How to encourage EV Leasing in your business
- Tuesday, August 8, 2023
- Posted By The Growth Company
Commuting employees account for a large amount of a business’s carbon emissions. It’s one thing to decarbonise your building, cut your waste and install renewable energy sources, but if your workforce is largely getting to work using petrol and diesel cars, your net zero goals will remain out of reach.
Firstly, we need to say that using cars for a commute should always be a secondary option. Public transport and active travel have far less impact on the environment and should, therefore, always be the first choice. So, before you look into EV incentives, consider whether there are schemes which promote an even more sustainable mode of transport like season ticket discounts or cycle-to-work schemes.
However, we also understand that not all businesses are accessible by public transport. As much as Greater Manchester is working to improve its public transport infrastructure, we have a way to go, and it’s not feasible to ask someone to cycle from Oldham to Trafford for work. It’s also the case that many employees need a car to juggle work-life commitments like childcare and school runs or even to combat accessibility issues, meaning for many a car is the only viable option to commute.
Since the introduction of valuable Benefit in Kind tax savings for low-emission cars, the demand for electric vehicles has skyrocketed. For many users, an EV salary sacrifice scheme can offer big savings on income tax and National Insurance, making it a very tempting proposition.
When an employee needs to drive to work, and public transport or active travel isn’t an option, an EV is the perfect low-emission choice. With the UK-wide phasing out of new petrol and diesel vehicles from 2030, the switch to EVs will eventually become inevitable. As an employer, you can help your employees stay one step ahead of the curve as well as help lower your organisation’s and their own carbon footprint.
Many employers can now provide a new benefit that allows employees to lease an electric car from them through a salary sacrifice scheme. Salary sacrifice, known as ‘sal-sac’, allows employees to reduce their cash earnings in return for a non-cash benefit, such as an electric car.
The monthly deduction comes before tax and national insurance, therefore saving the employee and the company money as they’re paying considerably less tax, especially when you consider that EVs have a lower car tax (VED) for zero-emission vehicles. This hopes to help encourage the switch to electric cars.
It sounds simple, and it largely is, but implementing the scheme and encouraging take-up is another thing.
As an employer, you need to ensure that the EV salary sacrifice scheme you opt for suits the needs of your employees. With more and more schemes coming to market, it’s important to learn the difference between offerings. For example, do they require a deposit? Do they have a large range of vehicles to choose from? Does the cost cover insurance? Will it cover your servicing and MOT in the future? Does it include the cost of an at-home charger or discounts on public chargers? There’s a lot to consider. To encourage take-up, you need to find the most tempting offer for employees that will provide the best value for money and make their lives easier.
The car expert has compiled a comparison of 14 leading EV salary sacrifice schemes.
When looking to implement your EV salary sacrifice scheme, you need to understand the ins and outs, which may mean asking difficult questions including what happens if an employee leaves the company or is made redundant. Will they be lumped with a large bill or have to hand back the car? If you can get an accurate understanding of all of these things, it will be easier to explain to your employees which will make signing up less daunting. Fear of the unknown will often prevent people from taking up new tech like EVs so having all of the answers in one place will be incredibly useful in tempting them.
It’s going to be virtually impossible to encourage the take-up of electric vehicle leasing in your workplace if you don’t make it easy for employees to charge their vehicles on-site. We’re at work for 8 hours every day, sometimes even longer, and this is an ideal time for employees to charge their vehicles ready for the journey home.
Make sure your business is committed to installing the correct infrastructure and has enough to meet demand. Encouraging EV leasing with only one charger will only cause you problems in the long run. With workplace charging grants available from the government, financial support is available to install up to 40 chargers per business, across all sites. The grant covers up to 75% of the total costs of the purchase and installation of charge points, capped at a maximum of £350 per socket.
A workplace EV charging policy is a set of guidelines that regulate how EV charging points located on workplace premises can be used. They lay out the rules for employees’ use of workplace charging points and any visitors who may also have access to them. It helps to ensure use is fair and keeps operations running as teams will know who to contact when a charger breaks etc.
Your Workplace EV Charging Policy should include analysing demand by surveying employees about their commute, the types of EVs they use and more. Knowing driving habits will allow you to create a policy tailored to their needs.
Your Workplace EV Charging Policy will also include a funding model. This may already be dictated by your charge point provider, but if not, you have more control. Some workplaces offer free charging as a further incentive and benefit for employees others charge a small fee to support the business case and to help manage demand for chargers. You must decide on a funding model depending on the culture, size, financial stability and nature of your business.
One of the most important parts of your Workplace EV Charging Policy however is rules around use and access. Make sure you have designated chargers for visitors and set limits around how many hours a day employees' EVs can charge (or similar) to ensure that no employees take advantage and leave others struggling to charge their vehicles. Establishing a charging etiquette early on will avoid any charge-point conflicts. It will also allow you to clear up how to use equipment correctly to ensure the longevity of your investment.
The switch to EVs is the biggest change to how we travel in a generation and isn’t something we should take for granted. Communicate the details of your EV charging scheme to employees clearly through a variety of methods; display the benefits, host Q&A sessions or webinars explaining the details and make sure all information is easily accessible and employees know who to contact if they have any questions.
To have the confidence to adopt the salary sacrifice scheme and switch to EVs, employees need to understand the tech, what it means for them and how your business will manage such a seismic shift in transportation.
Bee Net Zero is helping businesses from across Greater Manchester to understand the logistics around the adoption of EVs from installing charging points on your premises to promoting salary sacrifice schemes to your employees. As we all prepare for the biggest change in how we drive in generations, the partnership’s collective support and guidance hope that Greater Manchester businesses can lead the way when it comes to electric vehicles.
To learn more about switching to EVs and how the Bee Net Zero partnership can help, visit our EV campaign page.