Media post: What are the benefits of choosing electric vehicles as company cars?

With carbon emissions becoming a much bigger focus in recent times, diesel cars are starting to be a less popular choice as a company car. For businesses, making the switch to electric vehicles is now more appealing than ever, due to advancements in technology and numerous incentives being introduced.

There’s never been a better time to opt for an electric vehicle like the Mokka e as a company car, and here are some of the reasons why.

Various incentives for qualifying vehicles

Since businesses have to foot the bill for cars that are typically more costly to buy or lease than their petrol or diesel counterparts, the government has launched various tax incentives to help increase uptake.

All electric cars that produce fewer than 50g/km of carbon emissions are eligible for first-year capital allowances. This means that you can deduct the full cost of the vehicle from your pre-tax profits. To put this into perspective, a vehicle that costs £40,000 could amount to £7,600 in tax relief in the first year.

Additionally, Benefit in Kind (BIK) tax for electric vehicles currently sits at 2% in 2023. This rate will remain the same until 2025, where it will then increase to 3%. BIK means that if you provide your employees with a financial benefit that isn’t a part of their salary, they will be taxed separately. Essentially, this makes choosing an electric car a highly tax-efficient option as opposed to the purchase of an ICE vehicle.

Electric vehicles are also exempt from congestion charges, which is ideal for workers who regularly drive through clean air zones during or outside of work hours.

Lower running costs

The largest costs that come with company cars are the running and maintenance costs. Whilst employers won’t need to fund the cost of the vehicle for private use, they will still need to pay for business use. Regardless, the vehicle will suffer wear and tear during usage and parts will need to be replaced at some point.

The running costs for electric cars are typically much lower than petrol or diesel vehicles. First of all, they are built with fewer parts, meaning fewer things are likely to break and need replacing.

Secondly, charging an electric vehicle is much cheaper than having to fill the tank with fuel, and it’s possible to save money if you provide charging stations at your place of work. You can check your eligibility for this by applying for an EV infrastructure grant.

Enhances the promotion of your company’s green initiatives

Making the shift to electric vehicles as company cars is a more environmentally-conscious option. It can help to make your business’s car usage much more sustainable and will contribute to the UK’s target of moving all personal vehicles over to electric by 2030.

This is also beneficial when it comes to meeting the expectations of your customers and clientele, who may be eager to work alongside or collaborate with businesses that share the same green ambitions they do.