FLEET GUIDE TO PLUG-IN VEHICLES

Transcription

1 FLEET GUIDE TO PLUG-IN VEHICLES

2 CONTENTS WELCOME From Andrew Jones MP INTRODUCTION An electric vehicle is for now, not just the future PLUG-IN GRANT EXPLAINED Government grant scheme extended into 2016 WHOLE LIFE COSTS Whole life costs, whole lot of savings TAX Electric cars: the answer to taxing questions CHARGING INFRASTRUCTURE Meeting the charging challenge FUEL COSTS Fuel for thought SMR Service, maintenance and little repair RESIDUAL VALUES Closing the gap THE MANUFACTURER VIEW Views and ideas on the future of mobility FLEET PLANNING Planning for an electric future DRIVER CASE STUDIES Practice what you preach LIGHT COMMERCIAL VEHICLES Electric vans: Good commercial sense ACFO Advice from the Association of Car Fleet Operators BVRLA Insight from the British Vehicle Rental and Leasing Association LOCAL AUTHORITY Tale of an ultra low emission city FURTHER INFOMATION Go Ultra Low online GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES EDITORIAL TEAM Editor Ben Wicks (SMMT) Deputy Editors James Parsons (PFPR); Ashley Martin Design GO ULTRA LOW TEAM Ben Wicks (SMMT) Poppy Welch (SMMT) Jonathan Mitchell (OLEV) David Murphy (DfT) Victoria Judd (DfT) For media enquiries contact James Parsons (PFPR): goultralow@pfpr.com; +44(0) GO ULTRA LOW WOULD LIKE TO THANK THE FOLLOWING PEOPLE FOR THEIR CONTRIBUTION TO THE GUIDE: John Pryor, Caroline Sandall (ACFO); Ian Hill (Activa Contracts); Jon Burdekin (Alphabet); David Bushnell (Alphabet); Glen Blythe (Art of Living); Monica Guise (Birmingham University); Andrew Garrad (Bristol 2015); Nina Skubala (Business West); Gerry Keaney (BVRLA); Dylan Setterfield (CAP Automotive); Mark Constable (EDF Energy); Simon Cook (GE Capital UK); Rupert Pontin (Glass s); Sam Clarke (Gnewt Cargo); Mark Jowsey (KeeResources); Chris Chandler (Lex Autolease); John Webb (Lex Autolease); Nick Faulkner (Ogilvie Fleet); Nick Hardy (Ogilvie Fleet); Paul Jackson (TMC); David Hosking (Tusker); Mark Sinclair (Tusker); Simon Staton (Venson Automotive Solutions); John Kendall. The information and data set out in this guide are for general information only, and though given in good faith, are given without any warranty as to their accuracy. Any views expressed in editorial are not necessarily endorsed by Go Ultra Low. All information correct at date of publication, October Welcome UK fleets are agents of change. Many of the innovations that have made cars greener, safer and more efficient in recent decades were pioneered by fleets, and today the corporate sector is spearheading the growth of the ultra low emission vehicle (ULEV) market. The UK is now the fastest growing market for electric vehicles in Europe. In the first six months of 2015, more electric cars were sold here than in the whole of and almost two thirds of those were acquired by fleets. More and more fleet managers are discovering that running electric vehicles no longer requires fundamental compromise whether it s on whole life costs, reliability, or popularity with drivers. As a government, we have demonstrated our long-term commitment to ultra low carbon motoring. We are investing 500m between 2015 and 2020 to support the plug-in vehicle grant, expand the charging infrastructure, and boost the electric car industry. Manufacturers have responded by expanding and improving the range of ULEVs on the market. There are now 27 cars, from luxury cars to city vehicles, and nine vans eligible for the Plug-in Car Grant, so fleets have real choice. But the challenge we face now is to accelerate sales. By 2020, we expect ULEVs to make up to 5% of new UK car registrations. By 2040, our aim is that all new cars sold in this country will have zero tailpipe emissions. And our ultimate goal is to make almost every car on the road ultra low emission by These are ambitious targets. But we can achieve them if government, industry and fleets continue to work in partnership through schemes like Go Ultra Low. I want to encourage more fleets to be bold and see the benefits that electric cars could bring. Green fleets don t just enjoy financial incentives and tax breaks. They also project a positive corporate image to the outside world. And employees love them. So I m delighted to recommend this guide and I hope it will help your fleet Go Ultra Low. Andrew Jones MP Parliamentary Under Secretary of State at Department for Transport 2 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 3

