Posted on: 24 March 2021
Can electric vehicles make a difference to your business?
If you were to buy an electric vehicle 10 years ago, you would have had very few options outside of the early models of the Nissan Leaf that had an estimated range of 100 miles off a full charge. Or maybe the Mitsubishi I-MIEV, Citroen C-Zero or the Peugeot iOn, all of which were almost identical, and had a limited range of around 95 miles from one charge. Without the charging infrastructure in place, batteries could take hours to charge and none of these would have been very practical choices for your business if you needed to do many miles throughout the business day.
Thankfully there has been huge advancements in the technology of electric vehicles and supporting charging infrastructure in recent years, even to the point where Renault is now developing 100% electric trucks. We are going to take a look at some of the positive aspects of owning an electric vehicle, and some of the negatives to help you decide whether or not now is the time to make the move to electric.
Why should you buy an electric vehicle for your business
Let’s start with some of the reasons to go electric.
One of the main reason that people choose to buy an electric vehicle is a positive environmental impact.
Petrol and diesel-powered vehicles are one of the biggest contributors to global warming due to the emissions that they give off, so by using an electric vehicle instead of a vehicle powered by fossil fuels, you will be doing your bit to help prevent climate change.
No loss in practicality
At the moment, it is only really haulage trucks that are lacking in electric options. There are now electric vans and electric SUVs that you could use to transport goods, equipment or tools in the same way that you would use a regular van.
Auto Express has compiled a list of the best electric vans either on the market right now or coming up in the next year.
Mitsubishi also offers its Outlander SUV as a commercial option, but only as a hybrid option at the moment.
Cost of fuel
At the time of writing, the average cost of fuel was 124.6p per litre for petrol and 129.0p per litre for diesel, and depending on the size of a fuel tank, a full top-up could cost around £60.
Electric vehicles are considerably less to charge, with some estimates coming to around £5 for a full charge. However, this may only get you around 200 miles.
It is worth bearing in mind that there are many public electric charging points, these vary in costs but some can be used for free, so filling up your electric vehicle could cost you nothing at all.
In 2017, vehicle tax rules changed, and the only vehicles exempt from having to pay road tax were electric and hybrid cars.
Businesses can claim a benefit in kind for using an electric vehicle, and can write off a benefit in kind charge for the electricity needed to charge the vehicle.
To understand more about using electric cars as a benefit in kind for tax purposes, take a look at these charts.
Businesses can also write 100% of the purchase price against their corporation tax bill.
If you are looking to buy a brand new electric vehicle, you can get up to £3,000 off the price of the vehicle through a government grant.
You can also apply for a government grant to help with the installation of a charging point for your vehicle if you use a government approved installer. You can get up to £350 off the cost of a home charging point, with Scottish applications being able to claim a further £300 from the Energy Saving Trust.
Businesses can also apply for a grant to have a charging point installed at their workplace.
Find out more about the different types of vehicles that you can claim for and how to apply for the government grant by visiting the gov.uk website.
Low emission zones
To drive in Central London, many vehicles will need to pay the congestion charge, which can cost up to £15 per day. However, electric vehicles are exempt from the congestion charge, and can freely travel around London without having to pay.
Birmingham are also introducing their own Clean Air Zone timing and charges, and whilst London’s charges are exempt on Christmas Day, Birmingham’s will be 365 days a year.
Find a list of the vehicles that are exempt from the charges here.
It is estimated by EDF that electric vehicles can cost anywhere between 30% to 50% less for servicing and maintenance costs.
This is due to electric vehicles having fewer working parts than a regular petrol or diesel engine, such as pistons, spark plugs, cooling systems, various pumps and chains.
Most electric vehicles have some kind of regenerative braking, which uses a motor to slow the car down instead of using the brakes. This will create less wear and tear on the brakes, which can be expensive to replace. You will still need to have your brake discs and brake pads changed, but less regularly than vehicles without regenerative braking.
Cons to electric vehicles for business use
One of the reasons that people are put off from buying electric vehicles is the amount of mileage that can be achieved with a full charge.
Some manufacturers claim that their vehicles can reach up to 300 miles from one charge, however, some real-world figures are significantly less, depending on driving conditions. Most electric vans have also been found to only have a range of between 100 to 200 miles according to Auto Express, which may be insufficient for some van users.
Whilst electric vehicles can save you money on tax and fuel, you will usually have to fork out extra money on the initial cost of the vehicle.
Take Nissan’s commercial vehicle fleet for example. The Nissan NV250 has a payload of 650kg, for a base price of £17,090. In comparison, the Nissan e-NV200 has a larger capacity with a maximum of 705kg for £20,005, after the government grant. However, the e-NV200 only has a range of around 127 to 187 miles, which could decrease depending on road condition, weather conditions and payload weight.
If you use your van a lot then you will also be recharging the battery fairly frequently. Most electric vehicles can fast charge to 80% in around 30 to 45 minutes, depending on the charger and connection type. Fast chargers are usually found at motorway service stations. Realistically most residential and small business charge points will change at a much slower speed.
If you rely on vans a lot for your business, this means that you may be wasting a lot of time by having to charge the vehicle regularly.
Commercial vehicle insurance with Premierline
At Premierline, we are passionate about helping you protect the business you have built. We can help you find the right commercial vehicle insurance or fleet insurance, to ensure your vehicle is covered should the worst happen.
Our business advisors work with some of the UK’s most well-known insurance providers to find a quote that provides the right cover for your business needs. Get in touch and speak with one of our trained insurance experts to discuss your insurance requirements.
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Business Guidance10 June 2020
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