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It's time to switch to electric

Electric vehicles can save your business money.

Electric cars and vans are cheaper to run than petrol or diesel vehicles. They benefit from tax breaks, low fuel costs and are offered with sizeable Government grants. In fact, businesses that already operate electric vehicles are saving £1,250 a year per vehicle.

Fleet best practice dictates that vehicle operating choice decisions should be based on whole life costs because they provide the best forward estimate of the real costs to an organisation, in delivering business mileage, over a replacement cycle.

Whole life cost figures from Lex Autolease illustrate how the higher P11D value of plug-in vehicles is more than offset by significant fuel savings, notwithstanding recent falls in the pump price of petrol and diesel, an estimated 20-40% reduction in SMR costs and tax benefits.

  • Service, maintenance and repair

    Service, maintenance and repair (SMR) costs

    Service, maintenance and repair (SMR) costs for plug-in vehicles would appear to deliver major savings when compared to internal combustion engine models, according to initial findings from expert providers.

    The current volume of pure electric plug-in vehicles in the marketplace means that definitive SMR figures based on a reliably large sample of models of significance are not yet available. Nevertheless, the ‘simplicity’ of the technology in those vehicles dictates financial savings versus internal combustion engines.

    Furthermore, a recent study by Go Ultra Low found that UK motorists could save an average £306 a year in garage bills by switching to a new electric car. Every year, the average motorist forks out £400 for servicing and maintenance for their petrol or diesel car – more than four times the sub-£100 annual spend for an electric model.

    With just three main components – the on-board charger, inverter and motor – Nissan says the LEAF is 40% cheaper to maintain compared to petrol or diesel-powered alternatives.

  • Fuel Costs

    Fuel the second biggest vehicle-related cost

    Fuel is is typically the second biggest vehicle-related cost. After vehicle acquisition/depreciation potentially accounting for 25%-30% of fleet expenditure. Therefore, with corporate budgets under the microscope, reducing the cost of running business vehicles makes absolute financial sense.

    Fuel savings are one of the many benefits of running electric vehicles (EVs), with the Go Ultra Low campaign suggesting that costs for a pure electric vehicle can be up to 90% less than for a conventional vehicle. Employees paying for fuel used privately could also make significant financial savings.

    That’s why it is important that fleets use whole life cost figures as the basis for their company car decision-making as they include fuel costs as well as all other operating costs.

    The Department for Transport calculates that EV running costs are as low as just 2p a mile and the Energy Saving Trust suggests such vehicles cost around £2-£3 to fully charge, for a typical range of 100 miles.

    Following recent reductions in the pump prices of petrol and diesel, the Energy Saving Trust suggests that an equivalent petrol or diesel car costs £9-£13 to drive 100 miles – more than 400% more on a mile for mile basis – thus EVs deliver major fuel cost savings.

    However, pump prices are notoriously volatile and despite reductions in 2015 and into 2016, the long term indication is a potential return to higher petrol and diesel fuel costs as crude oil prices increase alongside global energy demand, according to experts.

    Just last year, the Energy Saving Trust calculated it cost £12-£18 to drive 100 miles in a petrol or diesel car and research published by Go Ultra Low suggested that collectively British motorists were missing out on savings of almost £24.5 billion annually by not taking advantage of ultra low emission motoring.

    While those collective savings have diminished due to the reduction in pump prices, calculations reveal that individually fleets and drivers can continue to save hundreds of pounds per vehicle per year by adopting electric motoring.

    With the average annual mileage of a household car being 7,900 miles in 2014, according to latest data from the Department for Transport’s Annual Travel Survey, the difference in annual spend between the cost of a petrol or diesel car, around 9p per mile (£700), and an EV, 2p per mile (£150), is a massive £550. Multiplied by the 29.6 million cars on the nation’s roads, according to latest department vehicle licensing statistics, and the saving is a colossal £16.2 billion.

    The data reveals that the Renault ZOE supermini delivers a potential saving of more than £470 versus a petrol engine supermini over 12 months/10,000 miles. Multiply that across an electric car fleet replacement cycle of four years/40,000 and the fuel saving rockets to almost £1,900 on just one vehicle.

