Electric cars have come to the fore in the last half decade or so, as a reality for everyday use. We’ve seen their emergence in a number of fleets and this is something only set to grow. Here’s why you too should consider introducing them.
Many people believe that if you’re making an outright purchase, electric vehicles are more expensive than the equivalent diesel or petrol vehicles. However, this image is changing due to the increasing competition among electric vehicle manufacturers.
As new models come out, prices have decreased. In the past prices have been high because of the cost of R&D and the cost of batteries.
To make the purchase of an electric vehicle attractive, some manufacturers have started selling vehicles without the battery. They can lease the battery on an additional contract for monthly payments. You should include the cost of this lease in any forecast you create.
Whole Life Costs
The whole life cost of an electric vehicle is the same or lower than a diesel or petrol vehicle in many applications. Accelerated tests show that traction batteries will have 80 percent of their original capacity after 7 to 10 years. It’s too soon to say how an aging electric vehicle or van fleet may perform in a decade or more, after being used on real roads.
Electric cars and vans have a higher initial purchase price. The cost of operating these vehicles is low, which is how leasing is a better option. In fact, some models, or their battery packs, are available for lease for this reason. Leasing also removes the uncertainty of future resale value.
There are government incentives in place for electric cars and vans, which aims at reducing the whole life costs. The Plug-in Car Grant was introduced in January 2011. The grant subsidizes the purchase of specific electric and plug-in hybrid cars. It is worth 25 percent of the cost of the vehicle, to a maximum of £5,000. Here is a list of eligible vehicles.
According to Lewis Sellers of Cheapfleet fleet insurance, private car buys and fleet buyers are eligible for the Office for Low Emission Vehicles’ (OLEV) Plug-In Car Grant. There are no applications required since the forms are completed by the dealership. The dealer will complete all of the paperwork for the buyer. This grant is automatically applied to the purchase and deducted from the price of the vehicle at the time of purchase.
In addition to the plug-in grant, there are three other incentives available that can significantly reduce the cost of operating an electric vehicle fleet:
– The London Congestion Charge’s Greener Vehicle Discount
– Zero-rated fuel tax, an electric only vehicle attracts a 5% VAT
– Zero-rated car tax on Vehicle Excise Duty
Electric vehicles are exempt from the car tax or the Vehicle Excise Duty. Electric vehicle owners can save about £130 each year compared to the average diesel or petrol vehicle (VED Band F).
Fuel and Running Costs
Fuel costs are low because of the price of electricity. And remember the zero-rated fuel duty. The low cost is also because of how efficient the vehicles are. Fuel costs for electric vehicles may be as low as 2p for each mile. This depends on the tariff. If you drive approximately 10,000 miles each year, switching to an electric car can save you more than £800 in fuel costs. This is a great reason to switch from a conventional vehicle to an electric one.
For drivers in London or around the city, one of the main costs of running a vehicle is the Congestion Charge. Many electric cars receive a Greener Vehicle Discount on this charge, although the vehicles need to be registered and you’ll need to pay a £10 annual fee. With a £10 daily congestion charge, you could possibly save £2,000 annually.
– Currently electric vehicles from the approved list are eligible for a 100 percent capital allowance against profits for corporate tax in the year of purchase.
– Electric vehicles have ZERO road fund license
– Company car drivers can benefit from the ZERO benefit in kind for the ZERO tailpipe emission vehicle