Becoming an owner of an EV or Hybrid has a high price tag. There’s the purchase of the vehicle and paying for the installation of the charging unit. However, owning Electric or Hybrid vehicles could be a business investment that will save you a lot of money long term.
Every Penny Counts
To give you an idea on savings, a Volkswagen e-Golf covering around 8,000 miles a year will add around £300 a year to an electricity bill. A petrol or diesel Golf covering the same mileage, would probably cost £1,000 or more in fuel.
For those of you based in London, all EVs (currently defined as vehicles that emit up to 75 g/km CO2, have a minimum electric range of 20 miles, and meet at least Euro 6 emissions standards) are eligible for the Cleaner Vehicle Discount. This is a replacement for the Ultra-Low Emission Discount (ULED) and will require you to pay a £10 fee annually to register. If you drive in London everyday, you will be saving over £10,000 because of the 100% discount. You would be saving yourself £27.50 a day (excluding the 25th December).
From Monday 25th October 2021, the cleaner vehicle discount will change so that only battery electric or hydrogen fuel cell vehicles are eligible. Then from the 25th December 2025, the cleaner vehicle discount will be discontinued. You can pay the charge here.
Pure-EVs have fewer components. They require less maintenance making servicing or any repairs cheaper to that of a petrol or diesel car. Tyres and brake pads have been said to last longer due to the regenerative braking. This is especially ideal if you own a company and choose to run a fleet of EVs. With that said, there are grants for businesses that you can apply for if you are eligible. You can view all the low-emission vehicles eligible for a grant here.
The battery’s lifespan is something that a lot of new buyer’s question. Think about your phone for example, when you buy a new phone, you can charge it quickly and the battery will last all day. But over time that battery doesn’t last as long as it used to and takes longer to charge. This is not the case with the batteries used in EVs. The batteries use a different technology with a unique management system that helps to protect the battery’s life span. Most manufacturers will provide a guarantee of 100,000 miles: for the average driver, that’s roughly 12 years.
Insurance for EVs and Hybrids is similar to vehicles with a combustion engine. Despite EVs being placed in a higher insurance category, the drivers themselves are considered lower risk.
At this current stage we are seeing more and more EVs and hybrids on the road. As a result of this some insurance companies are now providing insurance for EVs and have integrated EVs into their online quotation systems. Prior to this owners would have to go through specialist insurance companies. Some manufacturers even provide insurance packages as an option to customers.
There are some differences that come with EV insurance. When charging your vehicle, it is your responsibility to care for the safety of any member of the public that could trip on a cable or injure themselves. Make sure you have adequate liability insurance cover included in your electric car insurance policy in case anything like this happens. Some manufacturers also include the use of petrol or diesel cars for a set number of days in the year, so be sure to check the policy includes sufficient cover for the short-term load of the car along with your EV. Lastly if you lease your battery on a contract separate from owning the vehicle, it is important to make your insurance company aware of this to prevent problems should a claim be necessary. You can get a quote for insurance on an EV here.
Pure-EVs are zero-rated for Vehicle Excise Duty (VED), removing a three-figure sum from annual car running costs. While PHEVs must pay the same Standard Rate as petrol or diesel drivers, they are eligible for a £10 annual Alternative Fuel Discount.
There was a zero tax on Benefit in Kind (BIK) during 2020. These zero rates also apply to hybrid vehicles with emissions from 1 – 50g/km and a pure electric range of over 130 miles. The government has also announced the tax rate for the next three years, helping businesses to plan ahead. The electric car tax on benefit in kind rate has increased to 1% in 2021/ 2022 and will increase again to 2% in 2022/ 2023.
Businesses operating EVs can also receive a tax break through the system of enhanced capital allowances (ECAs). From April 2021, the 100% Write Down Allowance (WDA) will extend to first year allowances to pure-electric models only.
For example, owning a Peugeot e-208 could save you £490 in VED Road Tax over three years when compared to a petrol Peugeot 208. This is the same case if we compare a Porsche Taycan to a petrol Ford Fiesta, you’re still saving £490 over three years.
Despite EVs having zero-emissions, emissions are still produced during the generation of electricity; the amount generated will depend on the method. For climate change gases (such as CO2), EVs charged using average UK electricity show a significant reduction in emissions. Larger carbon reductions are likely in the future as the UK grid continues to ‘decarbonise’. If renewable or ‘green tariff’ electricity is used, then life cycle greenhouse gas emissions are effectively zero.
For local air pollutants, including nitrogen oxides (NOx) and particulates (PMs), EVs using average electricity are increased. However, as these are emitted from power-stations which are well away from urban areas, their overall impact tends to be much less than when emitted from the exhausts of petrol and diesel cars.
While the evidence is that EVs provide significant climate change benefits and reduce noise pollution, they may increase the potential impact on human health in areas where resources (such as lithium) are extracted for battery production. Indeed, the sourcing of lithium remains contentious relating to the level of reserves and the local impacts on human health where lithium ore is mined.
Workplace Charging Scheme (WCS)
Like the home charger grant, this scheme can cover up to 75% of the cost of buying and installing electric car chargers, up to a maximum of £350 for each socket. This grant is available for up to a maximum of 40 sockets.
Any business, charity or public sector organisation with a Companies House Reference Number can apply for funding for up to 40 chargers if they can declare the need for charging equipment and or intend to encourage EV use amongst their staff or fleet. You must be the owner of the property where the units will be installed or have the landlord’s permission to do so.
Once you’ve applied for your grant online, a voucher will be generated which is valid for four months. Your approved installer will then complete the work on your unit and submit a claim on the WCS portal.