As we get closer to 2030 are you ready to go electric?

While the speed, battery charge range and battery life of electric cars are all improving, and charging is cheaper than petrol or diesel, the main concern for many businesses is the availability of the charging structure. To make the change viable, the charging structure will need to be dramatically extended, and the Government’s target is to provide 3 million charge points by 2025.

Currently, using public charging points can be problematic, as there are multiple types, you may need to carry adaptors and the costs are unpredictable. Businesses can apply for a grant from the Government’s Workplace Charging Scheme to reduce the cost of installing charge points on their premises; over time, more homes will also have charge points installed.

While 3 million is still only a small proportion of the 38 million vehicles currently on the road, there is a move towards electric. UK sales of new petrol and diesel cars are set to be banned from 2030 and, over the next three to five years, the value of diesel and petrol cars is going to drop, as the days of buying outright and managing depreciation come to an end. Diesel and petrol vehicles can also be subject to financial penalties if they enter a low-emission zone.

To help encourage the use of electric vehicles, a number of financial incentives are available. Government grants aim to make electric motoring more affordable. The UK Government’s Plug-In Car Grant (PICG) currently offers £1,500 off the cost of an electric car costing £32,000 (previously this was £2,500 for cars under £35,000). For commercial vehicles, the Plug-In Van Grant (PIVG) offers a maximum £5,000 grant for large vans between 2,500kg and 3,500kg (previously £,6000) and £2,500 for small vans up to 2,500kg GVW (previously £3,000).

Because they emit no CO2, electric cars costing less than £40,000 are currently exempt from annual road tax (click here for Vehicle Excise Duty, VED), but this is soon to change. The Chancellor announced in his recent Autumn Statement that from 2025 electric vehicles will no longer be exempt from vehicle excise duty. Electric vehicles that are registered from April 2025 will pay the lowest rate of VED in the first year, and after that will move to the standard rate, which is currently £165. Electric vehicles registered from April 2017 will pay the standard rate.

In addition, company car drivers benefit from such incentives as lower Benefit in Kind (BiK) tax, exemption from Ultra-Low Emission Zones (ULEZ) and exemption from congestion charges. Electric vehicles also qualify for Enhanced Capital Allowances (ECAs), which means you can ‘write down’ 100% of the purchase price against corporation tax in the first year of purchase, while the Advisory Electricity Rate for fully electric cars is 5 pence per mile, considerably less than the smallest petrol or diesel engine.

One thing is clear: by driving electric, the savings soon start to stack up, making them an affordable alternative to petrol or diesel. It’s certainly a good idea to take a test drive for around an hour to get a good feel for driving electric, especially if you spend a lot of time on the road.

The incentives will continue to evolve as EVs become more popular on our roads, so it’s always worth checking what EV grant is offered before you buy. As we get closer to 2030, however, and the combustion car sales ban, these incentives may well decline, so now may be the best time to make the shift to electric.

If you’re considering making the move to electric, you’ll also need to check out insurance costs. Please call us to find out more, and we will be happy to provide further information about tailored insurance to suit your needs. Call TMD on 01992 703 000 or email: insurance@mcdonaghs.co.uk