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Should UK Businesses Invest in Electric Cars?

Following the proposed UK ban on diesel and petrol vehicles by 2035, how are businesses responding? According to a recent survey, almost half of all UK-based enterprises plan to invest in electric cars. To further accelerate this initiative, fuel duty will be imposed on all vehicle owners. All these are aimed at meeting emission targets and more stringent climate change protocols.

Is the electric car market increasing?

Although electric cars are becoming more popular for consumers, only 2% of new cars registered in 2019 were electric. But since the sale of EV is crucial to the government’s goal in meeting emission targets, there’s a need to promote electric vehicles for consumers and businesses.

The role of businesses in promoting EV use

Vehicles contribute about a fifth to the total carbon emissions in the UK. It’s a big help when the public shows confidence in using electric cars as opposed to traditional petrol and diesel cars. And when businesses take more significant strides in adopting electric vehicle technology, the more substantial contribution it makes to the government’s initiative.

To further stimulate the increase of EV use, there is also a scheme to help cover the cost of both workplace and EV home charger installation. Companies that want to install charging stations in their parking areas are able to apply and receive vouchers from OLEV.

Moreover, the proposed petrol and diesel ban are pushing more businesses to start planning for wider adoption of electric vehicles. From company cars to fleet transport, it makes more sense to choose electric. Indeed, companies clearly recognise the importance of EV transport in helping meet the carbon emission goals in 2050.

How does the government incentivise electric car use?

Apart from the OLEV scheme for workplace chargers, businesses can also look forward to other benefits and incentives. Rolling out these programs is critical because electric cars tend to be cost-prohibitive, especially for small businesses. There are ongoing grants for electric car purchase where a company may qualify to receive up to 35% off of the selling price.

If your business is thinking about buying a new van for delivery and other purposes, an electric model may cost 20% less with a government grant. Not only will this option provide more flexibility, but electric vans have similar loading capacity to traditional diesel or petrol vans.

Another excellent reason to consider electric vehicles is the option to qualify for tax benefits. The following are examples of exemptions your business may receive:

  • Vehicle excise duty
  • Fuel duty
  • Company vehicle tax
  • Fuel benefit charges
  • Van benefit charges

If you consider the tax exemptions and the incentives you get for buying an electric vehicle, it’s possible to recoup the entire cost within the first year of purchase.

Perhaps all these incentives are enough to convince a business to use electric vehicles. If not, then supporting a more sustainable and eco-friendly practice could be another reason. More so, the stand of the government is not about to waver, hence the only sensible direction is to start now or anytime before the ban takes effect.

Other sources:

https://www.theguardian.com/uk-news/2020/mar/08/companies-to-invest-12-billion-pounds-in-electric-vehicles
https://www.nibusinessinfo.co.uk/content/electric-vehicles-incentives-business