Caroline Sandall-Mansergh, consultancy and channels development manager, Alphabet GB

Caroline Sandall-Mansergh, consultancy and channels development manager, Alphabet GB

What’s driving electric vehicle adoption in the UK?

With sustainability becoming ever more important to both businesses and consumers, it’s been good to see the transport industry and government begin to take more action to tackle climate change and advance sustainable solutions.

Clean Air Zones have continued to roll out across the UK, alongside planned expansion of London’s Ultra Low Emissions Zone set for August, and with net zero deadlines firmly in place, addressing climate change head on through sustainability initiatives is quickly becoming central to most business strategies. Electric vehicles are already a core component of many such strategies and businesses are increasingly prioritising fleet electrification as a way of working towards their own sustainability ambitions whilst preparing for the 2030 ban on new petrol and diesel vehicle sales.

Alongside sustainability, cost is another primary factor influencing decision-making. When whole life cost is taken into account, EVs can offer compelling savings for businesses and drivers compared to petrol and diesel vehicles. And, promisingly, energy-efficient vehicles are already becoming cheaper to access as more variety enters the market, helping to reduce upfront costs.

Demand for EVs has been significantly boosted by favourable Benefit-in-Kind (BiK) tax rates, creating a real incentive for drivers to choose an EV as their next company car. Tax benefits such as this have helped schemes such as salary sacrifice grow in popularity. Salary sacrifice supports further electric adoption by allowing drivers to enjoy the advantages of EVs without the worry of high purchase costs. In effect, thanks to the tax reductions the flexible funding scheme offers, both employees and employers can save money.

The British Vehicle Rental & Leasing Association (BVRLA) attributed an increase in zero-emission business car leasing to low BiK tax rates in its Road to Zero Report Card 2022, reporting a rise from 8% in 2021 to 17% in 2022. The report also highlighted a 33% jump in salary sacrifice volume year-on-year with zero-emission vehicles comprising over 80% of all new cars ordered through salary sacrifice schemes in 2022.

What strides have been taken to improve infrastructure for EVs?

The successful implementation of accessible charging infrastructure throughout the UK is essential in the transition to EVs, ensuring drivers are able to charge vehicles with convenience and ease wherever they are. While there has been positive change over the past few years to help drive improvements in public and private provisions, progress has been slow and there is still much to be done to accelerate the rollout, in addition to improving the uptime of existing charge points.

The development of workplace charging infrastructure has been encouraged with the support of a 100% first-year allowance for electric charge point equipment expenditure. A two-year extension to the current allowance, due to be legislated in the 2023 Spring Finance Bill, will mean companies can continue to receive incentives for implementing their own charging infrastructure until at least 2025. Continued investment in workplace charging is essential in helping to improve charge point accessibility and a key way that businesses can support their drivers, particularly those who are unable to charge at home, in transitioning to electric.

At a broader level, the UK government has set aside £1.6bn to invest in expanding the UK’s public charging network with the aim of making 300,000 public chargers available by 2030. A pilot project is also expected to deliver over 1,000 new charge points for EVs throughout England after the Government announced £20m in funding to support the Local EV Infrastructure Initiative in August.

There are currently an estimated 37,000 public charge points in the UK, with around 600 new points being added to UK roads each month, so whilst these are steps in the right direction, we really need to push our foot to the pedal to increase rates of addition.

There is still a great deal to do, not only to increase the number of charge points available, but to also make public charge points more suitable for commercial vehicles and reduce geographical and cost disparity so that EV charging is more accessible for all.

Driver concerns over broken or busy public charge points remain challenges to overcome and extra planning is required for those who are unable to charge at home or at work. More consideration also needs to be given to the safety of lone drivers when installing new charge points by properly assessing a location’s environment, facilities, charge point functionality and overall accessibility.

How can the Government help to keep up the momentum of the EV push?

There is no question that EV adoption in the UK has accelerated thanks to industry and government initiatives over the last few years. The automotive industry itself has been making positive progress towards electrification, as acceptance and demand continues to grow, with the UK’s millionth plug-in electric car taking to the roads in September.

However, this progress will only be amplified with further initiatives, both from inside and outside the automotive industry. With the existing grants and infrastructure focuses, it’s vital these positive steps towards electrification, balanced with core incentives, continue to be supported at a government level so that the fleet industry is empowered to help fleet decision-makers put electrification into motion.

And while initial incentives outlined by the Government have helped support the cost of transitioning to EVs, it is crucial that ongoing certainty is provided for businesses so a catalyst for adoption remains across the UK. The much-needed clarity on future BiK and Vehicle Excise Duty (VED) rates for EVs outlined in the Chancellor’s Autumn Statement, for example, means that proper long-term planning can begin for both businesses and drivers.

Are we there yet?

It’s an exciting time to be part of the movement towards a more sustainable future, and the pace at which the transition is happening is encouraging to see, especially at a time of ongoing supply chain challenges for the industry.

But there’s still much to do. Maintaining forward momentum is key if the UK is to continue to defy expectations around electric vehicle uptake. The ways in which the industry is already improving access to EV adoption, along with necessary support from the UK government around tax benefits and infrastructure, will be integral to meeting net zero targets.

As 2030 draws closer and sustainability becomes an even higher priority, leasing providers remain on hand to help businesses explore opportunities and ensure all driver needs are provided for on the road to zero.