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This article was updated on 16 June 2022
Electric vehicles for business have been increasing in popularity in recent years due to their environmental benefits, lower running costs, and a range of government incentives.
Read on to find out more about the pros and cons of having an electric vehicle for your business, as well as a rundown on some of the best electric business cars and vans.
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Electric vehicles have many financial and environmental benefits for businesses. However, there are some cost and performance downsides that you’ll need to consider.
If you buy an electric vehicle for work, you can benefit from lower congestion charges and money towards installing an electric vehicle charge point.
Drivers of electric vehicles used to be able to claim between £1,500 and £16,000 depending on the type of vehicle they bought.
In June 2022, the government announced that it was closing the low-emission vehicles plug-in grant with immediate effect. The funding is now being used to improve electric vehicle charging.
If you have to travel into urban areas for work, there is a range of benefits to having an electric van or car:
One of the reasons some business owners are unsure whether to buy an electric van or car is due to the cost and availability of charging points.
In response to this, the government has introduced an Electric Vehicle Homecharge Scheme, which offers up to 75 per cent towards the cost of installing electric vehicle charge points at people’s homes.
There’s also the Workplace Charging Scheme, which offers vouchers towards the cost of buying and installing an electric vehicle charge point at a workplace.
If you buy a vehicle for your employees to use as a company car, they’ll need to pay company car tax and you’ll need to pay National Insurance at 13.8 per cent.
The benefit in kind tax rate for employees with electric cars and vans used to be 16 per cent. However, it was reduced to zero per cent in April 2020, rising to one per cent in April 2021, and two per cent from April 2022 to April 2025.
This means it’s now a lot cheaper to have an electric company car. What’s more, the benefit in kind tax rate for higher emissions vehicles is over 30 per cent, meaning electric car drivers make a significant saving.
Electric vehicle owners are also exempt from the following:
If you buy an electric business vehicle personally (rather than as a company car), you can claim 45p per mile as a business travel expense, despite the cost of an electric vehicle being an estimated 4p per mile.
The movement encouraging more people to use electric cars has been driven by the government, which announced its plans to ban the sale of new petrol and diesel cars in the UK by 2030.
Research from Ofgem suggests that more than 6.5 million households have plans to buy an electric or plug-in hybrid vehicle. Meanwhile, the Department for Transport estimates that there are currently around 500,000 ultra-low-emissions vehicles on the road in Britain.
On top of the environmental benefits, there are plenty more reasons for business owners to go electric, such as the government’s clampdown on petrol and diesel vehicles, initiatives like ULEZ, and various tax incentives.
For customer-facing businesses operating in towns and cities, there’s a clear Corporate Social Responsibility (CSR) benefit in showing that you’re committed to reducing your carbon footprint.
And even if your business isn’t consumer-facing, such as a driver delivering manufactured goods, the amount of emissions saved across long journeys each year will likely be enough to make you consider the pros and cons of going electric.
If you’re thinking about getting an electric car or van for your business, there are lots of options to choose from. Here’s an overview of six popular electric vans and cars for small businesses.
This van has a ‘real-world’ driving range of 100 miles before it needs charging, as well as a 40kWh battery pack. It’s recommended for business drivers who do low mileage in the city and could set you back £30,000+.
Made by ABT and sold by Volkswagen, this van has an 82kW battery pack and a claimed range of 82 miles. It’s likely to cost more than £40,000 and is recommended for drivers who average 50 miles a day.
This van allows drivers to slow or coast while driving, boasting a 93 mile range and 85kW motor. It’s known for its good storage and lack of fast charging, and will likely cost around £40,000 to buy new.
This car has a range of 168 miles and takes up to 18 hours to fully charge. It’s known for its heated front seats and steering wheel and costs just under £30,000 new.
With a charging time of 20 hours, this car benefits from a range of 179 miles. It has a hill-start assist and electronic stability control, costing around £28,000 new.
Although it takes 42 hours to charge, this car boasts a range of 259 miles. It also offers a rear view camera and fast acceleration. To buy new, it’ll cost at least £60,000.
There are good reasons to take either approach. An electric car business lease reduces the upfront cost and gives you a better chance of keeping up with technology developments such as increased time between charges.
On the other hand, there are lots of financial incentives for buying an electric business vehicle and the running costs after your initial outlay are likely to be very low.
Whatever you decide, it’s important to do your research and think about the long-term impact it could have on your business.
Are you considering buying an electric vehicle for your business? Let us know in the comments below.
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