Electric vehicles for businesses: is it worth it?

A Question of Cost

The price of a new electric vehicle (EV) has reached parity with a petrol-fuelled internal combustion engine (ICE) vehicle, taking down the primary barrier that prevents consumers from switching to electric. But is it the right choice for your business? A decrease in price alongside government incentives across a range of European countries means that increasingly EVs are becoming a viable option. The UK has committed to banning the sale of new ICE cars and most hybrids from 2030, leading to projections that fully electric cars on UK roads will rise from 400,000 as it stands today, to 25 million in 2035.

Multiple European Governments are offering subsidies to further decrease the costs of EV ownership. In Germany, VAT has been temporarily lowered from 19% to 16% for low-emission vehicles, while also offering subsidies of almost $7,000 on EVs costing less than $45,000. In the UK, the government has been investing in charging capabilities, especially for workplace car parks, as EVs become central to commuting. The Workplace Charging Scheme provides vouchers towards up-front costs of purchase and installation of charge points for eligible businesses and has already invested £3.7 million on 8,500 workplace charging points. This takes away some of the historic capital barriers to workplaces switching to electric fleets.

Performance and Viability

Businesses cautious about switching to electric fleets have cited fear over long-distance driving capabilities and a related lack of charging infrastructure. In the UK, charging access is still a “postcode lottery” according to analysis by HSBC. This lottery does, unsurprisingly, favour the City of London, where there are 360 charging points per 100,000 people. At the other end, Fenland in Cambridgeshire offers only 3.9 per 100,000, so location remains a factor. However, for businesses needing to drive across the UK, it is becoming increasingly possible.

There are more charging locations than petrol stations, with at least one rapid charge point§ at 95% of motorway services. Questions over battery and the longevity of the car also come into question in considering switching to EVs. Most EV manufacturers offer a five-to-eight-year warranty on the battery, meaning a shorter lifespan than an ICE vehicle, with associated environmental costs in disposing of the batteries. EV batteries can also require rare elements like lithium and cobalt, for which unsustainable mining practices have come under scrutiny. However, research has shown that EV batteries can last up to three times as long as their warranty.  In the UK, the Faraday Institution has been running since 2017, leading research and development into batteries, backed by £108 million in government funding, meaning that large-scale commercial solutions are on the horizon.

Environmental Benefits

The major pro of EVs is their environmental benefits, reducing tailpipe emissions to zero while also improving local air quality noise pollution. Even considering emissions produced during production, EVs reduce CO2 emissions, from 190g per kilometre in an ICE to 124kg per kilometre with an EV. For cars racking up many kilometres over their lifetime, the reduction in average emissions only becomes greater, meaning that for heavy-use fleet cars for companies, they are the greener choice. However, EVs are not a silver bullet, as the House of Common’s research briefing states: “The emissions from the use of an EV can only be as clean as the charging power supply.” That is why it is essential to underpin EV use with renewable energy, such as solar. As the power sector decarbonises, EVs will produce even fewer emissions. As part of a drive toward renewables, solar provides long-term answers to the possible pressure put on the grid, while also offering local solutions to home and workplace charging for EVs.