    Similarly, comparing the fuel economy of the new Toyota Prius Plug-in with conventionally powered petrol and diesel models and there are significant savings: more than £450 versus the petrol rival and almost £240 versus the diesel. Multiply that across a typical fleet operating cycle of four years/80,000 miles and it translates into savings of more than £3,650 and almost £1,900 respectively per vehicle.

    Therefore, as experts highlight and the figures prove, a higher on-the-road price for a plug-in vehicle can be more than offset by fuel savings.

    The table below highlights potential fuel costs over 10,000 miles

    Model MPG Fuel Price Fuel Cost
    Renault ZOE N/A 2p per mile £200.00>
    Peugeot 1.0 Access 3dr 68.9 101.8 £671.98
    Toyota Prius Plug-in Hybrid 94.1 101.8 £492.02
    Ford Mondeo 2.0T EcoBoost 160 48.7 101.8 £950.07
    Vauxhall Insignia 5dr 2.0 CDTi 170PS ecoFLEX 62.8 100.84 £729.29
    • UK average fuel prices: petrol 101.80p a litre and diesel 100.84 a litre. MPG: combined fuel cycle.
  • Tax Savings

    The motoring tax system is designed to favour the take-up of electric vehicles (EVs) with Government grants furthering the incentives for corporate customers.

    Additional funding is available to help with the purchase of vehicles and installation of recharging points, meaning there is a solid business case for introducing such cars and vans to fleet operations.

    The London Congestion Charge and the Low Emission Zone ringing the capital also favour the cleanest vehicles, while many local authorities offer free parking for plug-in cars and vans – with more initiatives set to follow.

    Add fuel costs into the financial equation, where along with company car benefit-in-kind (BIK) tax the biggest savings are achievable, and switching to EVs starts to make real sense.

    Savings in company car BIK tax and Class 1A National Insurance

    The Government has confirmed, following a review, that company car benefit-in-kind (BIK) tax will continue to be based on vehicle CO2 emissions from 2020/21.

    BIK tax rates are known until the end of 2019/20 – which enables businesses to plan their vehicle choice lists and calculate the financial cost to themselves and employees.

    But prior to announcing rates for future years, the Government is to consult on reform of the bands for EVs (below 75g/km) to refocus fleet demand on the cleanest cars. That suggests that rather than a single rate of tax for cars with emissions of 0-50g/km and for those with emissions of 51-75g/km there could be a series of more graduated thresholds.

    Like BIK tax, employers’ Class 1A national insurance contributions (NIC), charged at the rate of 13.8%, are linked to a car’s P11D value and CO2 emission figure. Therefore, the lower a car’s CO2 emissions the lower the NIC charge.

    Table 1 (below) highlights BIK tax rates on EVs to 2019/20 and the rates for a car in the 100-104g/km bracket.

    • For each tax year add 3% for diesel cars up to a maximum of 37%

    So, comparing a zero emission BMW i3 (£30,980 on the road) with an almost identically priced 104 g/km Volvo V60 D4 SE Nav (£31,045), reveals the tax benefits for lower (20%) and higher (40%) rate drivers (see table 2) and the Class 1A NIC savings for employers (see table 3) over four years.

    Over the four-years to 2019/20, company car drivers will pay a total of £2,981 less in BIK tax on the BMW i3 if a lower rate taxpayer and £5,963 if a higher rate taxpayer.

    Employers over the four-year period businesses will save themselves a total of £2,056 in Class 1A NIC by choosing the BMW i3. On a fleet of just 10 models that equates to a saving of more than £20,000.

    Van BIK tax charge

    The Government wants to increase fleet demand for zero-emission vans so has extended BIK support for models.

    Full BIK tax exemption status of electric vans ended in 2015/16 with 20% of the rate paid by conventionally-fuelled vans being levied. But Budget 2016 confirmed that the 20% rate will be retained for a further two years – 2016/17 and 2017/18 – instead of rising to 40% and 60% of the main rate in those years

    It means that based on the main rate BIK charge in 2016/17 of £3,170 the charge for an electric van will be £634, with an inflation-linked increase due in 2017/18. Employers pay NIC on the taxable benefit.

    • Electric van BIK tax charge 2016/17 (20%/40%) taxpayer: £127/£254. NIC charge: £88.
    • Petrol/diesel van BIK tax charge 2016/17 (20%/40%) taxpayer: £634/£1,268. NIC charge: £437.