3 INTRODUCTION TO PLUG-IN VEHICLES AN ELECTRIC VEHICLE IS FOR NOW, NOT JUST THE FUTURE Cost management is an agenda-topping issue for operators so it makes sound commercial sense that an everexpanding range of ultra low emission vehicles (ULEVs) those that emit 75g/km CO 2 or less and have a plug-in element should be considered for operational use. What s more, fleets and small businesses are leading the charge for plug-in cars and vans as new vehicle registration figures have surged in Data from Go Ultra Low reveals that plug-in car registrations accelerated rapidly over the first nine months of 2015, growing 138.5% to 20,992 units against the same period last year. Mitsubishi leads the new registrations charge, with 9,303 of its flagship Outlander PHEV sold since the start of Nissan follows with its all-electric LEAF racking up 4,285 registrations while the BMW i3 is the nation s third most popular ULEV with 1,564 registrations. Transport Minister Andrew Jones said: Soaring demand across the UK shows that more and more people view ultra low emission vehicles as the right choice for them. Plug-in cars are green, cheap to run and benefit both businesses and families. The government is investing 500 million over the next five years to help position Britain as a world leader in the technology, supporting skilled jobs and driving economic growth. Meanwhile, demand for plug-in vans has increased 50% in the first nine months of 2015 with registrations totalling 661 units versus 441 last year. Almost all those light commercial vehicles are being operated by fleets and small businesses. Currently, 27 cars and nine vans either pure electric, range-extended or plug-in hybrid vehicles are categorised as ULEVs that meet the eligibility criteria for the government s plug-in grant. From city run-arounds and family hatchbacks, to 4x4s and sports cars, there is already a wide range of vehicles to meet corporate and employee demands, while the choice of vans embraces car derived, panel van and 4x4 models. Corporate choice will continue to increase further with an additional 40 models expected to come to the market over the next three years, according to the Department for Transport. Allied to fleet decision-makers searching for financial savings in their choices of company cars and vans is a desire to reduce their organisation s carbon footprint as a ON TRACK FROM CITY RUN-AROUNDS AND FAMILY HATCHBACKS, TO 4X4s AND SPORTS CARS, THERE IS ALREADY A WIDE RANGE OF VEHICLES TO MEET CORPORATE AND EMPLOYEE DEMANDS IN THE UK, MORE ELECTRIC CARS WERE SOLD DURING THE FIRST HALF OF 2015 THAN THE WHOLE OF 2014 policy of good corporate citizenship. ULEVs deliver on both counts making sound financial and environmental sense, while the variety of vehicles available ensures that the key fleet criteria of fitness for purpose is also met. Poppy Welch, head of Go Ultra Low, said: The balance of costs and benefits is unique to electric vehicles and therefore it is important that Go Ultra Low promotes the advantages of ownership and the financial savings they can deliver on operating budgets to fleet decision makers. Go Ultra Low exists to help motorists understand the benefits, cost savings and capabilities of the wide range of ULEVs on the market, aimed at boosting electric vehicle uptake as an alternative to petrol and diesel vehicles. ULEV TECHNOLOGY EXPLAINED ULEVs are available from a number of manufacturers, including Audi, BMW, Mitsubishi, Nissan, Renault, Toyota and Volkswagen. These seven have joined the Go Ultra Low campaign to encourage corporate and consumer demand of plug-in vehicles. There are three types of technology powering ULEVs, all offering different benefits to ensure companies can match fitness for purpose with business need: Pure electric: powered by a battery charged from mains electricity with a single charge range typically around 100 miles. Models available include the BMW i3, Nissan LEAF, Nissan e-nv200, Renault ZOE, Renault Kangoo Van ZE, Volkswagen e-golf and Volkswagen e-up!. Plug-in hybrid: matches a battery for short trips of miles with an economical petrol or diesel engine for longer journeys, giving a range of up to 700 miles. Models available include the Audi A3 Sportback e-tron, BMW i8, Mitsubishi Outlander PHEV, Toyota Prius Plug-in and Volkswagen Golf GTE. CHOICE OF CARS AND VANS CURRENTLY AVAILABLE FROM GO ULTRA LOW MANUFACTURERS 100% ELECTRIC (CARS) BMW i3 Nissan e-nv200 Nissan LEAF Renault ZOE Renault Twizy Volkswagen e-golf Volkswagen e-up! 100% ELECTRIC (VANS) Nissan e-nv200 Nissan e-nv200 Combi Renault Kangoo Van ZE PLUG-IN HYBRID CARS Audi A3 Sportback e-tron BMW i8 Mitsubishi Outlander PHEV Toyota Prius Plug-in Volkswagen Golf GTE PLUG-IN HYBRID VANS Mitsubishi Outlander PHEV 4Work RANGE-EXTENDED ELECTRIC VEHICLE BMW i3 Range extender vehicles: powered by a battery with an internal combustion generator on board, which charges the battery when it gets below 3%, can increase the range of the car from 100 miles up to around 180. The only model on the market that currently offers this is the BMW i3 Range Extender. 4 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 5

