Choosing an electric car can save company car drivers a fortune in tax, but what do businesses need to do to accommodate them? Here’s what you need to know…
The age of the electric car has been with us for some time, and for company car drivers, going green brings substantial savings.
Many companies have been quick to embrace the financial and environmental benefits of moving to electric vehicles (EVs). Others are being asked by their employees to make more EVs available as company cars – either for tax-saving reasons or because they want to drive something more environmentally friendly.
So what do you need to consider in order to get your business ready for electric cars? That’s what we’re exploring here.
Whole-life cost over lease rate
The textbook way to select models for a company car choice list is to compare costs per mile rather than headline lease rates. That’s because a vehicle with a lower headline cost can end up saddling your business with higher costs overall if it is less efficient or costlier to insure and maintain than an alternative with a higher headline cost.
With electric cars, this approach is even more emphatic. Leasing rates for EVs are likely to be much higher than for their petrol or diesel powered alternatives, yet when it comes to running costs, electric cars will win hands down.
Understand journey patterns
Every fleet operates in a different way, and every driver has their own set of circumstances that will influence the process of adopting an electric vehicle. The prime consideration is the ability to have a home charging point installed, because the vast majority of EV charging takes place at home.
If a driver can’t charge up at home, that doesn’t rule them out of running an EV. Depending on their mileage and commute, installing workplace chargers could solve the problem. The public charging network is improving, so local public chargers could be an option too.
The next step is to look at how an EV will impact operations, particularly for field-based drivers. The best new electric cars can cover more than 200 miles a day if they are charged overnight, but if drivers who frequently cover longer distances switch from petrol or diesel to electric, they will need to build charging stops into their routine.
Workplace charging
The Government offers a grant of up to £350 towards the cost of installing a workplace charging point, and businesses can apply for up to 40 grants across their sites. From the start of April 2022, the same grant is available to more small businesses, including B&Bs and campsites, and to registered charities.
Once a charging point is installed, the business can choose whether to make employees and visitors pay to use it. Free electricity will encourage drivers to adopt EVs, but at a cost to the business. Setting a charging cost roughly in line with what drivers would pay to charge at home could persuade drivers who cannot install a home charging point to go electric.
It’s also important to consider how to manage demand for chargers so that cars are not left charging all day while employees who need to plug in cannot do so.
Driver experience
Driving an electric car is a different experience to being behind the wheel of a conventionally powered one. Some people might need help to get the most out of an EV – especially if it’s a pool car or fleet vehicle shared with other drivers.
Driver training companies have devised specific EV courses to help new users understand features such as regenerative braking, and how to alter their driving to maximise range.
The public charging network can be confusing or intimidating for new users too. Simple guidance, such as pointing out resources such as Zap-Map (which gives details of charging points, including speed of charge, cost and availability) can ease anxiety.
Even a simple information sheet can smooth the transition for drivers converting to an electric vehicle. It could explain different charging speeds and costs, and the fact that some networks, such as BP Pulse and Ionity, have monthly subscriptions that work out cheaper for regular users.
Companies also need to consider how they will reimburse drivers for EV mileage. The Government has set a 5p per mile rate as a standard figure, but it will cost more than that to use public charging. With home energy prices rising fast, businesses need to devise a way to make sure their EV drivers are not left out of pocket.
Keyword: How to set up your business for electric company cars