The adoption of electric vehicles (EVs) in the UK continues to grow year-on-year due to regulatory pressures and technological advancements. With the Zero Emission Vehicle (ZEV) Mandate becoming law in early 2024, businesses are now incentivised to adopt EVs in their fleet operations.
A key element of this transition is the ongoing development of charging infrastructure to support the growing number of EVs on the road. This guide will detail the key considerations of fleet electrification for businesses; the benefits of investing in EVs and EV charging; and the financial support available to those looking to make the most out of the UK’s green transition.
What is an EV fleet?
An EV fleet is a collection of electric vehicles either owned or leased by businesses for their daily operations. An increasing number of companies are transitioning their fleets to electric cars and vans as a means of reducing both their environmental impact and operating costs.
What are the benefits of an EV fleet for business?
There are many benefits associated with businesses having an electric vehicle fleet. Here’s how your company could benefit from opting for an EV fleet over a traditional diesel or petrol vehicle fleet:
- Financial Incentives: In addition to the various grants available for businesses looking to invest in electric vehicles and EV charging infrastructure, businesses which are VAT-registered may also recover part of the VAT on related costs.
- Driving Fee Exemptions: As cities in the UK increasingly implement low-emission and congestion zones, EVs tend to be exempt or pay discounted rates when driving through these areas. For instance, EVs pay a reduced rate when driving through London’s Congestion Charge zone until 25 December 2025, and do not have to pay fees when driving through most low-emission zones.
- Lower Maintenance Requirements: Because electric vehicles have simpler mechanics compared to traditional combustion engines and do not require engine oil or coolant to operate, this usually translates to less frequent and less costly maintenance costs.
- Better Work Environment: Electric vehicles offer a quieter, smoother ride compared to their diesel and petrol-powered counterparts, thus reducing noise pollution and improving conditions for both drivers and those around them.
- Improved Public Perception: Adopting an EV fleet clearly showcases a company's commitment to sustainability and can thus improve its image amongst consumers, who are increasingly turning to ethical and sustainable brands.
Grants, subsidies and incentives available for business EV fleets
With the help of various government grants and financial incentives, EVs are becoming increasingly affordable for businesses. Despite their higher initial price tag, EVs are proving more economical over time due to generally lower ongoing expenses like insurance, fuel, and taxes.
The EV Chargepoint Grant, available for residential or commercial property managers, covers 75% of installation costs, up to £350 per charger, with annual caps on grants. Similarly, the EV Infrastructure Grant targets multi-tenancy residential properties, offering up to £30,000 or 75% of costs for installing a minimum of five charging spaces.
For workplaces, two schemes are available. The Workplace Charging Scheme is aimed at larger businesses, providing up to £350 per socket for 40 sockets. The Infrastructure Grant for Staff and Fleet is available for small and medium-sized businesses, offering up to £15,000 per building.
Additionally, the government provides grants for purchasing electric vans and trucks, with a maximum grant of £2,500 for small vans and £5,000 for large vans, limited to 1500 vehicles annually per business.
Collectively, these grants are part of a broader strategy to promote the use of cleaner, more sustainable transportation options in the UK, supporting environmental goals and reducing carbon emissions from the transport sector.
Further Advantages of EV Fleets for Businesses
- Lower Benefit-in-Kind Tax for Electric Vehicles: EV company car drivers benefit from lower BiK tax rates, set at 2% for the years 2022/23 to 2024/25, increasing gradually to 5% by 2027/28.0%
- Vehicle Excise Duty (VED): Until 2025, EVs are exempt from VED, including those priced over £40,000. Starting in April 2025, electric cars, vans, and motorcycles will be taxed similarly to petrol and diesel vehicles.
- Increased Grant Opportunities: Small businesses and registered charities may benefit from higher grant amounts as part of London's extensive £110 million scrappage scheme, aimed at reducing vehicle emissions.
- Complimentary Parking: Many cities and towns in the UK offer free or discounted parking for electric vehicles, providing a further financial incentive for businesses to adopt EV fleets.
- Tax Breaks: There are specific tax exemptions available for workplace EV charging facilities, lowering the overall cost of maintaining an electric fleet.
- Reduced Van Benefit Charge: Since April 2021, zero-emission vans have been subject to a nil rate within the Van Benefit Charge.
What are the key considerations for EV fleet charging?
Planning for an EV fleet charging system should centre around your fleet's specific charging requirements. Here’s a breakdown of key considerations:
Charging Infrastructure Planning
- Assess Charging Needs: Evaluate the current number of EVs already in use, their daily mileage and available charging times, as well as plans for future fleet expansion.
- Infrastructure Design: Collaborate with experts to create a scalable and efficient charging system tailored to your organisational needs.
- Installation Considerations:
- Determine the required charging capacity.
- Choose the appropriate number and type of charging stations.
- Select optimal locations that align with operational requirements.
Charging Locations
Install charging stations strategically along daily routes and key operational areas to minimise downtime and ensure easy accessibility.
Charging Equipment
- Consider the equipment’s charging power (AC or DC), charging speed, and vehicle compatibility.
- Opting for high-powered DC fast chargers can reduce charging time and increase vehicle uptime.
Energy Management and Load Balancing
- Consider implementing smart charging technologies for efficient energy management and load distribution.
- Optimise charging schedules to avoid peak energy times.
- Utilise load management strategies to prevent grid overloads and ensure seamless integration with existing electrical systems.
Why is EV fleet charging an important consideration for EV fleet managers?
EV fleet charging should be carefully considered by fleet managers for several reasons:
Operational Effectiveness
Consistent access to charging stations ensures that EV fleets can operate smoothly without disruptions, improving overall efficiency.
Cost Efficiency
By managing their own charging infrastructure, fleet managers can significantly reduce reliance on expensive public charging networks and control operational costs.
Environmental Impact
Private charging options can usually integrate with renewable energy sources such as solar PVs, thereby creating opportunities to help businesses further decrease their carbon footprint.
Reliability of Charging Infrastructure
Public charging stations may be unreliable due to their condition or availability. Private, full-service charging solutions ensure fleets are not affected by these issues.
Flexibility and Customization
Full-service EV charging systems allow fleet managers to customise charging practices based on the fleet's specific needs, such as adjusting charging speeds and schedules to optimise energy use.
Future Readiness
As the automotive industry evolves, having a robust and adaptable charging infrastructure prepares fleets for future changes and advancements.
This approach not only supports the day-to-day management of fleet operations but also aligns with long-term strategic goals for sustainability and efficiency in fleet management.