An electric car offers lots of advantages for business, from simple running and maintenance costs to tax benefits.

Running costs

Although electric vehicles are more expensive to buy, they have significantly lower running costs when compared to petrol or diesel equivalents.

The British Vehicle Rental and Leasing Association has calculated that depending on when and how an electric vehicle is charged it will cost 2-4p per mile to run. This compares to 10-14p per mile for an equivalent petrol or diesel vehicle. Therefore on average the fuel costs based on an annual mileage of 10,000 would be:

  • petrol/diesel - £1,200 (based on 12p per mile)
  • electric vehicle - £300 (based on 3p per mile)

Tax benefits for business

The table below sets out the current tax treatment of electric vehicles and clearly shows the benefits for businesses.

Measure Electric vehicles
Fuel duty Exempt (N/A)
Vehicle excise duty Exempt (as tailpipe emissions are less than 100gCO2/km)
Company car tax Employees and employers exempt (from income and national insurance contributions respectively)
Van benefit charge Employees and employers exempt (from income and national insurance contributions respectively)
Fuel benefit charge Exempt (N/A)
Enhanced capital allowances 100 per cent first-year allowance – business can relieve entire cost of an electric car or van against taxable profits in the year of acquisition

Sales and after care

Electric vehicles have very few moving parts therefore they require very little maintenance. This is a considerable cost saving, especially as cars get older.

Image benefits

The impact of climate change and the green economy are concerns for consumers and businesses alike. Moving to electric vehicles gives businesses the chance to become associated with an innovative and exciting project that addresses these issues.

Plug-in car and van grants

Significant grants, of up to £5000 off the price of a new electric car and up to £8000 off the price of a new electric van, are available. See the section plug-in car and van grants for further information.

Battery hire

There are electric vehicles on the market that offer battery hire options, which reduces the initial purchase cost and makes the car more affordable.

For example: Battery hire for a Renault Kangoo ZE van starts at approx. £70 per month for 12,000 miles per year. Renault also offers full recovery service in the event of all type of breakdown. This allows the purchase costs of a Renault Kangoo ZE of around £13,500 with the UK government van grant. Current petrol and diesel equivalents of the Kangoo costs are approximately £15,000. Running costs, including the battery hire, are still over 50 per cent cheaper in the Kangoo ZE.

Convenient charging

In addition to the massive public charging infrastructure that will be in place throughout Northern Ireland by April 2013, business users will be able to charge electric vehicles on site via their workplace charge point. There is a £1,500 grant available for purchasing a smart workplace charging point for the first 150 fleet cars registered to the ecar scheme.