Why Choose An Electric Car For Business?

8 benefits of choosing an electric business car

There are many business leasing benefits for companies looking to transition to EVs. Here are some of the main areas to consider:

1. Reduced running costs

Running a fleet is costly for many businesses, especially with the price of fuel fluctuating unpredictably. In comparison, running an electric car offers significant savings against traditional fuel costs.

Comparing the electric BMW i3 with a petrol and diesel BMW 3 Series Saloon on Zap Map's journey cost calculator, for example, provides the following estimates for a 100-mile journey:

• BMW i3 – £7.88
• BMW 3 Series Saloon (petrol) - £16
• BMW 3 Series Saloon (diesel) - £14

This provides significant savings compared to traditional fuel, even against the diesel variant.

2. Lower tax rates

When choosing an electric vehicle, company car drivers get significant savings on Benefit in Kind tax. The current rates (2022-2025) start at 2% for electric cars and 23% for hybrids. The amount an employee pays in company car tax is also based on annual salary and the vehicle's value. With an electric car, you'll reduce the overall tax amount considerably, sometimes by hundreds of pounds!

Employees driving a company car can also claim 9p per mile. Plus, charging an EV at work is also tax-exempt.

For more information on BIK and claiming back tax, check out our guide to company car tax.

Another cost of running fleet vehicles is the road tax. However, moving to a fully electric fleet has another benefit – zero vehicle excise duty (VED). This charge is calculated on the emissions at the tailpipe, and as there are none, you don't have to pay road tax until 2025.

That said, hybrid vehicles incur road tax charges, typically between £0 and £105 in the first year, depending on the emissions. Subsequent tax years cost £145 per year. However, if you opt for an electric business car lease, road tax is included in the monthly cost.

More tax benefits companies enjoy with electric car leasing are claiming VAT back on monthly instalments. If your fleet is used partly for personal use, you can get 50% VAT back, but if the car is only used for business purposes, such as a pool car, you can claim 100% VAT back.

3. Lower maintenance costs

Electric cars are slightly different from conventional vehicles because they don&Apos;t have as many moving parts. There&Apos;s no engine, complex exhaust system, radiators or injection system. This means servicing and general maintenance overall are reduced.

The battery is an element to consider when owning a vehicle for longer than eight years, as it begins to degrade. However, this is a minor concern with lease vehicles, as you can switch to a newer car at the end of the contract period.

Additionally, if you take out a maintenance package with your car lease, you can claim 100% VAT on this cost.

4. Better for the environment

With no emissions from the exhaust, electric cars provide greener and more efficient business travel. This is particularly important for companies looking to reduce their carbon footprint and do their bit for the environment. In addition, your fleet is not contributing pollution to the local communities.

5. Avoid congestion and clean air zones charges

If your fleet of cars and vans drives into London or other low-emission zones, the savings on congestion charges are substantial. For example, an electric vehicle driving into London daily could save around £5,000 on congestion and ULEZ charges compared to driving a diesel car.

When you have several fleet cars, this total soon adds up. As other cities decide to introduce similar low-emission zone charges, this will also save money if you do business in these areas.

6. Grant for workplace charge points

The government is ramping up its electric charge point installation target across the UK. This will improve accessibility to all EV drivers, including company cars. However, to help improve the transition, businesses can access the Workplace Charging Scheme (WCS) grant to install charge points at numerous premises.

This voucher-based scheme gives eligible companies access to upfront funds to purchase and install EV charge points. The grant provides up to 75% of the cost of buying and installing the equipment with a cap of £350 per socket.

Companies can apply for up to 40 sockets across business sites. So, as an example, if you have 20 locations, you can get two sockets per site. This grant is a great way to make the move to electric easier and gives EV drivers access to electric for work use.

7. Help enhance your business reputation

are introducing Corporate Social Responsibility (CSR) policies to move towards a carbon-free future. Switching to an electric fleet provides a sound footing for going green.

Committing to better environmental policies not only benefits your bottom line but also improves your business reputation. Consumers want to see organisations making positive changes, and moving to an EV fleet can help push this forward.

8. Increase employee satisfaction

Offering a company car to your employees is an excellent employee benefit. Perks of the job help to improve morale and increase productivity. Plus, it's a great way to encourage greener travel while enabling access to high-spec and high-tech cars with reduced Benefit in Kind tax rates.

Should businesses choose electric fleets?

Switching to an electric fleet is a significant consideration for many companies. There are many benefits (as mentioned above), and the overall cost reductions over the course of the lease agreement provide a top reason to consider EVs over petrol and diesel.

One of the common misconceptions about electric cars is they don't provide enough range for business travel. However, modern models prove otherwise. Brands such as Tesla, BMW, Volkswagen and Kia have cars that provide over 300 miles between charges. Plus, with fast-charge capabilities, if you need to top up on the go, just a 15 to 30-minute boost offers ample energy to finish a journey.

For these reasons, switching to an electric fleet makes sense for many businesses.

Can hybrids help to save businesses money?

If you're considering the benefits of an all-electric fleet but aren't quite ready to take the leap into zero-emissions, opting for a hybrid business car lease is a great alternative.

Hybrids combine electric and petrol or diesel, so you have some pure electric power and the backup of a combustion engine.

Some of the main benefits of hybrid vehicles include:

• Lower BIK rates for employees
• Up to 30-40 miles electric range (depending on model)
• Fuel-efficient
• Don't have to rely on charging
• Lower road tax charges
• A vast range of models and brands to choose from
• Requires less maintenance
• Lower CO2 emissions

Electric commercial vehicle deals at Leasing Options

There are numerous benefits for businesses looking to move their fleet to electric vehicles. At Leasing Options, we can make the process super simple and affordable with our range of electric car business leasing deals. You'll find cars and vans from top EV manufacturers such as Mercedes-Benz, Citroen, Ford and many more. So, check out our range or chat with our team for more information on going electric.