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How an EV business fleet brings huge benefits to businesses

2023 has been a record-breaking year for new electric vehicles (EVs) joining UK roads, but it’s business fleets – rather than private drivers – that have been driving the change, as increasing numbers of companies commit to improving their sustainability credentials.

2023 has been a record-breaking year for new electric vehicles (EVs) joining UK roads, but it’s business fleets – rather than private drivers – that have been driving the change, as increasing numbers of companies commit to improving their sustainability credentials.

These environmental concerns, along with the approaching 2035 ban on the sale of new petrol and diesel cars, are both key factors in the records we’re seeing and a glimpse into the future – according to Lex Autolease’s new Future of Transport report, 100% of fleet managers believe that their fleet will ultimately be entirely electric.

Underpinned by the Government’s current fiscal benefits to encourage EV adoption, the increasing choice of new EV models coming to the market, and the improvements in range, technology and the UK’s charging infrastructure network, it’s unsurprising that enquiries for electric company car and salary sacrifice schemes are at an all-time high.

But the benefits go beyond improving a business’s environmental position.

For employees, company car schemes – either traditional or via an employee benefit salary sacrifice schemes – can provide a tangible and relevant benefit. The whole package, including maintenance, breakdown and insurance is taken care of, removing the fear of unexpected costs or the need to gather a deposit. This can help to improve financial and mental wellbeing by simplifying things in the event of an incident and leaving one less thing to worry about.

For EVs specifically, Benefit in Kind (BiK) rates are fixed at 2% until April 2025, making them a cost-efficient option and an attractive option for the 60% of drivers who say that the cost of EVs are what’s preventing them from buying one.

Being able to provide a larger pool of the workforce with access to electric vehicles is something that can help businesses set themselves apart in a competitive recruitment marketplace. Many are already doing this; the Future of Transport report reveals that 75% of fleet managers think electrification is important for employee engagement and recruitment.

The provision of a car benefit has changed over time and will continue to do so – what may seem attractive to one employee in the form of an all-inclusive company provided car may not be so to someone else who wants the freedom to make their own choice.

But the company car is an important part of aiding the UK’s transition to net zero by 2035, when every new car must be zero emission capable. This is why, despite some barriers to electric vehicle adoption such as no ability to charge at home (reliance on public network) and the upfront cost of the vehicle, 67% of fleet managers surveyed expect to grow the number of electric vehicles in their fleet in the year ahead.

However, the key to the success of the electric company car and employee adoption will be the fiscal benefits provided via the tax system. Indeed, 100% of fleet managers and 65% of drivers think government departments and policymakers should be doing more to encourage electric vehicle adoption among drivers.

Until we see cost parity between an EV and traditional petrol or diesel vehicle, then the business world will continue to play an important role in encouraging take up and helping to accelerate the road to net zero – with the added benefit of keeping their employees happy, too.

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