Tuesday, February 21, 2012. The Green Piece Column.
With the Plug-in Car Grants (PICGs) set to expand to vans and light commercial vehicles (see story)-PIVGs as the will be known-electric vehicles look like they could ever more creep into the business sector.
A new report from the Massachusetts Institute of Technology (MIT) suggests that electric vans would quickly recoup any additional outlay made by businesses in purchasing them, through their reduce running costs (see story). While the research is focused on the benefit of EVs to US business, with generous grants and higher fuel costs in the UK, it seems like the conclusion of this study could ring even more true over here.
With the first vans eligible Plug-in Van Grants now confirmed (see full list*) we know that firms buying one of these vehicles will be able to claim 20 per cent towards the cost of the vehicle, up to a maximum of £8,000-no small sum to a savvy buyer.
What’s more, public sector organisations can also take advantages of subsidies to help them procure hybrid commercials (see story)-another boost for the use of electrified-vehicles within the workplace.
With businesses often more able and willing to take a long-term view of their transport strategies than private motorists, could it be business-rather than the general public-that drive a switch to electric vehicles?
Hi-ho: why EVs are off to work
It is not the low running costs of a few pence a mile that will drive business interest in electric vehicles nor the availability of grants to subsidise their purchase. EVs can benefit companies in many ways. These include tax incentives such as a zero-rate of company car tax guaranteed until 2015, so no Class 1A national insurance contributions for employees to pay, likewise low emission vehicles such as plug-in hybrids will be eligible for a low rate of just 5 per cent from April 2012 if their emissions are below 75g/km CO2.
There is also a 100 per cent year-one capital allowance, so a business can write 100 per cent of the upfront capital cost of buying the van against their year-end profits until 2013. There is no road tax to pay either and electric vans are exempt from the London Congestion charge.
EVs are also helpful to companies when it comes to meeting Corporate Social Responsibility (CSR) and environmental policies, often helping businesses meet carbon reduction targets and even better, the use of EVs often makes for good PR too, giving a company a green policy to boast about. Just think how many times publications such as ours have mentioned companies which are switching onto the tailpipe emission-eradicating power of EVs. It all makes for good press and a better public image.
Taking the good and the bad
It is not just the strengths-but also electric vehicle’s weaknesses –that businesses will be better able to turn to their advantage than private motorists.
A firm’s ability to cope with the upfront additional cost of an EV isn’t the only shortcoming of electric vehicles which businesses are better able to overcome than private drivers. They are also better able to deal with that other major EV bugbear; limited range and the need for recharging facilities.
A company with a fleet of vans; perhaps with a mixture of fuel types, is more able to plan use and vehicle down-time around an EV’s range and recharging needs. Private motorists, while likely on a daily-basis to make only short journeys, is still likely to feel frustrated on the odd-occasion he/she wishes to make a journey of hundreds of miles, especially if an electric model is their only ride.
Likewise, when it comes to plugging in, companies with fleets have forecourts to use, where they can park an EV near a charging point. Meanwhile many private motorists, without drives or garages, will be left considering running extension leads out of windows and across streets to when they consider buying an electric vehicle.
Finally, fixed servicing schemes and battery rental systems such as Renault’s (which leases its Kangoo EV’s batteries for £60 a month) will help convince companies that taking on an as-yet largely unfamiliar technology will not be entirely to their risk should the worst happen.
Our verdict: 2012 will see business switch on
The first vehicles eligible for the PIVG subsidies have just been confirmed this morning by Office of Low Emission Vehicles and with grants available from March this year, the incentive will be available in time for the new 12 registration plate.
Electric vehicles already available to buy or lease and qualifying for the Plug-in Van Grants include the Renault Kangoo Z.E, the Ford Transit Connect EV and Mercedes’ Vito E-Cell (*full list of the first seven eligible vehicles below). There are more models that could arrive in the UK before long too, including the Mercedes Citan set to make its debut in Geneva next month (see story) and the Nissan e-NV200 which is already being trialled in the UK and Japan.
While the grants will only be available to category N1 vehicles that meet a number of safety, range, warranty and speed criteria (see OLEV’s website for the full list of criteria), there are other commercial vehicles, like the range from Aixam Mega (pictured above) that can also help businesses make the switch to electric power and still offer substantial running cost savings.
Is business set to switch on to the power of EVs this year? We’d say that has to be a big yes. Watch out for more news stories along that line, coming soon on the website.
*The first seven vans to be made eligible for the grants are;
- Azure Dynamics – Transit Connect Electric
- Daimler Mercedes-Benz – Vito E-Cell
- Faam – ECOMILE
- Faam – JOLLY 2000
- Mia-electric – Mia U
- Renault – Kangoo ZE variants Kangoo VAN ZE, Kangoo Van Maxi ZE, and Kangoo Van Maxi Crew ZE
- Smith Electric – Smith Edison variants SE2 and SE3
Faye Sunderland.
