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EV salary sacrifice adoption happening quickly in the “right conditions”, says Arval 

A 280% growth has been seen by Arval UK in the number of vehicles it operates under its Ignition salary sacrifice product during the last 12 months, with the top 15 cars chosen now all electric vehicles (EVs).

Arval UK has seen a 280% growth is salary sacrifice, with EV adoption being the main driver for change.

Richard Cox, consultant at Arval, explained that the growth showed both the burgeoning popularity of “sal-sac” and how quickly EV adoption could happen in the “right conditions” – with an appropriate combination of supportive tax incentives, increased vehicle choice and firm employer commitment.

“The introduction of zero and very low rate benefit-in-kind taxation rates on EVs has made these schemes very attractive and led to this rapid expansion in Ignition. The latest, most advanced and environmentally-friendly cars can be offered to employees at extremely attractive monthly rates, supported by more choice in the electric car marketplace which means that there’s an option for every budget and lifestyle need.

“We are finding that salary sacrifice fits not just the needs of people who would like a company car and do not currently qualify for one, but also employees who have taken a cash allowance option and are looking for alternative car provision.

“The level of interest being shown across companies with which we are working is ever-growing. These schemes provide a range of genuine advantages to employers and employees, with no real downsides or compromises.

“They also, of course, show exactly how rapidly EV adoption can occur in the right conditions, which is something that we believe is extremely important from a corporate point of view and as we all work towards the 2030 electrification deadline.”

Other factors playing a part, he added, included the reluctance of employees to return to using public transport in the wake of the pandemic and a desire for companies to enhance employee benefits in an increasingly competitive recruitment market.

“There remains an ongoing reluctance among some employees to use buses and trains for commuting and business trips, with an accompanying desire to switch into environmentally friendly cars. Salary sacrifice is ideal for people who find themselves in that position.

“In this way, a mobility role is being established for EV-based salary sacrifice as a key element in a wave of new benefits initiatives that are designed to bring innovative options and ideas into play for employees, with only a very limited investment required by their employer.”

“Earlier this year, we released some figures showing that almost 9 out of 10 cars leased through Ignition were now EVs, an increase over the last two years from just 4 out of 10. That very clearly illustrates the dramatic rate of change.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.