Getting An Electric Van Through A Business
This guide will look at road tax and electric cars.
More specifically, do you pay road tax on electric cars?
And if so, what sort of price will you be paying?
Let’s take a look…
The Rising Trend of Electric Vehicles in Business
Rapidly evolving technology and rising global environmental concerns have significantly increased businesses turning to electric vehicles.
There are several reasons for this transition. Firstly, EVs help reduce greenhouse gas emissions, aligning with the growing trend of corporate sustainability. Secondly, the total cost of ownership of EVs is decreasing, thanks to lower maintenance and fuel costs.
Moreover, government incentives such as tax breaks and subsidies make EVs increasingly appealing to businesses.
Below are some of the specific benefits of electric vans for businesses:
- Lower Operational Costs: Electric vans eliminate the need for petrol or diesel, significantly reducing fuel costs over time.
- Reduced Maintenance Costs: With fewer moving parts than their internal combustion counterparts, EVs require less maintenance – no oil changes or engine tune-ups.
- Eco-friendly: Transitioning to EVs significantly reduces carbon footprint, contributing to the fight against climate change.
- Good PR: As businesses pivot towards sustainability, electric vans convey a positive, eco-conscious image to customers and stakeholders.
- Government Incentives: Many governments offer tax credits and other incentives for businesses transitioning to electric fleets.
Different Types of Electric Vans
Fully Electric Vans
These use battery power exclusively, offering zero emissions but requiring charging infrastructure. Depending on the model, these provide the highest range of about 100-300 miles per charge.
Charging time can vary from 30 minutes to 12 hours, based on the charger type and battery size. They’re more expensive upfront but have lower operating costs due to less maintenance and no fuel expenses.
Hybrid Vans
Hybrid vans combine a traditional engine with an electric system, improving fuel efficiency. They usually offer a range of 300-600 miles using both fuel systems, with no plug-in charging required.
They have lower initial costs than fully electric vans but higher operating costs due to fuel and maintenance of both systems.
Plug-in Hybrids
These models offer more electric range, allowing short trips solely on electricity and having a combustion engine for longer journeys. They offer a limited electric-only range (around 10-50 miles), plus a traditional engine for longer distances.
Charging times are shorter than fully electric vans due to smaller batteries. Costs and maintenance are intermediate, with some fuel use and less maintenance than standard hybrids.
Below are some of the most popular electric van models:
- Mercedes-Benz eSprinter
- Ford Transit Electric
- Nissan e-NV200
- Renault Kangoo Z.E.
- Citroën ë-Dispatch
- Peugeot e-Expert
- Vauxhall Vivaro-e
Factors to Consider when Buying an Electric Van for Your Business
When selecting an electric van for your business, consider several key factors. The range is crucial in determining if the van can meet your daily mileage needs. Assess the initial cost against long-term savings, considering lower maintenance and running costs.
Load capacity is also essential – ensure it can carry your typical cargo. Lastly, scrutinise your access to charging infrastructure. Do you have onsite facilities, or are there enough public charging stations in your operating area?
In the UK, several government incentives aim to encourage businesses to switch to electric vehicles:
Plug-in Van Grant: Businesses can get up to 35% off the purchase price (up to a maximum of £3,000) for small vans and £6,000 for larger vans that meet specific criteria.
Tax Benefits: Electric vans are exempt from Vehicle Excise Duty. Also, the Benefit-in-Kind (BIK) tax for electric company vehicles is significantly lower than for traditional cars.
Workplace Charging Scheme: Businesses can receive grants to help with the costs of installing electric vehicle charging points for their fleet.
Low emission zones: Electric vans can enter low emission zones in cities like London without incurring charges, unlike diesel vans.
When introducing electric vehicles (EVs) into your business fleet, consider the following:
- Charging Infrastructure: Businesses will need to invest in or have access to charging stations. Fleet scheduling should include charging time.
- Range Management: Route planning should account for an EV’s range to avoid running out of power.
- Maintenance: While EVs require less maintenance, training should cover new maintenance tasks unique to EVs.
- Driver Training: Employees should be trained to drive EVs efficiently to maximise range and battery life.
- Fleet Management Software: Consider software that can monitor EVs, track their charge status, and optimise routes based on the remaining range.
Financing and Leasing Options
Financing allows businesses to own the electric van, offering potential tax benefits through depreciation. However, it requires a higher upfront cost and the risk of depreciating vehicle value.
On the other hand, leasing usually means lower monthly payments and allows businesses to upgrade to newer models more frequently.
However, there could be restrictions on mileage and customisation. Both options need careful consideration based on the business’s financial situation and vehicle usage requirements.
Below are some finance options to consider:
Outright Purchase – Buying an electric van outright gives you full ownership and control. It’s ideal if your business has sufficient funds and aims to use the vehicle long-term without mileage limitations.
Hire Purchase: HP involves paying a deposit upfront and paying off the rest of the vehicle’s price monthly. At the end of the agreement, your business owns the vehicle. HP is suitable for businesses that want to own the vehicle eventually but prefer to spread the cost over time.
Leasing/Contract Hire: Leasing will mean you pay a monthly fee to use the vehicle for a specified period, typically 2-4 years. At the end of the lease, the vehicle is returned. These benefits businesses with predictable costs, no resale worries, and regular access to new models.
Personal Contract Purchase: PCP means lower monthly payments with a larger final payment if you buy the vehicle. It’s flexible and useful for businesses unsure about outright purchases.
Maintenance and Insurance for Electric Vans
Electric vans demand different maintenance than traditional vehicles. With fewer moving parts, they require less frequent servicing, reducing costs and downtime. However, battery health is crucial, necessitating regular check-ups.
Manufacturers of electric vans typically offer comprehensive warranties and after-sales services, including:
- Vehicle Warranty: Covers defects in manufacturing and workmanship, usually for around 3 to 5 years.
- Battery Warranty: Specifically covers the battery pack, often for a longer period (up to 8 years) or until the battery capacity drops below a certain level.
- Roadside Assistance: Many manufacturers provide a period of complimentary roadside assistance.
- Servicing Packages: Some offer pre-paid servicing packages, ensuring regular maintenance.
- Software Updates: Many electric vans have over-the-air software updates, keeping the vehicle’s technology up-to-date.
Conclusion
Transitioning to electric vans offers businesses significant benefits: lower running costs, environmental friendliness, and enhanced public image. Different types meet various needs, with notable models available from leading manufacturers.
Selecting the right van requires considering range, cost, load capacity, and charging infrastructure. Available government incentives, suitable financing options, and an understanding of new maintenance and insurance requirements are essential.
Hopefully, his guide helped, and for more information, see our EV guides page, where we cover more commonly asked questions.
