The UK government’s ambitious target of achieving net-zero emissions by 2050 is in doubt. The one thing that we do know, though, is that it’s a responsibility that will be beared on businesses, not people, because current civilian-driven schemes are ineffective.
Transport is a huge contributor, as we witnessed just how clean the air became during lockdown. As such, UK companies’ quick win to cut emissions is by proactively adopting electric vehicles. Not only is it a clear representation of social responsibility (ESG), but it’s also self-serving, with lower running costs, insurance and road tax.
Transitioning to electric fleets will also help to comply with increasingly tricky environmental regulations. With laws expected to change, EVs can help future-proof a fleet and get ahead of the curve on the inevitably more demanding rules from regulators, and expectations from stakeholders.
Beyond environmental considerations, companies are discovering some rather compelling financial reasons for this transition. Although initial purchase prices remain somewhat higher than traditional petrol or diesel vehicles (though, VW has recently announced a 20,000 EUR electric car that will be available in 2027), the total cost of ownership for EVs is becoming more attractive.
Electricity costs a less per mile compared to fossil fuels, so there are marginal savings down the line that grow as the miles rack up. With fewer moving parts, there’s also less maintenance and repairs. Companies can also benefit from favourable company car tax rates for EVs, and this is the case all around Europe and North America.
The added value of EV fuel cards
An additional benefit supporting corporate EV adoption is the availability of specialised EV fuel cards. These cards help to simplify payments, which can be used at thousands of charging stations around the country. In the UK, some UK fuel cards provide HMRC-compliant reporting, not to mention the streamlined accounts and lower risk of fraud.
Government policy is no doubt important. The Zero Emission Vehicle (ZEV) in the UK mandates that vehicle manufacturers ensure a certain proportion of their vehicle sales—28% by 2025 and 80% by 2030—are fully electric. It’s expected that this may extend to fleets (not sales) for all businesses. The UK government plans to phase out new petrol and diesel car sales in their entirety by 2030, so there is a sense of urgency not to appear outdated as this transition becomes hyper-visible. While certain tax exemptions for EVs will end soon, company car tax rates remain lower compared to conventional vehicles. Ultimately, we cannot predict U-turns and when more EV incentives will come around – particularly in the aftermath of US tariffs.
Market growth during advancements
Advancements in battery technology is perhaps the driving force behind EV adoption rates, because it’s the difference in extending range and reducing anxiety. Between 2020 and 2022 alone, battery-powered vehicle registrations in the UK increased. The UK itself is falling behind on target, but the global movement is driving UK sales regardless as we access their technology. VW appears to have stepped up with a low-cost model, and so this could spell good news for European businesses in the face of a global trade war. Enhanced battery range technology has ultimately made EVs feel as though they have less of a trade-off.
Although the UK isn’t necessarily driving EV technology or industry, it’s improving EV charging infrastructure in a steady way that’s seen an increase in the number of new charging stations. With the government aiming for at least 300,000 public charging points by 2030, it’s difficult to see any solution beyond EVs to a company fleet in 2025.
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