Electric company cars
Providing a company car to employees can be a hugely desirable perk and can help your business attract and retain the top talent in your industry. This is especially true if your employees spend a lot of time on the road travelling between offices, clients, or sites.
By driving so many miles, and with the high cost of petrol and diesel, costs can soon add up. Add to this the maintenance, tax and congestion charges, and this attractive perk can soon start to cost your business more than you budgeted for.
With an electric company car, not only can you provide employees with a vehicle, but also significantly reduce all costs involved.
The benefits of having electric company cars
By offering employees the opportunity to join a company electric car scheme, it provides a wide range of benefits not just to your employees, but to your company as well.
Benefits to your company of offering electric company cars:
- Offer an attractive perk to attract and retain your industry’s top talent
- Lower your business’s environmental impact
- Low BIK rates on EVs make an electric fleet affordable due to recoverable VAT
- Avoid the costs involved with early termination
- With elmo, our online portal makes managing your company car fleet simple and convenient
Benefits for employees:
- Drive a modern, stylish and environmentally friendly electric vehicle
- Avoid multi-year lease contracts
- The flexibility of being able to switch cars when needed
- A convenient all-inclusive package
- With elmo, employees can choose from the biggest range of EVs on the market
Obvious benefits relate to reduced costs thanks to tax benefits, but even if your business already provides petrol or diesel company cars, switching to EVs can also provide additional benefits:
- Lower maintenance costs, significantly reduced fuel costs and exemption from rising congestion charges
- Thanks to a low BIK rate – starting at just 2% – there are increased tax savings
- Help contribute toward your corporate social responsibility goals
For more information, check out our post on the full benefits of driving an electric car.
Your options: buying, leasing or subscribing to electric company cars
After deciding to offer your employees an electric company car, your next big decision is whether to buy, lease or subscribe. However, each option has its own advantages (as well as a few disadvantages).
The pros of buying an electric company car
The pros are fairly straightforward, including the aforementioned cost-saving related to tax and fuel. On top of this, your business owns the car, and therefore it can be treated as a fixed asset.
However, the initial cost of purchasing an electric car can be high and offers little flexibility. While your business does own the vehicle and can treat it like any other fixed asset, it can depreciate over time in the same way any other car does.
Buying a company electric car can also be a complex process when it comes to tax and accounting, which is why fewer companies use this option.
Benefits of an electric car lease through a limited company
Thanks to changes made by HMRC to BIK (benefit in kind) rates – which will be as little as 2% until the 24/25 tax year – an electric car lease through a limited company can be an affordable option. This means for an EV with a list price of £40,000 the BIK charge will be just £800. When compared to the price of a petrol or diesel car, which can go as high as 37%, the cost saving is plain to see.
Leasing is also simpler to manage from a tax point of view, as you don’t need to be concerned with fixed assets or depreciation. The lease cost is treated in the same way as any other monthly operating cost.
There is greater flexibility with leasing over purchasing, however, leasing will still require you to sign up for a multi-year lease – usually between three and five years. There may also be an upfront cost involved, although this is likely to be less than the upfront costs involved with purchasing. But what this does mean is that should circumstances change, you’re stuck with a lease you’re unable to get out of. It’s also worth comparing the terms of the lease with purchasing, as despite the complexity, purchasing may be a cheaper option long-term.
How an electric car subscription compares
A company electric car subscription has advantages over purchasing and leasing, and gives your business and your employees all the benefits of an electric company car with none of the big upfront costs or tax complications:
- Flexibility: an electric car subscription doesn’t require you to sign up to a multi-year deal, and instead offers you the flexibility to amend your subscription at any time. So, if your employee wants to swap their electric car or your circumstances change, you’re not locked into a contract – all you have to do is give a 30-day notice.
- All-inclusive: With an electric car subscription, everything you and your employee need to drive the car is included. This includes service and maintenance costs, MOT, tyres, breakdown cover and insurance. Remember, EVs don’t require road tax, saving you another annual cost.
- No upfront costs: With an EV subscription, all you pay are the monthly costs, unlike leasing or purchasing which require a large upfront payment or a deposit.
- No depreciation: Because your business doesn’t own the vehicles, it isn’t classed as a fixed asset and therefore doesn’t lose value. This means it’s far easier to subscribe to an EV from an accounting and tax point of view.
How elmo’s electric company car scheme works
Organising your company’s electric car scheme through elmo is simple and convenient:
- Step 1: sign up via the elmo website
- Step 2: browse and select your electric car from the widest range of EVs in the industry
- Step 3: follow the process for each car, including the employee as the main driver
- Step 4: our team will review your booking for a quick approval check, and contact the main driver to arrange a delivery date
- Step 5: your employees will enjoy their new EVs, and your business will enjoy the benefits
- Step 6: once you’re ready for the subscription to end, simply give us 30-day notice – we’ll then arrange to collect the car from the main driver
Our top picks for electric company cars
Audi e-tron 55 Quattro S Line
The Audi e-tron is perfect for drivers after a company car that is understated – great for eco-conscious, no-nonsense drivers who are looking for practicality, refinement, and zero-emissions.
Tesla Model 3
The Tesla Model 3 is a high-performing, technology-packed EV that has a fantastic range of up to 280 miles. Tesla is an industry leader, and the Tesla rapid charging network is perfect for employees who spend a long time on the road.
Kia e-Niro 2
The Polestar 2 is a futuristic, all-wheel-drive EV with powerful acceleration. Its excellent range and performance make it ideal for long business trips, with plenty of comfort and technology.
Renault ZOE GT Line+ EV50
The Renault ZOE is practical and stylish. Light control makes it a perfect city car, and a great range means regular commutes are done so with ease.
The i-Pace is Jaguar’s first all-electric car, and is every bit as bold and powerful as you might expect. With punchy acceleration and spot-on handling, it’s a great choice for regular commuters.
Is there a minimum number of company cars you can have?
There is no minimum – just sign your business up here to add one subscription or as many as you need for your business.
How long is the term of elmo’s electric company car subscription?
Our business subscriptions (with the exception of Salary Sacrifice) are exactly the same as our personal subscriptions – so you just give a 30-day notice at any point to swap or end a subscription.
Can you get EV chargers installed at the office?
Yes! Many companies choose to install EV chargers at the workplace and there are often grants available to do so. Check if you are eligible for ‘The Workplace Charging Scheme’, a voucher scheme offered by the UK Government.
Where can you find information on electric company car mileage allowance?
HMRC company car mileage allowances can be found here. The UK Government currently advises a rate of 5 pence per mile for fully electric cars.