Labour Must Prioritize Long-Term Support for Electric Company Cars, Say Fleet Experts
Fleet experts have warned that Labour must prioritize long-term support for electric company cars in order to meet the EV sales targets set for this year. Currently, electric vehicles (EVs) benefit from an ultra-low 2% benefit-in-kind (BIK) tax band, which has contributed to 83% of new EVs being sold to businesses. Company cars have become a crucial sales channel for manufacturers, accounting for 62% of all registrations in July, as they face the UK’s zero-emission vehicle (ZEV) mandate, which requires 22% of total sales to be electric by 2024 or face fines.
Slow Progress in Fleet-Relevant Announcements
Despite promises of “policy certainty” for the automotive industry and plans to reinstate the 2030 ban on new non-hybrid cars, the new government has been slow to make fleet-relevant announcements. According to Toby Poston, director of corporate affairs at the British Vehicle Rental and Leasing Association (BVRLA), resolving the challenges faced by the sector should be a higher priority than shifting phase-out dates for internal combustion engine (ICE) vehicles.
Addressing the EV Demand Imbalance
The BVRLA’s Road to Zero Report Card highlights the stronger uptake of EVs in company car and salary sacrifice schemes compared to their share in the new car market. However, the demand for used EVs is slowing, affecting residual values and increasing monthly lease costs for fleets. Poston suggests that Labour should introduce a consumer communications campaign and extend the ZEV mandate’s shared mobility credits to daily rental operators to address the EV demand imbalance.
Long-Term Tax Visibility for Company Cars
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), emphasizes the need for long-term tax visibility for company cars. Currently, tax incentives for electric company cars are confirmed only until April 2028, and Hawes warns that fleets require long-term tax visibility to continue investing in EVs. He also suggests amending the Vehicle Excise Duty (VED) expensive car supplement to ensure that EVs are not classified as luxuries.
Infrastructure and Charging Accessibility
Dominic Phinn, head of transport at non-profit organization The Climate Group, highlights the need for charging infrastructure to support drivers without off-street parking. He suggests solutions such as pavement gullies that allow charging cables to cross pavements without causing obstruction. Additionally, making it easier to install charging points at commercial premises would further support the adoption of EVs.
By prioritizing long-term support for electric company cars and addressing the challenges faced by fleets, Labour can ensure the growth of EV sales and meet the targets set for a zero-emission future.
