Company Cars: The Great EV Switchover

In fact, we recently surveyed 1,000 people in business and 86% of those with a company car (or fleet) said that this was making the move to EVs a lot more appealing – even if some aren’t yet totally convinced there are savings to be had.

Around a quarter (24%) of those polled said they’d already switched some – if not all – of their fleet to EV or hybrid models already, while 15% have introduced some BEV (full battery) and PHEV (plug in hybrid) models but plan to increase this further.

An additional 15% are in the process of making the switch to an entirely EV or hybrid company car fleet. 

We also found that businesses in Sheffield (21%), Manchester (15%), Liverpool and London (14%) are the most likely to already have an entirely EV / hybrid fleet already, as well as those operating in the finance sector (31%). 

Take up of the Benefits in Kind Scheme is down overall, but up for ULEVs

In the most recent annual figures, there were 8% fewer vehicles provided to employees by employers under the government’s ‘Benefits in Kind’ scheme. 

However, there were 15,000 more ultra-low emission vehicles (classed as 75 g/km or below) provided under the ‘Benefit in Kind’ scheme – which was a 25% year-on-year increase. 

While tax has to be paid by the employee on any vehicle provided under the ‘Benefit in Kind’ scheme, this is just 2% for ultra-low emission vehicles – and the tax rate has been frozen until at least 2025. This in itself can be a tempting tax saving as it can make a significant difference to an individuals’ monthly take-home wages.

However, it is worth keeping in mind that the value of EVs can be higher than petrol or diesel models, so while the tax rate is lower as a percentage the total cost may not work out as less.

We’d recommend reviewing your options and comparing the tax brackets for EV and similar petrol/diesel models, as that can really help you to see the potential savings.

Barriers to switching remain 

While uptake is good, just one in seven (15%) of those we surveyed have (or had) absolutely no concerns about switching their fleet to EV / hybrid models. 

Businesses in Bristol (25%), Manchester and Cardiff (21%) are the most likely to have no concerns about switching their fleet to BEV or PHEV models, and Company Directors are the least likely to be worried about this too (8%). 

However, of those businesses with fleets, the main barriers to switching to EV / hybrid models have been or are: 

• Concern about access to charging points (31%) 
• Concern that insurance costs would be higher than for petrol / diesel models (25%) 
• Concern that leasing costs would be higher for EV / hybrid models (24%) 
• Concern that running costs would be higher for EV / hybrid models (22%) 
• Concern that repair costs would be higher for EV / hybrid models (20%) 

Access to EV charge points is better than many may expect 

Three in ten (31%) may be worried about how easy it is to charge up an EV, but over half (53%) of those we surveyed said that they already have access to one or more charge point at their workplace. 

Employees in Bristol (68%) and London are the most likely to have access to at least one EV charge point at their workplace, while if we look at this on an industry-by-industry view it’s those in recruitment and HR (84%) and transport and logistics (76%) who appear to be most likely to be able to ‘power up’ an EV at their place of work. 

Employees in Glasgow (65%) are least likely to have access to a charging point at work though. 

Introducing new charge points is being encouraged too, and the government’s Workplace Charging Scheme can help with costs – it covers up to 75% of the cost for electric car charge point installation and £350 per socket for up to 40 sockets. 

We calculated that, based on average weekly mileage (115.4), a single standard EV charge point (7-22kWh) could service around 16 employees per week – and that’s assuming they only charge up at work. It’s highly likely that many would power up their EV at their local supermarket or even at home too.  

It’s easy to find a list of public EV charge points in your area using Zap Map. Their database is being regularly updated, and the website also features guidance on the average price to charge up, as well as a useful public charging cost calculator tool.

Leasing EV models doesn’t have to cost more

While the cost of vehicle hire naturally varies a lot depending on the model you choose, there are some very affordable EV and hybrid options out there. 

The Nissan Leaf 40 for example can be leased for around £46 less per month than the similar Ford Focus 1.0 ecoboost, and the Mini Electric Level 2 can be least for around £30 less per month than its petrol equivalent. 

That said, due to the overall cost of ULEVs typically being higher the leasing cost can be more. When comparing popular EVs with petrol and diesel models, we estimate that at this time the average annual leasing cost could be around £679 more when choosing a low-emission options. As always, it’s worth doing your homework and asking the experts. 

Insurance for EVs is also typically only marginally more expensive 

According to the latest Car Insurance Price Index figures from Admiral, EV drivers should currently expect to spend a little extra on their insurance, with the national average price for electric cars coming in at £619 per year, which is 12% more than the average across all car types (£552.67). 

There is good news for EV drivers though, as there was an 11% decrease in the average premiums in April, which implies that this disparity in insurance prices between ULEV and petrol/diesel models will even out over time. 

There are affordable options available for EV drivers too, with the electric Fiat 500 having an average annual premium of £363. This was followed by the Volkswagen ID at £381 and the electric Mini Cooper at £419. 

We’ve compared average insurance costs for a few other popular models to give you an indication of what to expect. 

EVs can often work out cheaper to run

Just 12% of those we surveyed are confident that running an EV would definitely work out as cheaper.  

Businesses in Newcastle (22%) are the most likely to think that running EV / hybrid models wouldn’t work out cheaper, while people in very senior roles (Director and Chief Office Level) are the least likely (6.3% and 4.5%) to be of this mindset. 

