The rise of electric vehicles in the UK seems unstoppable with EV market share overtaking diesel models for the first time this year.
Car buyers are deserting the diesel in droves, with a 51% annual drop in sales of those fossil-fuel vehicles. There were 38.025 diesel car sales in the year to May, while dealers sold 95,512 Battery Electric Vehicles (BEVs), an increase of 71.2% over the same period. Diesel’s market share is now 5.8% and BEV is 14%, nearly double that of last year.
Fossil-fuel driven petrol models, unsurprisingly continue to dominate the market but the signs of change are there, with sales of petrol cars dropping by 18.8% year-on-year. Hybrid vehicles also did well, with a 35.9% increase in sales (35.9%), meaning deliveries of electrified vehicles accounted for three in 10 new cars, according to data from trade body the Society of Motor Manufacturers and Traders (SMMT).
The rapid rise in EVs on UK roads is against a backdrop of recent soaring diesel and petrol prices, and the commitment by government to push for 1 in 3 cars driven in Britain to be electric-powered by the end of the decade, when a ban on all new fossil-fuel model sales also comes into force.
Companies move to EV
The British Vehicle Rental and Leasing Association’s forecasts that the fleet sector will registering 400,000 BEVs per year by 2025, making it responsible for 80% of new battery electric car and van sales. The majority of plug-in cars are registered to businesses rather than people and 58.8% of all electric cars on the road are company registered.
This is not so surprising, given the fact that businesses receive more generous incentives to make the switch than those offered to private drivers.
Incentives are a crucial driver in the push for a low-carbon transport system in the UK and government tax breaks mean it is a perfect time for companies to move their vehicle fleet to electric. Businesses of all sizes can make the most of the financial advantages from the Super Deductions benefits that are available until March 31st 2023.
These allow companies to cut their tax bill by up to 25p for every £1 they invest. The Super Deductions cover EV chargers and solar panels so firms can move to EV at less cost but also can harness renewable energy to help charge their vehicles with solar panel installations.
Companies investing in EV chargers (among a range of other qualifying plant and equipment) will be able to claim: a 130% super-deduction capital allowance.
The government says:
“These are designed to encourage companies to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now.”
EV charger grants
The Super Deductions for EV chargers add to the big benefits already available for electric fleets, including the OZEV (Office for Zero Emissions Vehicles) grant scheme providing £350 per socket and up to 40 chargers.
The grants also cover some costs if firms choose not to go for a full purchase-installation package from an approved supplier but buy their own EV chargers. They can claim for the installation, as long as the chargers meet minimum technical requirements.
Great EV tax benefits
Add to that the lower Benefits in Kind (BiK) rates for EV drivers compared with internal combustion engine (ICE) vehicles, which deliver big savings and it’s well worth moving quickly, as conditions change rapidly. The company-car tax on electric vehicles is just 2%, far below petrol and diesel vehicles, as well as plug-in hybrids.
These other vehicles come within a new set of bands rising to a maximum of 37%, depending on emissions. Some diesel vehicles also attract an extra 4% supplement.
There’s no argument about the financial advantages of EV and companies making the move early have seen 20-25% savings because their electric fleet vehicles are more efficient, use more affordable fuel and cost much less to maintain. By 2040, electric fleets should have a 15-25% lower total cost of ownership than those with fossil-fuel models.
It’s also worth remembering that electricity is still much less expensive than petrol and diesel and the prices are more predictable.
The number of medium and heavy-duty EV models will double over the next two years, so every need should be covered. A combination of rapidly expanding public charging networks, ultra-fast charging, and smart chargepoint solutions, should relieve any remaining range anxiety.
Cheaper cost of ownership
While the costs of EV lifetime ownership are already cheaper than fossil-fuel vehicles, and rapid reductions in battery costs that should mean many EVs will have a similar price to internal combustion engine (ICE) vehicles within four years.
Companies also gain big benefits from the superior technology of EVs, with fewer moving parts that need much less maintenance, including no oil changes and practically no part replacements. That means fleet vehicles spend more time on the road and less time in the garage.
The move to EV also will help companies in their quest for enduring and forceful sustainability policies and keep pace with evolving government regulations around the electrification of the transport sector.
For companies focusing on improving Environmental, Social and Governance (ESG) aspects of the business, moving to electric fleets also gives a clear signal to investors, customers and clients that they are actively working on environmental impacts.
EVs can lower carbon emissions by more than 50% if the electricity used is from renewable sources. Going electric mean that firms can have the best of both worlds, with cost-effective and efficient fleets while reinforcing their environmental credentials with increasingly eco-conscious consumers.
Call us now on 0333 123 5464 to discuss the next steps for your move to EV.