The Benefits of Using Electric Vehicles for Business
Many businesses are starting to use electric vehicles in their fleet for the first time.
There are many compelling reasons why they’ve decided to go down this route, not least of all, for the tax savings.
Here we take a look at some of the main advantages of electric vehicles and why businesses are choosing to switch over to them.
Cost-effective to run
One of the main reasons for switching to electric is the increase in fuel prices. Electric vehicles have considerably lower running costs when you compare them to petrol or diesel cars.
The British Vehicle Rental and Leasing Association did some calculations and found that depending on when and how an electric vehicle is charged, it can cost two to four pence per mile. Compare this to the 10 to 14 pence per mile for an equivalent petrol or diesel vehicle.
For businesses, this represents a huge reduction in transport costs with savings of around 80 to 90% on fuel. If you have vehicles in your fleet that regularly make trips of up to 100 miles per day, you can significantly cut your travel budget.
Inexpensive to maintain
Compared to a conventional petrol or diesel car, there are fewer moving parts in an electric vehicle. This means much less servicing is required. There are also no expensive parts to replace such as starter motors, fuel injection systems, radiators and exhausts.
Of course, you do still need to maintain brakes, suspension and tyres and the rotor. And the battery will need to be replaced at some stage, but manufacturers usually offer an extended warranty on electric vehicle batteries.
Overall, maintenance of electric vehicles is simpler and more economical than for fuel-based counterparts.
Kinder on the environment
The biggest environmental benefit of electric vehicles is the reduction in harmful emissions. Around a quarter of the UK’s carbon emissions come from transport.
Electric vehicles don’t produce any greenhouse gas exhaust emissions, and emissions from plug-in hybrids are much lower than those from a traditional petrol or diesel car.
Electric cars drastically reduce air pollution from tailpipe emissions. They can also reduce overall CO2 emissions. It’s been found that even when powered by the most carbon-intensive electricity in Europe, electric vehicles still emit fewer greenhouse gases than conventional vehicles.
Considerable tax benefits
Because of their low carbon emissions, the government has introduced many tax benefits for electric vehicles. As a result, you can reduce the total cost of ownership, making electric cars more affordable for you and your employees.
These tax benefits include exemptions from:
- Fuel duty
- Vehicle excise duty
- Company car tax
- Van benefit charge
- Fuel benefit charge
Electric vehicles also offer enhanced capital allowances benefits with a 100% first-year allowance. You can claim the entire cost of an electric car or van against taxable profits in the year of purchase.
Further advantageous changes are coming in the 2020/21 tax year. Eleven new bands for ultra-low emission vehicles below 75g/km will be introduced. Five will be linked to the number of miles a car can travel on electric power alone and will include a separate zero emission band. Vehicles emitting 51-54g/km will be taxed at 15% - after which a one percentage point increase applies per 5g/km CO2.
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