Does it pay to choose an electric company car?

ULEZ and Congestion charge for electric company cars

Electric cars emit zero emissions which means they are 100% exempt from ULEZ and Clean Air Zone charges. The daily charge for driving in the zone as of August 2023 is £12.50, so if you have lots of business in London, it’s easy to see how this cost could build to around £3,500 per year for daily use. 

Until December 2025, electric cars are also exempt from London’s Congestion Zone saving £15 a day. However you will have to register your vehicle in order to avoid the charge. 

While ULEZ and the Congestion Zone is unique to London, other cities around the UK including Bath, Birmingham, Bradford, Bristol, Portsmouth, Sheffield and Tyneside are introducing their own chargeable Clean Air Zones. By switching to an electric company car, you can drive freely across the country. 

Whole life costs for electric company cars

Whole life costs can lead to big savings for electric company cars.

Take the example below based on an average 20,000 miles business lease from CBVC. The ‘fuel’ costs per mile are considerably cheaper. Which can result in significant savings – especially if you’re driving long distances on business. 

Then there’s maintenance and repairs. Electric cars have fewer moving parts that can become damaged or worn down, plus regenerative braking which places less strain on the brakes. All of which generally means less maintenance, downtime and costs. EVs also don’t require diesel particulate filters or additives such as AdBlue, both of which come at a cost. So much so, that Go Ultra Low – from the UK Government – once estimated that an electric car’s maintenance costs will be around 70% less than those of diesel or petrol cars over its lifetime.

Running costs for electric company cars

So how do electric company cars compare when it comes to charging up versus filling up?

For both convenience and cost effectiveness, you’ll want to charge your car at home. To make the biggest savings, you’ll charge your car overnight off-peak, when the cost of electricity is less. But since these off-peak prices are variable, we’ll be using the average standard tariff price per unit, which in December 2023 was 27.35p per kWh.

You can work out how much charging is costing you by following a simple calculation:

Battery size x Unit price of the electricity per kilowatt-hour (kWh)
So, let’s use the example of a Kia Niro EV which has a 64.8kWh battery and can travel up to an advertised 285 miles on a single charge. Based on the average cost of electricity in December 2023 of 27.35p per kWh, a full charge of the Niro EV will cost you:
64.8 x 27.35 = £17.72 

When it comes to rapid public chargers, prices are generally more expensive, but conversely, some also enable drivers to top-up for free. 

Business Contract Hire

If you’re a sole trader, limited company or partnership who want to lease vehicles rather than own them, Business Contract Hire is for you. Lease an electric company car or a fleet through your business, and you could save on everything from National Insurance to VAT.

• Generous savings on employers’ Class 1A National Insurance
• 50% back on VAT on vehicle payments and 100% VAT for maintenance (VAT registered companies only)
• 2% fixed driver BiK rates until 2025
• Small upfront costs from just one month in advance
• Lower running costs when compared to diesel or petrol equivalent

Salary Sacrifice

If you think leasing means a lump sum upfront, think again. With Salary Sacrifice 
there are no upfront costs to employers or employees. Electric car salary sacrifice is a tax-efficient way to save up to 40% on brand-new electric cars. The lease fee is deducted at source from gross salary, saving on tax. 

Great for employees:

• 2% Benefit in Kind (BiK) rates until 2025 – compared to some diesel cars at 37%
• 100% exemption from ULEZ and clean air zone charges
• Average savings of £732 a year on fuel compared to petrol and diesel cars (based on 8,000 miles) 
•  Average 47% savings on maintenance and insurance 

Great for employers:

• No upfront costs 
• Save 13.8% on National Insurance on the amount sacrificed by your employee
• Market-leading risk protection in case employees leave 

Popular electric company cars

At ElectriX, we partner with electric lease car specialists CBVC who offer a choice of over 100 models, from more than 30 manufacturers. Here is a quick guide to some of their most popular models – many available within just 30 days.