Simple Series: Financing Electric Vehicles
With consumer demand for electric vehicles on the rise, many businesses are making the switch to electric on all company vehicles. For obvious environmental reasons, taking steps to reduce your organisation’s carbon footprint is a good place to start in going green. However, there are also a number of financial benefits to purchasing electric vehicles.
Financial benefits:
Lower ‘fuel’ costs
Cheaper travel in London as electric vehicles are exempt from congestion charges.
Fewer maintenance costs.
Zero emissions electric vehicles are exempt from Vehicle Excise Duty(VED), more commonly known as road tax.
Low benefit in kind rate.
Government Grants:
There are a number of government grants available however they are used to incentivise purchasing electric vehicles and so won’t last forever.
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Certain government-approved low-emission vehicles are eligible to have up to £2,500 taken off when purchased new. If a vehicle can be driven at least 70 miles without any emissions at all, the dealer may include the value of the grant in the overall price.
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Only combustible fuels, such as petrol and diesel, are subject to fuel duty. Meaning that fuel duty is not applied to electric vehicles which is considered to create substantial savings for the vehicle user. This in turn contributes to VAT savings.
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The tax benefits for both employers and employees are a substantial draw for making the move towards electric. Employers may gain lower tax rates for a company fleet in comparison to conventional vehicles and improved benefit-in-kind terms for employees driving electric vehicles.
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With increasing numbers of towns and cities across the UK implementing low emission zones, having electric vehicles is a good way to avoid those charges with all electric vehicles being exempt to paying a fee.
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The Scottish government has introduced an interest-free loan offering drivers in Scotland loans of up to £28,000 to purchase a new electric vehicle with a repayment term of up to 6 years.
Company benefits:
Reduces carbon emissions significantly.
Even with lithium batteries and the source of the electricity, they are significantly better for the environment compared to petrol or diesel vehicles.
Prioritising green initiatives generates a whole new PR response. This allows companies to reach new audiences and clients who are looking to reduce their carbon footprint.
Workplace Chargers:
Investing in workplace chargers for a fleet of electric vehicles can be very advantageous.
The Government workplace charging scheme (WCS) was developed to support the transition to electric vehicles. It helps reduce the overall cost of installing electric chargers by up to 75%. With up to 40 sockets per company, this loan can reduce the overall cost of charger installation by up to £14,000.
Electric chargers also offer the possibility of a new revenue stream for the business, improve employee satisfaction, and further develop company green image.
Renewable energy:
Businesses looking to take that extra step and create a carbon-zero solution for their energy should consider financing renewable energy assets to provide electricity.
Once the renewable energy assets have been purchased, the only ongoing cost is maintenance. This means, no monthly electricity bills! With unused electricity being sold back to the grid, this provides another opportunity for improving revenue. Companies who have both EV charging stations and renewable energy assets have the potential to reduce fuel expenses to nothing.
There are also a number of grants and subsidisations available for renewables which companies can utilise.
If switching to electric sounds like a good decision for your business growth, reach out today and talk to one of our expert advisers who can help you take your first steps to a reducing your carbon footprint.