EVs and businesses
An EV makes financial sense if you're a business owner, and it's a positive move for the dwindling environment.
Besides EV infrastructure grants and benefit-in-kind tax benefits, having an electric car offers substantial cost reductions during the ownership period. When comparing the operating costs of a diesel or petrol vehicle, they use around 8p to 10p per mile, compared to EVs, which use just 1p per mile.
And with minimal moving parts, you don't have to worry about maintenance costs. In this post, we'll discuss why business owners should consider swapping standard motors for electric cars. Keep reading to learn more about what you can gain from EVs.
Pros and Cons of Electric Vehicles
They substantially reduce emissions to the environment
They are energy efficient
They minimise maintenance costs
5 Benefits of EVs to businesses in the UK
The cost of EV battery packs has placed electric cars above traditional motors in terms of price. However, according to an energy finance report that Bloomberg released, battery pack costs have reduced by more than 87% between 2010 and 2020 due to better cell chemistry and economies of scale.
Presently, battery packs cost approximately £118/kilowatt-hour of capacity – but this cost is expected to reduce by more than half in the coming decade. By 2024, the upfront cost of electric cars will compete fiercely with traditionally-fueled cars. The new lithium sulphur batteries can help to double EV battery capacities. However, they are still undergoing research and development and might take several years to be commercially available.
All these factors indicate that purchasing an electric vehicle now will still be beneficial for your business even in the future.
Benefit-in-kind tax benefits
When you purchase an electric car to be used as a company vehicle, you're entitled to a 1% tax offered as a benefit in kind. However, you must pay the benefit-in-kind tax if you intend to use it for personal and business purposes.
This rate was previously set at 16% for electric vehicles but was reduced to 2% in April 2022. However, the figure is expected to increase progressively until 2025. The benefit in kind taxation rate for higher emission cars is set at more than 30%, meaning an EV can help your business make massive savings on tax obligations.
Speaking of tax savings, EV owners are exempted from paying other taxes such as:
EV infrastructure grants from the Government
When you purchase a new electric car for business use, you may be eligible for the low-emission vehicles plug-in grant that the UK government offers to cover vans, cars, motorcycles, mopeds, taxis, and trucks. The government's maximum grant is £2,500, and the payout for trucks and vans ranges between £3,000 and £16,000.
This government grant is offered to select manufacturers and dealerships; therefore, you may need to identify the brands this scheme covers to be eligible. Fortunately, there are numerous popular vehicle manufacturers you can pick from, with renowned vehicle models like the BMW i3, Renault ZOE, Kia e-Niro, and Fiat 500e.
Workplace Charging Scheme (WCS)
Many business owners are often sold on the concept of purchasing and owning an electric vehicle, but the reality of having to charge it tends to be the main sticking point. To solve this and encourage more people to switch to EVs, the government launched two schemes - the Electric Vehicle Home Charge scheme (EVHS), now called the EV chargepoint grant, and the Workplace Charging Scheme (WCS).
The EV chargepoint grant (previously known as the EVHS) is the new Government grant scheme which allows qualifying applicants to claim funding towards the installation of Electric Vehicle (EV) chargers. On the other hand, the Workplace Charging Scheme (WCS) offers vouchers to a business to cover the cost of purchasing and installing electric charge points at its premises. As a business owner, you can take advantage of this scheme and save significantly on installing these charge points.
So, can business owners enjoy financial benefits when they drive to and from work in urban areas? The answer is yes. In London, electric car owners are usually exempted from paying congestion charges, saving them around £15 daily, amounting to £300 monthly.
In addition, electric vehicle owners can save around £12.5 daily with the Ultra-Low Emission Zone (ULEZ), which is being rolled out across Birmingham. Bath, Bristol, Manchester, and more. Businesses can make the most of these benefits by using electric cars or vans to transport their staff and products to and from work.
The bottom line
Business owners can enjoy myriads of advantages by purchasing and owning electric vehicles. The operating costs are significantly lower and will only cost you a fraction to charge the vehicle compared to what you'd have spent on fuel. The UK government also offers a vast range of tax breaks and incentives to save on running the business vehicle.
Importantly, owning an electric vehicle for your business means contributing to the Green Industrial Revolution and saving more than a million grams of CO2. This initiative aims to make the UK carbon-neutral by 2050 and includes the use of hydrogen, wind, and nuclear power, as well as the development of energy-efficient homes, carbon capture, and cycling and walking infrastructure.
Now that you understand the benefits you, as a business owner, and your business can enjoy from using electric cars, vans, and trucks, you can correctly determine whether your business requires an electric vehicle.