Electric Vehicles – the benefits, both business and personal.

The popularity of electric vehicles (EVs) in the UK has been growing rapidly. This surge is driven by technological advances, environmental concerns, and a shift in consumer preferences.

The Local Government Association predicts that, by 2030, there will be between 8 million and 11 million hybrid or electric cars in the UK. By 2040, the number of hybrid or electric cars could reach 25.5 million.

Government support and restrictions

The UK government is encouraging the adoption of cleaner transportation by offering incentives for EVs. They’re also applying future restrictions on the future manufacture of traditional petrol and diesel vehicles – although recent months have seen governments rowing back on some of these.

Let’s explore a little more closely the financial benefits of EVs for both personal and business use. From cost savings on fuel to tax incentives and potential reductions in road tax, EVs offer a range of financial perks.

 
Personal benefits of EVs

1.    Reduced running costs
One major advantage of electric vehicles (EVs) is the significant cost savings on fuel. Unlike petrol or diesel cars, EVs run on electricity, which is generally much cheaper per mile driven, resulting in lower running costs.

2.    Government incentives
As an individual, you can apply for financial support when purchasing your EV. Examples include reduced road tax (VED) and subsidies for home charging installations.

3.    Lower maintenance costs
The mechanical design of EVs is simpler than that of traditional cars, with fewer moving parts. This often leads to dramatically lower maintenance costs, reducing the likelihood of mechanical failures and expensive repairs.

4.    Environmental impact
Driving an EV contributes to a greener environment by producing lower emissions compared to traditional vehicles. This positive environmental impact aligns with the growing focus on sustainability, making EVs an attractive choice for eco-conscious individuals.

5.     Enhanced driving experience
Beyond the financial and environmental benefits, EVs offer a superior driving experience. Their quiet operation creates a peaceful ride. Their faster acceleration adds to the smooth driving feel, making EVs enjoyable to drive in addition to their practical advantages.

Business benefits of EV ownership 

1.    Tax advantages
EV ownership offers several tax benefits for businesses. Examples include –

• 100% first-year capital allowances
  Businesses can claim 100% of the cost of an electric company car in the first year, reducing taxable profits.

• Lower Benefit-in-Kind (BIK) tax rates
  Employees who use EVs as company cars benefit from lower BIK tax rates, making EVs more attractive as fleet vehicles.

• Congestion charge exemptions
  In some areas, businesses with EVs can benefit from exemptions or reductions on congestion charges, offering further savings.

2.    Enhanced corporate social responsibility (CSR)
Adopting EVs can demonstrate a company's commitment to environmental sustainability, bolstering its CSR profile. This commitment can attract eco-conscious clients and investors, enhancing the company's reputation and potentially opening new business opportunities.

3.    Reduced fleet running costs
For businesses with electric fleets, significant cost savings can be achieved –

• Fuel savings
  EVs reduce operational costs by running on electricity, which is generally cheaper than traditional fuels.

• Lower maintenance costs
  The simpler design of EVs leads to fewer mechanical issues, further reducing maintenance expenses.

4.     Corporate image
Using EVs will enhance your company’s green credentials and public image. This shift towards sustainable practices can resonate positively with customers and the wider community, strengthening the company's brand identity.

5.    Government grants and support
Businesses transitioning to electric fleets can also benefit from government grants and support, easing the financial burden of adopting EVs. These incentives help businesses make the switch to EVs more affordable, reinforcing their environmental commitments.

Potential drawbacks of switching to EVs

Is the story of EV ownership one of unmitigated benefits? Not exactly. Let’s look at some of the potential drawbacks.

1.    Initial investment
One notable drawback of switching to electric vehicles (EVs) is the higher initial cost. EVs generally have a steeper price tag compared to traditional petrol or diesel vehicles. This can prove to be a significant barrier, particularly for individuals and smaller businesses.

2.    Charging infrastructure
Another challenge lies in the availability of charging infrastructure. While charging stations are increasing in number, coverage can still be inconsistent, especially in rural areas. This can make long journeys difficult and lead to concerns about range anxiety.

3.    Range limitations
This issue is related to charging point availability. Most EV models offer a limited driving range compared to traditional vehicles. This can make them less suitable for long-distance travel or extensive daily commutes. This limitation may also contribute to range anxiety.

4.    Limited model options
The variety of EV models currently available can also pose a challenge. While the range is expanding, it still lacks the breadth found in the traditional vehicle market, potentially limiting choices for consumers and businesses seeking specific features or styles.

5.    Charging time
Charging an EV can take significantly longer than refuelling a traditional vehicle, ranging from half an hour to several hours, depending on the charging station type and the vehicle's battery. This extended charging time can inconvenience drivers and fleet operators alike.

Switching to EVs – benefits all round

It’s true - there are potential drawbacks to purchasing EVs. These disadvantages may, in a few years, disappear altogether as technology develops. However, they shrink to insignificance when compared to the many benefits of EV ownership. These include cost savings on fuel, government incentives, tax advantages, and reduced maintenance costs. EVs also contribute massively to a greener environment, enhancing both individual lifestyles and corporate social responsibility profiles.

For tailored advice on the financial implications of transitioning to EVs, we encourage you to get in touch. We’re ready to talk you through the process, ensuring you make informed decisions for both personal and business use.

Get in touch today. We're ready to help.