How SMEs can benefit from switching to EVs
What are the overall benefits of making the switch to electric cars for SMEs and fleet managers? Where are the savings to be made, and, just as importantly, how easy is it to switch? Poppy Welch, head of the Go Ultra Low campaign, investigates
With lower running costs, reduced maintenance and a choice of more than 45 models, a switch to zero emission electric cars and vans should be an easy decision for any SME.
In fact, according to research published by Go Ultra Low in January 2018, almost 435,000 SMEs could save up to £1,440 a year by switching to their first electric car. If companies use whole life costs to assess their fleet purchases there is a massive £625m of potential savings on offer to UK businesses with the transition to electric. Despite this fact, two thirds of SME owners fail to consider the long-term savings of an electric car, focusing more on the initial cost.
Making the switch to electric also poses benefits beyond just saving money for SME owners and fleet managers. So, what are the overall benefits of making the switch to electric cars for SMEs and fleet managers? Where are the savings to be made, and, just as importantly, how easy is it to switch?
Making the most of the support
For many small businesses, the switch to electric can seem daunting, but the evidence has shown that there are significant savings available and support to help the process. To help drive uptake of both 100 per cent electric and plug-in hybrid cars vehicles, the government offer a number of grants which can help offset the initial cost. The Plug-in Car Grant provides a saving of £4,500 off the price of an eligible new 100 per cent electric car, £2,500 off an eligible plug-in hybrid car, while the Plug-in Van Grant offers up to £8,000 off the price of an eligible new electric van.
When it comes to charging, there are grants for that too. The Workplace Charging Scheme (WCS) provides eligible businesses up to £300 towards the purchase and installation cost of each charging connection, up to a limit of 20, meaning employees can make the most of charging while at work. For those that use company cars, the Electric Vehicle Homecharge Scheme (EVHS) gives up to £500 toward the cost of installing a dedicated home chargepoint.
Miles of savings
Once you have your electric fleet in place, the significantly lower running costs will quickly begin to pay dividends. Powering an electric vehicle can be up to 90 per cent less expensive than for conventional internal combustion engine cars – pure electric cars can be driven from as little as 2p per mile, compared to 10-12p for their petrol or diesel counterparts. Meanwhile, electric cars are made of far fewer moving mechanical parts, meaning they have lower service, maintenance and repair (SMR) costs – as much as 70 per cent less than petrol or diesel-powered alternatives.
These day-to-day savings and increased reliability mean they require far less time off the road. This means that an electric fleet will save your business not only valuable cash, but priceless hours too.
Calculating the benefit
There is a long list of tax benefits and incentives that that are available to both drivers and businesses. This includes exemption from London’s Congestion and T-Charges, lower benefit-in-kind (BIK) tax rates for company cars, Vehicle Excise Duty (VED) on 100 per cent electric cars under £40,000, as well as capital allowances and salary sacrifice regimes.
When we think about applying all of these savings across a business fleet, the benefits soon multiply. According to research conducted by Lex Autolease in 2017 a business with a fleet of just 10 cars can save an impressive £14,000 each year by making the switch to either pure electric or plug-in hybrids.
Although calculating this may seem a daunting task, especially when considering a whole fleet of vehicles, help is at hand. Go Ultra Low’s car tax calculator allows you to compare the overall tax benefit of switching to a pure electric or plug-in hybrid vehicle, while the journey cost savings calculator provides an estimate on savings on travel. Completing these calculators is simple and easy to do, and can provide SME owners and fleet managers with a stronger understanding of exactly how the savings may apply to them.
Improving local air quality
While the bottom line will always be an important factor for fleet owners, there are many other reasons why they should choose electric. With 100 per cent electric cars having zero tailpipe emissions and plug-in hybrids releasing emissions at a considerably lower rate than their petrol or diesel alternatives, they can make a significant contribution to improving local air quality across our towns and cities.
On a broader level, even when we factor in the emissions associated with electricity generation, electric cars still produce substantially lower greenhouse gases. This comparison will only swing further in favour of electric vehicles in the years to come, as the UK continues to increase the proportion of renewable electricity generation across the network. This means that by adding electric cars and vans to their fleets, SMEs have a great opportunity to make a significant contribution to the UKs greenhouse emission goals, while also meeting their own sustainability objectives.
Confidence for fleets
It is often the perception of potential new car buyers that opting for a car that helps the environment will mean sacrificing either choice or convenience, but this couldn’t be further from the truth. There are now more than 45 models available in the UK – meaning there is a model for every motorist.
And when it comes to charging your electric car, research from ChargeMaster has found that around 60 per cent of EV charging takes place at home, meaning that the majority of charging does not take place at public chargepoints. For those times when drivers do need to charge on the go, there are over 16,500 public chargepoint connectors in the UK, while 96 per cent of motorway service stations now have rapid chargepoints, which can charge cars to 80 per cent power in as little as 30 minutes. And with investment in charging infrastructure continuing apace, access to public chargepoints and charge times are improving all the time.
Join the revolution
To help more businesses realise the benefits of adding electric cars and vans to their fleets, in 2016, we formed the Go Ultra Low Companies initiative. Once a company officially obtains this status, they are provided with a toolkit to help them communicate their green credentials with the wider world, while also having the chance to be referenced as part of the Go Ultra Low campaign in trade media. There are now more than 140 Go Ultra Low Companies of all sizes – from household names like Microsoft and Britvic, to smaller businesses such as Eco Friendly Taxis and Battersea Property Maintenance. The process of becoming a Go Ultra Low Company is easy, just fill out the online form to kick off the application.
Getting it right
Making the switch to electric can deliver significant savings for SMEs, although financials are not the only benefit. SMEs have the opportunity to make a substantial contribution to UK emission targets and their own sustainability goals, as the evidence shows 700,000 UK motorists would make the switch to electric if given the chance by their employers. With all the latest information on grants and tax incentives, options for booking an electric test drive as well as tools to help you figure out how much your business can save, visit www.GoUltraLow.com/fleet to take your company’s first step to an electric fleet.