    Therefore, drivers will save £507/£1,014 in tax on a plug-in van. Employers will save £349 in NIC per plug-in vehicle, which on a fleet of just 10 vans delivers a cash saving of almost £3,500.

    Tax rates for zero-emission vans will then increase on a tapered basis to 5th April, 2022: 40% in 2018/19, 60% in 2019/20, 80% in 2020/21, 90% in 2021/22 and then equalising with the standard charge in 2022/23 – a two-year extension from the original timetable.

    The Government says it will review the impact of the incentive at Budget 2018 together with enhanced capital allowances for zero-emission vans.

    Vehicle Excise Duty

    Presently EVs are exempt from paying Vehicle Excise Duty (VED) and all cars and vans that emit less than 100g/km of CO2 are zero rated for road tax, delivering additional cash savings to companies.

    However, the VED regime for cars will change from 1st April, 2017. Nevertheless, the changes still encourage take-up of EVs.

    In announcing the change, Chancellor of the Exchequer George Osborne said: “The reformed VED system retains and strengthens the CO2-based first year rates to incentivise uptake of the very cleanest cars.”

    The first year VED rate and the standard rate for EVs is shown below:

    New VED system for cars registered from 2017

    Emissions (g/km) of CO2 First year rate Standard rate*
    0 £0 £0
    1-50 £10 £140
    51-75 £25 £140
    76-90 £100 £140

    *Cars above £40,000 pay a £310 supplement for five years

    Capital allowances

    Capital allowances allow companies to write down the cost of purchasing cars and vans against taxable profits.

    For capital allowance purposes the actual price paid for the car, including blocked VAT and any discount, is used when calculating the allowance; as such list price has no relevance for capital allowance purposes unless that was the price paid for the car.

    To encourage the take-up of EVs, cars and vans with CO2 emissions of 75g/km or less are eligible for 100% first year capital allowances to 31st March, 2018 thereby giving companies cash flow benefits. However, in respect to zero-emission vans, this benefit is limited to businesses that do not claim the government’s Plug-in Van Grant.

    In contrast, on cars with emissions of 76-130g/km and above 130g/km companies can write down 18% and 8%, respectively, of the cost of a car against their taxable profits each year, on a reducing balance basis. Business expenditure on vans (ex-VAT) that are not zero-emission qualify for tax relief as capital allowances at the rate of 18% a year on a reducing balance basis.

    However, once again with the focus firmly on encouraging corporate demand for EVs, Budget 2016 announced that the 100% First Year Allowance would be extended for a further three years to April 2021. However, the CO2 emissions threshold for qualifying cars will reduce to 50g/km from 75g/km.

    In giving fleets a two-year window to realign their company car policies, the Government also announced that from April 2018, to reflect falling vehicle emissions, the 18% capital allowance would apply to cars with CO2 emissions of 51-110g/km with vehicles above 110g/km being in the 8% category.

    The Government will further review the case for the First year Allowance and the appropriate business cars emission thresholds from 2021 at Budget 2019.

    Table 1

    CO2 (g/km) 2016/17% of P11D price 2017/18% of P11D price 2018/19% of P11D price 2019/20% of P11D price
    0-50 7 9 13 16
    51-75 11 13 16 19
    100-104 17 19 21 24

    Table 2

    P11D value 2016/1720%/40% 2017/1820%/40% 2018/1920%/40% 2019/2020%/40%
    i3 £30,925 £433/£866 £557/£1,113 £804/£1,608 £990/£1979
    V60 D4 £30,990 £1,240/£2,480 £1,364/£2,727 £1,488/£2,975 £1,673/£3,347
    Saving £807/£1,614 £807/£1,614 £684/£1,367 £683/£1,368

    Table 3

    P11D value 2016/17 2017/18 2018/19 2019/20
    i3 £30,925 299£ 384£ 555£ 683£
    V60 D4 £30,990 £855 £941 £1,026 £1,155
    Saving £556 £557 £471 £472

    Example of capital allowance benefits


    Model: Nissan LEAF Acenta 30kw

    Price: £24,990

    CO2 emissions: 0g/km

    Writing down allowance: 100%

    Corporation tax 2016/17: 20%

    Tax relief: £24,990 x 100% x 20% = £4,498

    Tax written down value carried forward = nil

    Model: Vauxhall Insignia 2.0 CDTi 170PS Start/Stop ecoFLEX 5dr

    Price: £25,004

    CO2 emissions: 118g/km

    Writing down allowance: 18%

    Corporation tax 2016/17: 20%

    Tax relief: £25,004 x 18% x 20% = £900.14

    Tax written down value carried forward = £20,503.28

  • Long Term Savings

    Whole life costs reflect all the projected, vehicle-specific costs associated with operating a car or van over its fleet life irrespective of whether a vehicle is owned or leased.

