In the second part of this guide to EVs series, we address the cost benefits of transitioning your fleet to electric vehicles.
Electric vehicles save you money, thanks to reducing costs, government grants, tax benefits and avoided levies.
As a new technology, EVs are currently more expensive to produce than ICE equivalent vehicles. However, increasing production capacity and demand will bring costs down. To stimulate demand, and therefore technology development, the Government provides financial incentives for EVs. This is a tried and tested method to develop a healthy competitive market for a new clean technology, as demonstrated with solar PV. However, this also opens up uncertainty and risk as vehicle cost-effectiveness for users is dependent on government subsidies.
With vehicle purchase price brought in-line, EVs offer fuel cost savings and tax savings that could reduce costs by up to £1,500 per year for a typical car-driver. For fleet managers, this means whole-life-costs for EVs fall below that of similar diesel or petrol vehicles. Personal car owners can take advantage of the growing availability of personal financing options and save from day one.
The longer-term cost benefits for EVs are harder to judge. It is likely that the current tax benefits and subsidies will be phased out as EV uptake increases. However, this will be balanced against increasing levies on polluting vehicles and cost reductions in EV capital cost and maintenance costs. The Government must therefore manage EV incentive schemes carefully as the market develops.
Authored by Jonathan Bassett, Technology and Innovation Consultant