Electric vehicles: a quick guide for SMEs
Have you considered upgrading your business fleet to EVs or offering vehicle charge points?
Are you thinking of upgrading your business fleet to electric vehicles, or offering charge points for staff and customers? Here’s our short guide for businesses on how to make the switch.
The electric vehicle (EV) revolution is here. At the end of February 2021, there were more than 455,000 plug-in vehicles on the road – a growth of 66% in the past year alone. A recent survey found that a quarter of SMEs are already in the process of converting to an electric fleet.
What is driving business uptake of EVs?
The most obvious push towards take-up of EVs is the upcoming ban on sales of new petrol and diesel cars by 2030. Transport is responsible for over a quarter of greenhouse gas emissions in the UK, and cars form the bulk of this – so decisive action in this area is needed to get the UK to its net zero emissions goal.
Alongside the regulatory drivers, many businesses are already considering their own climate impact and how they can appeal to environmentally conscious consumers. Switching to an electric fleet presents a huge opportunity for businesses to cut their carbon footprint and demonstrate they are serious about climate change.
There are common barriers: upfront costs, knowledge and access to charging infrastructure are just some of those identified by a recent government report. But there is also help to enable businesses to make the shift.
What funding is available to help businesses switch to EVs?
There are several government initiatives to encourage business take-up of electric cars and vans:
- The Workplace Charging Scheme: The WCS has been around for a while but has only just opened to SMEs and charities. It provides support towards the upfront costs of buying and installing EV charge points, covering up to 75% of costs. It’s capped at £350 per charge point socket, but each applicant can get funding for up to 40 charge points.
- Plug-in car and van grants: You can get a discount on the price of new low-emission vehicles through a grant the government gives to vehicle dealerships and manufacturers: the list of eligible vehicles is here. You don’t need to do anything if you want to buy one of these vehicles – the dealer will include the value of the grant in the vehicle’s price.
- Tax incentives: Currently, all pure electric cars pay 1% tax for the first year, rising to 2% in 2022/23. In contrast, any vehicles without zero emission capability pay a rate from 15% upwards.
What do businesses need to think about before making the switch?
- Identify the right EV for your business. There is a wide range of EVs available, including 100% electric and plug-in hybrids. It may be a challenge to identify which is most suitable to your needs (driving range is one important factor), as well as when to replace. The Energy Saving Trust offers a fully funded ultra-low emission vehicle review, which provides analysis of your current fleet and identifies where EVs could be appropriate and cost-effective.
- Charging infrastructure. While you may not need to charge every vehicle in your fleet every day, it is likely they will need to return to base to be recharged overnight on a regular basis. Having the right infrastructure in place is vital here. Charge points will need off-street parking, so you need to ensure you have adequate space for these to service your EV fleet. You will also need to check any grid capacity constraints as this may cause issues if you are charging EVs at the same time. These are all things that Good Energy can help you with through our One Point service. It’s worth thinking about how you can support your employees to make the switch to EVs too. One in three homes don’t have a driveway, so by providing charge points for staff, you are doing your bit to encourage a greener commute.
- Making the switch truly green. You can make your charge points even greener by switching your business energy supply to one that is backed by 100% renewable electricity.
How much can your business save by switching to EVs?
Buying an EV is still more expensive than petrol or diesel cars or vans. But it is important to weigh up the long-term savings that can be made, rather than just looking at the face value of the vehicle. According to Go Ultra Low, 435,000 small and medium sized firms could each save up to £1,440 per car every year. If you calculate the total cost of ownership, the numbers stack up in favour of EVs.
Because you won’t be paying for petrol or diesel to keep your fleet running, you can save a lot of money on fuel. The cost of electricity to power an EV does, of course, depend on your electricity tariff – but you could see around a 65% cost per mile reduction by switching from petrol or diesel to electricity.
There are maintenance savings too. According to KMPG, the service, maintenance and repair costs of an EV are between 40% and 60% lower than for an internal combustible engine car. These reduced costs are down to the number of moving parts – an EV has just 20 moving parts, whereas internal combustion engines have as many as 2000, according to research by Forbes.
Are there any other business benefits?
There are clearly financial and regulatory pulls towards making electric vehicle charging a normal part of the workplace. So it makes sense to make the switch sooner rather than later.
Charge points also present an opportunity for some businesses to increase footfall and sales. If you are a retail or hospitality business, providing charge points gives customers a good reason to come to your site and purchase your goods or services while they wait.
But the benefits go further than this. With sustainability becoming a key part of the decision-making process for consumers, using EVs not only helps decarbonise transport, but also shows you are serious about the climate crisis – enhancing brand reputation by demonstrating green leadership. By going further and choosing a 100% renewable electricity tariff to power your EVs, you can have a tremendous impact on your business’s carbon footprint.