4 PLUG-IN CAR GRANT EXPLAINED GOVERNMENT GRANT EXTENDED INTO 2016 The government announced in August 2015 that it was committed to continuing to support demand for all plug-in cars with CO 2 emissions of 75g/km or less. The government s current plug-in car grant scheme will continue to offer businesses and consumers 35% off the cost of a car, up to 5,000, until at least February Additionally, the plug-in van grant that offers 20% off the price of a vehicle, up to a maximum of 8,000, remains in place. The government s decision to continue to offer financial support for the acquisition of plug-in vehicles has been unanimously welcomed by the motor industry and fleet industry organisations. The government had previously announced that the plug-in car grant would be reviewed once 50,000 vehicles had been sold. That milestone is expected to be reached in November 2015 as demand for plug-in vehicles continues to accelerate. Confirmation of plug-in grant availability into 2016 is anticipated to add an extra incentive to fleets as well as private buyers who are looking to go electric in 2015 and Market leader THE MITSUBISHI OUTLANDER PHEV IS THE UK S FAVOURITE PLUG-IN VEHICLE. THE NISSAN E-NV200 (BOTTOM RIGHT) IS ONE OF NINE VANS ELIGIBLE FOR PLUG-IN GRANTS. Further details about how the plug-in car grant will be structured beyond February next year are expected following the government Spending Review in November. Registrations of plug-in cars accelerated rapidly over the first six months of 2015, growing 256% against the same period last year and surpassing the 2014 full-year total with six months to spare. Transport Minister Andrew Jones said: I m pleased that the government is maintaining the current levels of grant, even as we move past the milestone of 50,000 vehicles. The UK is now the fastest growing market for electric vehicles in Europe. We will continue to invest to help make this technology affordable to everyone and to secure the UK s position as a global leader. Poppy Welch, head of Go Ultra Low, said: Continuing the plug-in car grant at current levels encourages zero-emission motoring and secures more funding for a greater number of ULEV buyers. The government is committed to supporting the growth of the ULEV market. If we are to meet ambitious targets for ULEV uptake, continued investment is paramount. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: With British buyers taking to ultra low emission vehicles faster than anyone else in Europe, the extension of the plug-in car grant is good news. The market for these vehicles remains small, however, so it is essential that government continues to provide effective incentives for their uptake - including the plug-in car grant and other measures. The Mitsubishi Outlander PHEV leads the market as the UK s favourite plug-in vehicle and the company says that the unquestionable success of the government s programme has been fundamental to the early and rapid growth of the ULEV sector. As a result, Mitsubishi says it is still too early to reduce or amend buyer incentives with managing director Lance Bradley commenting: THE MITSUBISHI OUTLANDER PHEV IS THE SAME PRICE AS ITS DIESEL EQUIVALENT, AFTER THE 5,000 GRANT HAS BEEN APPLIED We have seen ULEVs rapidly establish a 1% share of UK sales in a period of time unprecedented in automotive terms. We welcome the government s decision to continue these incentives in a way which recognises the fledgling nature of this low emissions market. Car manufacturers invest in new technologies on the basis of three to five year horizons for market introduction. Mitsubishi s view has also been endorsed by a recent report compiled for the Department for Transport. The Uptake of Ultra Low Emissions Vehicle in the UK: A Rapid Evidence Assessment for the Department for Transport concluded that there was insufficient evidence to date to draw any firm conclusions about the impacts of reducing or withdrawing incentives on electric vehicle uptake, and that withdrawing incentives when an electric vehicle market is still in the early stages of developing and price differentials between electric vehicles and internal combustion engines are still significant, is highly likely to have a negative effect on this development. Gerry Keaney, chief executive of the British Vehicle Rental and Leasing Association, said: It is great that the government has provided more certainty about the lifespan of this vital incentive and the lead time limit for qualifying vehicles to be delivered and registered. Support also came from John Pryor, chairman of ACFO, the leading UK representative body for fleet decision-makers, who said: Fleet decision-makers should assess the business benefits of the new breed of ultra low and zero emission vehicles against both the whole life cost and day-to-day operating criteria of their existing vehicles to see if there is a place for them within their transport operation. Finding the right use for the right vehicle is key in all fleet operations and that is no different with electric and plug-in hybrid models. The marketplace is changing so electric vehicles have to be a factor on fleet managers radar. Continuation of the plug-in-grant into 2016 helps them to determine the whole life cost position of applicable models versus current choices. Presently there are 27 cars and nine vans eligible for plug-in grants. The cost of the plug-in vehicle is the full purchase price paid for the basic vehicle - including number plates, Vehicle Excise Duty (VED) and VAT. It doesn t include any optional extras, e.g. delivery charges or first registration fee. 6 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 7

