Is an electric company car or van a viable option for my business?

A lot of thought goes into choosing the right company cars, or vehicles for your business. In finding the right vehicle for your needs, you need to take into account a whole host of factors, including, cost, availability, reliability, your brand image, and emissions.

In recent years electric cars have become more and more commonplace for environmentally aware drivers. Boasting zero emissions, a silent cockpit and advanced technology, they certainly possess some attractive qualities – but are they right for the day-to-day needs of you and your business?

If you’ve found yourself asking this question, these are some of the key issues for you to weigh up if you are considering buying an electric company vehicle:

  • Cost
  • Plug-in car and van grants
  • Availability
  • Vehicle Excise Duty (VED)
  • Maintenance
  • Range
  • Charging
  • Insurance
  • Emissions

This guide addresses each of these points in turn:


Cost is can be a deceptive factor in the purchase of an Electric Vehicle (EV). The upfront cost of an EV is generally higher than that of a petrol or diesel powered vehicle. However, the low cost Vehicle Excise Duty and long term savings on fuel/power make up for it over the course of a vehicle’s lifespan.

Comparing 8 of the most popular company cars of 2015 (including Ford Focus, VW Golf and BMW 3 series), with 8 of the best EVs of 2015  (including Ford Focus Electric, VW eGolf and BMW i3 hatchback) reveals some surprising statistics.

The average purchase cost of the Top 8 electric vehicles is £26,076, which is £2,445 more than the average price of the 8 most popular traditionally-powered company cars (£23, 631).

However, the average cost for keeping a petrol or diesel powered vehicle, taxed and fueled for a year (on a 10,000 mile basis) is around £900, compared to £490 for an electric vehicle. So lower fuel costs and VED rates for EVs, mean the extra outlay can be offset by annual savings.

Purchase and running costs of EVs compared to petrol/diesel cars

The comparable costs of purchasing, taxing and fueling these popular company cars (10,000 mls/yr) over 2, 5 and 10 years are shown below;

Purchase and running costs (fuel for 10,000 miles & car tax)

Av. cost for Top 8 Petrol/diesel cars

Av. cost for Top 8   electric cars

2 years



5 years



10 years




Of course the savings in fuel increase, if you drive more than 10,000 miles per year.

Plug-in car and van grants

The UK government offers various grants for electric cars and vans, or ‘plug-in cars’ as they call them, to help sway your decision.

You can get:

  • Up to 35% off the cost of a car, up to a maximum of £5,000
  • Up to 20% off the cost of a van, up to a maximum of £8,000

You can find out more about the grants available to purchase electric vehicles on the Gov.UK website here.

The grants are sizeable, sowill certainly help to encourage businesses who are tempted by a plug-in company car or van, to take the plunge.


Because of how new EV’s are in relation to other more commonplace vehicles, the level of choice is considerably more restricted. Whereas there are hundreds of models to choose from with petrol powered cars, there are only a handful of EV’s in contrast. Choice is even more limited when it comes to vans or larger transporters.

This will improve as time passes and demand for EV’s increases, although at present there may not be a readily available model for every business’ requirements and budget.

Vehicle Excise Duty (VED rates)

Vehicle Excise Duty is a relatively small chunk of the cost of car ownership, however as many businesses can attest to, taxing an entire fleet at £100+ per vehicle quickly adds up to a significant cost.

EV’s are totally exempt from Vehicle Excise Duty as well as the London Congestion Charge under UK regulations, as long as the electricity comes from an external source or storage battery and as long as it is not connected to any source of power when the vehicle is moving.


Unlike petrol powered cars an electric engine has no moving parts, therefore minimising what could possibly go wrong with them.

The battery itself and various connectors are the only elements that can fail or break down. Battery failure is something that your average mechanic won’t be well equipped to fix, which could mean costly charges from a specialist should this happen.

The long-term reliability of EV’s is hard to determine for the simple reason that they haven’t been around long enough to collect enough data on their reliability at an older age. Despite this, from new they are just as, if not more, reliable than their petrol powered cousins.


The range of EV’s is currently somewhere between 40-100 miles, depending on the model and battery size. This is less than a quarter of what your average car will do. When considering an EV, it all comes down to whether this is something your business can work around.

For a daily commute or traveling to the occasional business meeting, this is adequate for most people. However, if you’re looking to accommodate traveling salesmen, long distance trips or larger transporters traveling between jobs all day, electric vehicles aren’t really practical.

The short range of EV’s is made worse by the lack of charging stations situated around the UK. Again, these are only set to increase with time.


Unlike the almost instantaneous filling of a fossil fuel powered car, EV’s can take hours to fully charge and in business – time is money. However, more and more service stations, car parks and inner city parking spots now accommodate charging points for electric cars and this is only set to get more convenient.

The benefit is that you can use a basic mains outlet to charge an EV, therefore transforming your office or home into a convenient charging port. This is great for ensuring your entire fleet is fully charged and ready to go every morning, without having to drive to a charging station.


Whilst insurance is based on a plethora of different factors concerning both the driver and the car, it is possible to get lower insurance quotes on EV’s since they tend to be smaller and less powerful, and therefore are perceived as being safer.


Electric cars produce virtually no emissions, apart from what’s required to generate the energy that powers them. In terms of cost, emissions aren’t that important aside from making your car exempt from road Vehicle Excise Duty and the London Congestion Charge.

The biggest benefit of driving zero emissions vehicles is the dramatically lessened impact on the environment. Going green is something that many consumers value highly in a world of depleting fossil fuels and heightened awareness of climate change troubles.

Is it right for your business?

Electric Vehicles are still a relatively new product, with limited choice, growing pains with regards to charging points and a high initial price which can be off-putting to some businesses. However, the long-term savings can mean it makes financial sense to go electric.

Aside from financial considerations, the main driving factor for many businesses will be the fact that the environmental impact of running electric company vehicles is virtually nil. So if your business has an environmental aspect, you might feel that it’s important for your company to be leading the race for clean energy.

About the author

This guide has been written for ByteStart by Emma Gilroy, Brand Development Manager for, Direct365 who specialise in facilities management and vehicle leasing for businesses of all sizes across the country.

More help on ByteStart

ByteStart brings you help and advice on all aspects of starting and running a small business. Try some of these popular guides for starters;

Bytestart Limited

Comments are closed.