Need to know:
- Electric vehicles are now a realistic option for company fleets, either as an employee benefit or through salary sacrifice arrangements.
- Favourable benefit-in-kind rates are making this more attractive compared to petrol or diesel options.
- But some concerns remain around charging infrastructure and battery life.
With more focus than ever on the need to reduce carbon emissions, employers are likely to find themselves under pressure to consider introducing electric vehicle (EV) company car schemes over the coming months and years. Here are some top tips on how to go about it.
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Jake Collis, senior partnerships manager at Octopus Electric Vehicles, says a good place to start is by surveying employees to see if they would be interested in taking out an electric vehicle, particularly through a salary sacrifice arrangement. “When employers go out to their employee base and ask if they would be interested in a brand new electric vehicle with no money upfront and saving money through salary sacrifice, they typically find that 10 or 15 employees out of every 100 are super-keen,” he says.
Recent changes to company benefit-in-kind tax rates for zero-emission vehicles – currently just 1% for 2021-22 and set to rise to 2% for the following three years – are also helping to make electric vehicles a popular choice, he adds.
Engage key stakeholders across all areas of the business
It’s vital to involve people from the various parts of the business early on, says David Bushnell, principal consultant at Alphabet (GB). “This should include HR, procurement, finance, corporate and social responsibility (CSR) and operations,” he says. “Everyone in the business needs to buy into the change and be part of the journey to electrification, otherwise they will simply see a more expensive electrified vehicle at face value and not understand the tax savings and benefits that come with it.”
Assess the local EV infrastructure
Before making any firm decision, it’s a good idea to understand both the local EV charging infrastructure and the likely requirements of employees. “EV infrastructure is, unfortunately, lagging behind with some regions having public charging points hundreds of miles away from each other, making travelling long distances harder for electric vehicle drivers,” points out Paul Brown, managing director of Cars On Demand. “Employers also need to consider the average mileage per week, average charging time as well as employees’ travel needs.”
Consider applying for a workplace charging scheme
One possible solution to any lack of nearby charging stations is to invest in a workplace charging scheme. This is a voucher-based scheme designed to provide eligible applicants with support towards the upfront costs of the purchase and installation of EV charge-points, says Mark Gallagher, business development manager at Fleet Operations. “This can provide a practical solution to battery range anxiety, as employees can charge on-site during working hours,” he says.
The contribution is limited to 75% of purchase and installation costs, and recent changes have seen the number of sockets an employer can claim for increase from 20 to 40, and an extension of voucher validity from 120 to 180 days.
Consider plug-in hybrids as a stepping stone
For those who think it may be too much of a leap to go straight to EVs, plug-in hybrids (PHEVs) could be a good middle ground, says Bushnell. “It may be tricky for businesses to shift all fleet operations to fully electric vehicles in one go,” he says. “PHEVs remain an important part of the e-mobility journey, particularly as charging infrastructure continues to improve across the UK. They also offer a good way to introduce drivers to low-emission vehicles and ease concerns about going electric.”