5 WHOLE LIFE COSTS WHOLE LIFE COSTS, WHOLE LOT OF SAVINGS Hundreds and possibly thousands of businesses are potentially wasting money because they are failing to use whole life costs as the basis for company car selection, according to experts. Fleet best practice dictates that vehicle operating choice decisions should be based on whole life costs because they provide the best forward estimate of the real costs to an organisation, in delivering business mileage, over a replacement cycle. Never has that been more important than in respect of ULEVs where, despite their higher P11D values, electric cars are cheaper to operate than petrol or diesel rivals. Whole life costs reflect all the projected, vehicle-specific costs associated with operating a vehicle over its fleet life irrespective of whether a vehicle is owned or leased (see panel). Yet many fleet decision-makers base their vehicle selection decisions on list price, P11D value or a headline monthly lease rate and not on whole life costs. Chris Chandler, principal consultant at Lex Autolease, the UK s largest vehicle leasing and fleet management company with a fleet of more than 300,000 vehicles including more than 2,000 ULEVs, said: It is important that fleets look beyond the initial list price of the vehicle. Plug-in vehicles benefit from government grants, tax breaks and have significantly cheaper fuel costs, all of which help to reduce the total cost of ownership. In addition, these vehicles provide notable environmental benefits as they produce substantially lower CO 2 emissions. WHOLE LIFE COSTS DEFINED Whole life costs should include: Vehicle acquisition/ depreciation or if leasing, the effective lease rental capital allowances any VAT recovery corporation tax relief the cost of borrowing money fuel Finding the right operation for the right vehicle is key in all fleet operations and that is no different with ULEVs. Mr Chandler added: In the right circumstance, where the right vehicle is used the whole life cost can be less than their petrol or diesel equivalent. David Bushnell, emobility consultant at vehicle leasing and fleet management company Alphabet, which launched AlphaElectric in a bid to encourage corporate demand for plug-in vehicles and has more than 1,000 ULEVs on its fleet, said: Over the past year we ve started to see a shift in attitudes towards electric vehicles. Once considered unfashionable and expensive, they have now found their place among corporate fleets. Traditional barriers to adoption are being removed and electric vehicles are becoming increasingly viable options for businesses. Many organisations wrongly assume that electric vehicles are unaffordable, won t provide the desired range for their business requirements, or aren t supported by enough charging infrastructure. Yet if they took the time to look into them in more detail, they would realise that introducing models is actually a lot less risky than first assumed. The typical working range of a pure electric vehicle on a full charge is around 75 miles, which is more than adequate for most business journeys. Meanwhile, GE Capital, Fleet Services Company Van Trends research recently suggested an increased adoption of ULEVs over the next two years - a total of 34% of fleets said they planned to operate more electric vans. Simon Cook, fleet LCV leader at GE Capital UK, said: More and more fleets are taking an interest in a wide range of alternative fuels and are keen to try them out in an operational sense to see which work for them and in which applications. Whole life cost figures from Lex Autolease illustrate how the higher P11D value of plug-in vehicles is FLEETS CAN SAVE MORE THAN 5,000 PER VEHICLE OVER A FOUR YEAR PERIOD BY GOING ELECTRIC Trend setting ONCE CONSIDERED UNFASHIONABLE AND EXPENSIVE, ULEVs HAVE NOW FOUND THEIR PLACE AMONG CORPORATE FLEETS more than offset by significant fuel savings, an estimated 20-40% reduction in SMR costs and tax benefits. SMR savings accrue because there are fewer moving or wearing parts in an electric car that will require maintenance than in petrol or diesel equivalents. Consequently, vehicle servicing costs will be lower. The data reveals that, for example, running a BMW i3 over four years/60,000 miles will deliver a potential saving of 58 a month over rival models (see table) or 2,784 over a four-year operating cycle. Multiply that by a fleet of just 10 cars and the savings escalate to almost 28,000 over four years. Similarly with the Nissan LEAF Acenta the monthly savings over a Ford Focus 1.5 EcoBoost Zetec S are an impressive 105 a month. That equates to more than 5,000 over a four-year operating cycle and 50,400 on a fleet of only 10 cars. Whole life cost data for range extender and plug-in hybrid models are more difficult to calculate because maximum savings are delivered in electric mode. The figures below assume 60% electric mode usage and a 