    Yet many fleet decision-makers base their vehicle selection decisions on list price, P11D value or a headline monthly lease rate rather than whole life costs.

    Finding the right operation for the right vehicle is key in all fleet operations and that is no different with EVs.

    Whole life cost figures from Lex Autolease illustrate how the higher P11D value of plug-in vehicles is more than offset by significant fuel savings, notwithstanding recent falls in the pump price of petrol and diesel, an estimated 20-40% reduction in SMR costs and tax benefits.

    SMR savings accrue because there are fewer moving or wearing parts in an electric car that will require maintenance than in petrol or diesel equivalents. Consequently, vehicle servicing costs will be lower.

    The data reveals that, for example, running a BMW i3 over four years/60,000 miles will deliver a potential saving of £51 a month over rival models (see table) or £2,448 over a four-year operating cycle. Multiply that by a fleet of just 10 cars and the savings escalate to almost £25,000 over four years.

    Similarly with the Nissan LEAF Acenta the monthly savings over a Ford Focus 1.5 EcoBoost Zetec S are an impressive £77 a month. That equates to almost £3,700 over a four-year operating cycle and almost £37,000 on a fleet of only 10 cars.

    Whole life cost data for range extender and plug-in hybrid models are more difficult to calculate because maximum savings are delivered in electric mode.

    However, the greater the number of miles covered in electric mode the greater the whole life cost saving as fuel expenditure will reduce. What’s more, in the figures below the BMW i3 Range Extender and Volkswagen Golf GTE are compared with best in breed petrol and diesel rivals so for fleets currently operating less efficient vehicles the savings would be even more significant.

Government Grants

The Government offers up to £4,500 off the price of a new electric car, and up to £8,000 off the price of a new electric van. The official names for these grants are the Plug-in Car Grant and the Plug-in Van Grant.

The Plug-In Car Grant gives you 35% off the showroom price of an eligible car, up to £4,500. Eligible cars are split into three categories.

You can also access a Plug-in Van Grant if you need a van. The grant will give you 20% off up to £8,000 of the price of a van. Again, applied as you buy.

Local authority grants

If your organisation is based in the West of England, you may be able to benefit from match-funding to install electric vehicle charging points at your site. Funding is available for fast and rapid charge points.

To find out more details about this funding, contact your local Business Engagement officer using the contact details at www.travelwest.info/businesses

Available Fleet Vehicles

Outlander EVFind out which vehicle is right for your business and book at test drive at the Go Ultra Low national website.

Need more information? Go Ultra Low created this handy Fleet Guide to Plug-In Vehicles (pdf).

Go Ultra Low Companies

Go Ultra Low CompanyThe Go Ultra Low Companies initiative is an opportunity to promote your fleet’s green credentials and receive official ‘Go Ultra Low Company’ status.

The Go Ultra Low Companies initiative acknowledges and rewards companies that have taken the industry lead and included significant numbers of electric vehicles on their fleets, with a commitment to add more before 2020.

As a Go Ultra Low Company, your company will receive:

  • Official Go Ultra Low Company status – including a logo for marketing use
  • Go Ultra Low Company toolkit – including guidance on how to communicate your green credentials to the wider world
  • Publicity – the chance to be included in future news announcements and case studies from the Go Ultra Low campaign
  • Invitation to the Go Ultra Low Fleet Summit (to be held in Autumn 2016 with a senior government speaker)

To see the list of the Go Ultra Low Companies, or to find out how to become a Go Ultra Low Company, visit the Go Ultra Low national website.

Charge Points

Thanks to an ever-expanding network, you can now charge your electric vehicle at over 11,000 chargepoints and at over 96% of motorway services in England and Wales.

