of new petrol and diesel cars and vans in 2030 and all new cars and vans will be zero-emission at the tailpipe from 2035, there's no doubt that electric fleets are firmly on the horizon.


The cost of going green

Switching to electric vehicles is a significant undertaking, but with larger companies leading the way, there's already a lot of good advice for small fleet managers. The Electric Vehicle Fleet Accelerator group (EVFA) is a group of prominent British businesses committed to using electric fleets to help speed up the widespread conversion to electric vehicles (EVs) across Britain. All member companies have committed to going electric and buying 70,000 British-made electric vans by 2030, accelerating the development of UK electric vehicle manufacturing. The group's recommendations could unlock private sector investment of £50 billion in infrastructure and fleets over the next five years. This move should stimulate increased demand for these vehicles, further reducing the cost and improving the availability of charging points for everyone.


Government incentives for fleet drivers

The government has introduced several measures to support the transition to electric vehicles.


EV purchase incentives

Government incentives give the following discounts on the purchase price:

  • Cars - up to 35%, capped at £1,500
  • Mopeds - up to 35%, capped at £150
  • Motorcycles - up to 35%, capped at £500
  • Small vans - up to 35%, capped at £2,500
  • Large vans - up to 20%, capped at £5,000


Charging point grants

Car charging point grants made under The Workplace Charging Scheme (WCS) for electric car charger installation, covers up to 75% of the cost and a maximum of £350 for each socket, for up to 40 sockets. When applying, businesses must have a Companies House Reference Number, own the business premises, or have the landlord's permission to install the chargers and employ the services of an authorised EV charger installer.


Road tax (vehicle tax) benefits for electric cars

The rate varies depending on whether you have an electric car, a hybrid, and the registration date of your vehicle.

  • Electric cars are exempt from the vehicle tax, so no tax payment is required.
  • Hybrid cars can attract anything between £0 - £135 road tax annually, depending on their CO2 emissions.
  • All cars registered between 1st March 2001 and 31st March 2017, with CO2 emissions less than 100 g/km, are exempt from vehicle tax.

The government is also supporting a new total cost of ownership (TCO) app that's designed to help small fleet operators switch to electric vehicles (EVs) by tracking journeys. Go for Zero app is free, and it takes between five and 20 minutes to set up your business on the system. Fleet managers complete several questions regarding issues such as the size and type of business, the vehicle's annual mileage, and where it's parked when not in use. The free journey tracking app then provides valuable data regarding working hours and after a week or so, businesses can then compare the total cost for leasing or finance on each vehicle based on charging patterns.


Congestion charge exemptions

Electric cars will not have to pay the congestion charge, which could present a significant cost saving for company cars traveling in and out of cities. The congestion charge in London is £15 per day per vehicle, between 07:00 and 22:00, every day, and with many new low emission zones being rolled out across UK cities this year, this figure is going to increase.


Capital allowances for electric cars

Cars with CO2 emissions of less than 50g/km are also eligible for 100% first-year capital allowances. This means the total cost of electric vehicles can be deducted from pre-tax profits.
We work with insurers who can manage the additional risks associated with EVs, to ensure that fleets have peace of mind that they have the right insurance cover in place.

Trade Direct is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent broker providing a wide range of policies to tradesmen and construction workers.

This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act, without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to fullest extent permitted by law.

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