Bolstered by the government’s 10-point plan, electric vehicles (EVs) are becoming increasingly popular for both personal and business users. Read more about how electric vehicles are vying for first place in the new greener future.
However, for fleet managers considering switching, it can be difficult to know if now is the right time to make the leap. Leasing can simplify this decision, allowing fleets to try before they buy.
Why should we move to electric vehicles?
As well as tackling climate change and benefitting the health of the community, EVs also come with plenty of financial and commercial bonuses when compared to Internal Combustion Engine (ICE) vehicles. These include:
- Increased energy efficiency
- Lower maintenance costs
- Lower fuel costs
- Exemption from paying driving sub-charges, such as congestion charges
- Government grants, such as the plug-in-grant
- Tax breaks, including the zero percent benefit in kind (BIK) tax
- Meeting the global demand for greener organisations
As the number of EVs on the market grows, they will only become more attractive to consumers and to fleets.
What are the problems with electric vehicles?
There are still some areas for EVs to improve on in order to truly match ICE vehicles. The most common issues are:
- Less range and flexibility, leading to range anxiety
- Lack of charging infrastructure
- Higher price
- Extra considerations when planning a journey, such as thinking where to charge the vehicle
- Longer charging times when compared to conventional refuelling
However, these concerns are becoming obsolete as EV batteries become more efficient and capable of longer ranges. There’s also a growing charging infrastructure being built across the country, with a 36 percent increase from previous years. This is being accompanied by increasing financial support for the installation of charging spots in both private and commercial properties.
Can you lease an electric vehicle?
Leasing rather than buying an EV can provide a host of benefits to fleets, especially with so many leasing companies offering a variety of perks. Some advantages of leasing include:
- Paying for usership of the car rather than the full price
- Being able to update the car model more frequently, so companies can take advantage of innovation
- Inclusion of charging infrastructure within the contract
- Regular maintenance
Companies should focus on the shift to EVs as an investment for the long run, not as a financial burden. As with any major transformation, electrifying a fleet will involve the full commitment of the business and its employees.
The climate crisis is pressing, and more action is required from businesses. Reducing the number of ICE vehicles in fleets is a critical step in going carbon neutral and with the risks of choosing EVs quickly becoming obsolete, making the shift will undoubtedly be a worthwhile investment. Leasing can help facilitate the change, helping companies to assess their needs and adapt to a greener future, on a flexible basis.
Super-deduction tax break
In his spring Budget on 3 March 2021, the Chancellor announced the super-deduction that can be off set against tax liabilities.
From 1 April 2021 until 31 March 2023, businesses investing in qualifying new plant and machinery assets will be able to claim:
- a 130% super-deduction capital allowance on qualifying plant and machinery investments
- a 50% first-year allowance for qualifying special rate assets
The super-deduction, together with various funding instruments, may provide further impetus to the rate of change.
If you’re considering making the switch to electric vehicles then we can support you throughout the entire process - from setting up the agreements, right through to recovering funds, if necessary. For further details or advice please contact Eddie Flanagan or Mark Bartholomew in our energy team.
If you would like to read more of our energy blogs and guides sign up to our mailing list to join our quarterly energy mailer.
Our energy team is ranked as a Leading Firm in the Legal 500 2021 edition.
From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.