While fuel cards can save businesses money ‘at the pumps’ on their petrol and diesel costs, and can also make business admin easier, we’re seeing that further cost savings can be made if businesses are open to switching to EV and hybrid vehicles. 

Rising fuel costs are a concern for many, so it’s worth exploring what options could be best for you and your business, based on the models you want to run and the mileage you use. 

When looking at average annual mileage (6,000) and current fuel and energy prices, we estimate that employees and businesses alike could save as much as £904 on their annual (per vehicle) fuel costs if they swapped a petrol vehicle for a BEV (full battery), while switching from a diesel model could save £775 per year. 

Overall, using a rapid charge point costs around 7.4p per mile at this time, and a slower at home / workplace charger is around 7.6p per mile. 

In contrast, current fuel prices mean that a single mile in an (unleaded) petrol vehicle costs around 20p and it’s around 19p per mile for vehicles run on diesel. 

Other cost-saving considerations with EVs

In addition to potentially lower leasing and running costs – depending on the model you choose, your mileage and how you opt to ‘power up’ – there are other cost-saving considerations to keep in mind with EVs and hybrid cars. 

Many electric cars are exempt from road tax, which could save you an average of £154 per year, according to AutoExpress.

Again, when looking at other specific models the price saving on road tax alone can be even more than you may expect. 

ULEVs are also exempt from the central London congestion charge, which is currently set at £15 per day. 

Our conclusion

Of course, every business is unique and therefore there is no hard and fast rule about if EV or hybrid vehicles could save you money. However, our research indicates that there are cost savings to be made in some specific areas. 

When factoring in BiK tax savings, employees could save over £2,700 per year by leasing and running an EV. 

Even if we remove the Benefits in Kind tax element, there is still a potential saving of over £460 per year to be found. 

If you would like advice on electric vehicle hire, vehicle insurance or even fuel cards and telematics for your fleet, please get in touch with us and we’d be happy to offer our advice on what may be the best route for you. 

Complete our contact form, or give us a call on 03301247644. 

Sources & methodology 

• Survey of 1,000 people in business in May 2022. Data was split by city, industry and job role 
• Data about company cars provided as benefits in kind to employees by employers Benefits in kind statistics: July 2021
• https://www.gov.uk/government/statistics/benefits-in-kind-statistics-july-2021ght on what gets classed as an Ultra Low Emission Vehicle (ULEV) www.vehicle-certification-agency.gov.uk/fuel-consumption-co2/fuel-consumption-guide/zero-and-ultra-low-emission-vehicles-ulevs/
• Company car tax bands by vehicle emission level www.nextgreencar.com/company-car-tax/bik-rates/ www.nextgreencar.com/company-car-tax/bik-rates/ and www.pod-point.com/guides/business/company-electric-car-tax and www.nextgreencar.com/company-car-tax/calculator/
• Road tax by vehicle emission level www.edfenergy.com/electric-cars/tax-road-company and by vehicle from www.nextgreencar.com/car-tax/make-model/
• Information on the workplace charging scheme www.gov.uk/guidance/workplace-charging-scheme-guidance-for-applicants www.gov.uk/guidance/workplace-charging-scheme-guidance-for-applicants  
• Calculations on the cost of fuelling an electric car versus an unleaded or petrol vehicle used data from the following sources, and were based on May 2022 cost averages per kWh and per litre of petrol/diesel, as well as average annual miles per year (6,000) 
• www.pod-point.com/guides/driver/cost-of-charging-electric-car
• www.rac.co.uk/drive/advice/fuel-watch/
• www.nimblefins.co.uk/average-cost-electricity-kwh-uk
• www.confused.com/car-insurance/guides/cost-of-running-electric-car
• www.fleetnews.co.uk/costs/fuel-cost-calculator 
• www.nimblefins.co.uk/cheap-car-insurance/average-mpg 
• www.nimblefins.co.uk/cheap-car-insurance/average-car-mileage-uk
• Calculations on the number of employees per charge point used data from the following sources, and were based on 115 miles per week, 2.3 hours to charge to this point, 36.5 working hours per week and therefore the potential to charge at least 16 employee cars per week: 
• Average actual weekly hours of work for full-time workers (seasonally adjusted) 
• www.nimblefins.co.uk/cheap-car-insurance/average-mpg
• www.carwow.co.uk/blog/how-long-to-charge-an-electric-car
• Average annual road tax (£165) www.autoexpress.co.uk/consumer-news/88361/ved-road-tax-how-does-car-tax-work-and-how-much-will-it-cost
• EVs do not pay the London Congestion Charge (£15 per day) www.rac.co.uk/drive/electric-cars/running/do-electric-cars-pay-the-congestion-charge/
• EV vehicle comparisons to their petrol/diesel equivalent www.lv.com/car-insurance/electric-car-insurance/cost-of-owning-an-ev  
• Average monthly leasing costs using figures on 27/05/2022 www.selectcarleasing.co.uk/
• Most popular electric company car www.autoexpress.co.uk/company-cars/356663/best-electric-company-cars-2022 & www.autoexpress.co.uk/company-cars/356663/best-electric-company-cars-2022