The chargepoints at motorway services are rapid chargers, meaning you can charge your car in under 30 minutes. All this means you can comfortably drive the length and breadth of Britain in your electric vehicle.

Charge Points in the West of England

Visit our charge points page to find your nearest charge point.

Charging at home

Company car drivers can get a chargepoint installed at their own home. Powering your car from home is amazingly simple and extremely cost effective, especially as the Government will currently pay 75% towards the equipment and installation. You’ll never need to visit a petrol station again. Visit our Frequently Asked Questions to learn more.

Charging at work

The thought of installing a petrol station at the workplace sounds crazy, but putting in chargepoints is surprisingly easy. Learn more below.

Frequently Asked Questions

Charge Points

  • Types of charge points and charging times
    There are three types of charger – rapid, fast and standard. Below you can find a quick summary of the best applications for each type of charger:
    • Rapid – charges to 80% in 30 minutes. Perfect if you’re in a rush, or on a motorway journey. (50 kW for DC units (400V /125A) or 43 kW for AC chargers.)
    • Fast – charges your car in about 4 hours. Perfect while you’re at work, at a Park & Ride, doing the weekly shop, or going to a restaurant or cinema. (7 kW AC charger (32A))
    • Standard – charges your car in about 6 hours. Perfect for charging overnight at home. (3kw AC charger (13A))
  • How do I get a charge point for my business?
    The Government offers grants to provide support towards the up-front costs of the purchase and installation of electric vehicle charge-points, for eligible businesses, charities and public sector organisations. Workplaces can apply for vouchers and get more information on the Gov.uk website.


  • What is the average range of an Electric Vehicle?
    • Plug-in hybrids, which also have a combustion engine, have ranges up to 800 miles, with around 30 miles of electric range.
    • Pure electric cars typically have a range of around 100 miles.
    • Range extender electric cars, which have a small petrol engine that tops up the battery when it is getting low, have a range of around 200 miles.
  • Do batteries deteriorate significantly over time?

    Electric vehicle sceptics have also warned of the potential of electric vehicle battery degradation, but such suggestions would appear to be ill-founded.

    Nissan, last year, published proprietary data going back five years and relating to the European sale of more than 35,000 LEAF models.

    It showed that 99.99% of battery units remained entirely fit for purpose. The failure rate of the battery power unit – less than 0.01% or just three units in total was, Nissan said, a fraction of the equivalent industry-wide figure for defects affecting traditional combustion engines.

    Analysis of a basket of 50,000 cars aged three to six-years-old over a five-year period by independent insurance specialist Warranty Direct indicated that 0.255% of vehicles on its books had experienced an issue that led to an immobilisation of the internal combustion. Common problems ranged from leaks in the coolant system and damage to the head gasket to engine flooding.

    Nissan says that the facts speak for themselves highlighting that the rate of battery faults in vehicles was negligible.

    The reliability of plug-in vehicles has been further highlighted by Nissan with more than 140 LEAF hatchback and e-NV200 Combi models being operated as taxis and many more taxi firms waiting for vehicles to be delivered.

    Six UK-based taxi fleets have to date collectively clocked up more than three million miles in Nissan electric cars, which Nissan says proves the two models’ reliability and durability as well as cost efficiency.

    A Nissan LEAF operated by Cornwall-based taxi company C&C Taxis has passed 100,000 miles with the owners reporting it had not lost a single bar of battery life.

    Furthermore, at least three other LEAF taxis have passed the 100,000-mile mark with more than 30 having covered more than 30,000 miles.

Visit our Frequently Asked Questions for more information.

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From time to time, we will send you news about electric vehicles and our projects.

Source West LogoSource West, was funded by Bristol City Council through the UK’s Local Sustainable Transport Fund (LSTF), to promote the introduction of electric vehicles (EVs) into the South West including Bristol City, Bath and North East Somerset, and the Counties of South Gloucestershire, North Somerset and Gloucestershire.

The project was partially funded under the ICT Policy Support Programme (ICT PSP) as part of the Competitiveness and Innovation Framework Programme by the European Community.

Read more on our Frequently Asked Questions page.

Follow Source West on Twitter, Facebook and Youtube.

Most of the content on this page, including images, was kindly provided by the Go Ultra Low national website.

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