Changing a business fleet to electric: Everything you need to know
- Tuesday, August 8, 2023
- Posted By The Growth Company
Switching your company fleet to electric, whatever industry you’re in, is a big and expensive task but with significant benefits to the business, your drivers and the environment, it’s certainly worth the risk. Electrifying your fleet will not only help reduce your organisation’s environmental impact but it will also come with significant cost savings (after the initial investment) and improve your reputation.
Switching your fleet to EVs is a simple and clear way of showing how serious you are about reducing your carbon footprint and moving towards net zero carbon emissions to customers, employees and talent.
Switching to EVs now also shows people that your business is forward-thinking as you’re acting ahead of the ban on new petrol and diesel vehicles which will come into effect in 2030.
There are also financial benefits to switching to an electric vehicle fleet as EVs can cost up to 80% less to run than the combustion engine models they’ll replace. Maintenance and fuel costs are much lower on EVs, making them worth the initial payout. Plus, you’ll reap the benefits of reduced vehicle tax for every vehicle you switch to electric.
If your brand-new EV is used for both business and personal road trips, you can still reclaim 50% of the VAT part of the business contract hire cost.
Monthly payments can be set against profits for any new EV that has emissions of 50g/km or below. This can save your company up to 19% on tax. For cars that are above 50g/km, you can still claim 85% of your monthly payments.
You can also pay less National Insurance if you run an EV salary sacrifice scheme. The employee will give up part of their pay to get a new EV,
which means they’ll have a lower gross salary. That doesn’t just mean they pay less Income Tax, it also means both of you will pay less National Insurance.
Employees do have to pay Benefit In Kind (BiK) - or company car tax - on cars driven through a salary sacrifice car scheme. But drivers of EVs pay a fraction of the BiK tax that drivers of petrol or diesel cars do. Until 2025, EVs will pay a BiK rate of just 2%. That compares with between 22 - 40% for petrol or diesel cars.
Until 2025, EV drivers won’t have to pay any road tax. Plus as EVs are also compliant with clean air standards, drivers won’t have to worry about any extra emissions-related charges or congestion charges like those in Central London.
The availability of chargers is a big concern for many businesses and drivers thinking about making the switch to EVs as no one wants to be stuck because they can’t charge their car. However, new charging infrastructure is being installed all the time and many local authorities are committed to increasing availability before the 2030 ban on new petrol and diesel vehicles.
Support like JoosUp and Electroverse make it simple to access and use public electric vehicles, you can locate chargers and use one provider to pay for any charger in the UK
For onsite charging facilities, companies can take advantage of the government-funded Workplace Charging Scheme too. This is an allowance for employers who want to install EV charge points covering up to 75% of the total cost to buy and install chargers. It’s capped at £350 per socket with a max of 40 sockets per business so should support businesses of all sizes.
Electrifying your organisation's fleet needs to be taken step-by-step to ensure you’re investing in the right solutions for your business. So, where do you start?
Any business needs to begin by framing the argument for moving to electric vehicles (EVs) and creating the business case. You can do this by yourself or with the help of a fleet management company.
Firstly, you need to establish the reasons behind electrifying your fleet including the lowering of CO2 emissions, reduced fuel costs, lower maintenance bills, low taxes and better experiences for the driver, to name just a few.
Once you’ve identified your reasons for switching to EVs, it’s time for a fleet review, which means assessing the suitability of your company car drivers to go EV. Take a look at the typical business mileage and commuting distance of your employees and establish whether this could be performed comfortably in an EV. Think about the types of EV chargers you need and where they could be installed both at the workplace and in your driver's homes.
Look at the structure of your fleet and which employees need an EV to complete their job. Consider leasing options and salary sacrifice schemes to make sure everyone who needs an EV can have equal access to them.
Firstly, you need to consider the installation of EV Chargers at work. You cannot encourage EV use without providing the infrastructure to support it. Having EV chargers at work will encourage EV use across the business and will support your carbon reduction policies, helping to enforce your change of fleet. The Workplace Charging Scheme will support the installation of up to 40 sockets in your workplace. Eligible businesses can claim up to 75% of the purchase and installation costs, up to a maximum of £350 for each socket.
If you need to install a lot of chargers, you must contact Electricity North West to complete a site survey so you can determine what electricity supply is required and the amount of available capacity at the site.
Businesses should also consider supporting staff with the installation of an EV charger at home, helping them to get to and from work or complete daily tasks. Currently, the cost of the installation can be subsidised with a government grant called The Electric Vehicle Homecharge Scheme. This assists towards the cost of installation worth up to 75% of the installation cost (including VAT) but is limited to £350. Most installations cost between £800 to £1000 so an employee can expect to pay around £500. As an employer, you might wish to consider how you would help with these costs.
Changing to EVs is a big step and will transform the way your business operates. Therefore it’s important to keep your staff informed by communicating the changes you are preparing to make and what it means for them. Ensuring employees understand the change is critical to helping with a smooth transition. Communicating the benefits and simplicity of EVs may encourage take-up in businesses encouraging rental and salary sacrifice schemes, but it will also fill fleet drivers with confidence in their new vehicles.
In terms of timing, if you can it’s best to switch your fleet over to EVs as any leases come up for renewal. But this means ensuring you have enough time to plan and implement the switchover to EVs, including ordering the vehicles and installing charging infrastructure.
Changing at the renewal stage will allow you to deal with small batches of drivers at one go. This means you can test different vehicles and address any issues gradually as you continue your EV rollout. You can also gain employee feedback and address any issues before you change your entire fleet.
To learn more about switching to EVs and how the Bee Net Zero partnership can help, visit our EV campaign page.