15% weighting is attached to official MPG for real-world motoring. employer Class 1A national insurance contributions EXAMPLE WHOLE LIFE COST DATA EXAMPLE MODEL P11D VALUE MPG COMB CO 2 G/KM MONTHLY FUEL COST 2015/16 WHOLE LIFE COST service, maintenance and repair VED insurance Whole life savings RUNNING A BMW i3 OVER FOUR YEARS/60,000 MILES WILL DELIVER A POTENTIAL SAVING OF 58 A MONTH OVER RIVAL MODELS (SEE OPPOSITE) BMW i3 hatch 5dr auto 30,925 N/A BMW 116d SE 5dr auto 23, Audi A3 2.0 TDI SE 3dr 22, BMW 118i SE 5dr auto 22, Nissan LEAF Acenta 5dr auto 28,535 N/A Ford Focus 1.5 TDCi 120 Zetec S auto 21, Ford Focus 1.5 EcoBoost Zetec S 5dr 21, Volkswagen Golf 1.6 TDI BlueMotion 5dr 22, BMW i3 hatch Range Extender 5dr auto 34, BMW 120d Sport 5dr step auto 26, BMW 118i M Sport 5dr Nav 23, All whole life costs based on four years/60,000-mile with maintenance contracts. Fuel costs based on manufacturers official combined cycle MPG and UK average pump prices at April p per mile has been used as the fuel cost for electric vehicles. All whole life costs included plug-in grant where applicable. Source: Lex Autolease 8 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 9

6 WHOLE LIFE COSTS CASE STUDY INTERSERVE PROFESSIONAL FLEET EXPERTISE IS KEY TO UTILISING WHOLE LIFE COSTS Many organisations do not employ full-time professional fleet managers, particularly in the SME sector, to manage their company car operations. The trend for organisations to outsource fleet responsibility to a third party and leave management of the contract with perhaps the HR or finance department is highlighted by ACFO as one of the reasons why whole life costs are ignored by many companies. A further reason is the complexity around sourcing all the required data, but many leasing companies actively promote the use of whole life costs. Switching to whole life costs as the basis for company car choice can frequently enable employers to offer staff a more attractive car than perhaps they may have previously been entitled to have. Utilisation of whole life costs was a major topic at a 2015 ACFO seminar where deputy chairman and fleet manager Caroline Sandall said: The fact that many businesses don t use them is a symptom of lacking internal fleet management knowledge, particularly in SME fleets. Whole life costs should be embedded in every company, but it is not because it is not known or understood in many cases. That is why it is important that companies have a level of internal fleet expertise. But, she continued: Whole life cost management offers space to be flexible and should be adapted to the needs of individual fleets. Businesses should consider how they can refine their current company car choice model and implement improvements. Underlining that data capture was critical to fleet cost management, Ms Sandall said: Businesses cannot achieve a whole life cost management structure unless they have effective data which comes from many sources including internally and suppliers. It is critical to capture all income and expenditure to create a baseline position. Mike Brazel, specialist consultant (funding and taxation), LeasePlan, added: Many businesses struggle to capture all their costs in one place. But it is critical to measure, monitor and manage what is really happening. Whole life cost management is a continual process of review, and using them will deliver benefits to employees and the business. Using whole life costs as the basis for vehicle selection is eminently doable, but there must be a desire to do it. Ms Sandall, who has more than 20 years' fleet management experience, continued: Whole life costs management doesn t have to be complicated. Businesses can take a step transition to get a Whole life costs should be embedded in every company, but it is not because it is not known or understood in many cases. That is why it is important that companies have a level of internal fleet expertise CAROLINE SANDALL FLEET MANAGER baseline and start building up data that may be required. Treat whole life costs as a menu because you can t always start with perfection. One of the biggest issues with whole life cost modelling is shifting costs - residual values, purchase price discounts, funding costs and interest rates and insurance, as well as supply chain changes and legislation - therefore businesses should ensure they monitor and look for change and try to predict the future. Ogilvie Fleet has promoted the use of Ogilvie True Cost (OTC) - its own interpretation of whole life costs incorporating all known vehicle expenditure - as the basis for company car choice lists for a number of years. Nick Hardy, sales and marketing director of Ogilvie Fleet, said it was vital that fleet managers kept all vehicle options open and using Employee choice AN INCREASING NUMBER OF BUSINESSES HAVE A RELATIVELY OPEN FLEET POLICY AND ARE MINDFUL OF THE DIFFERENT ENGINE TECHNOLOGIES AND FUEL TYPES AVAILABLE whole life costs was the straightforward mechanism for doing so to easily identify the optimum choice. For many years diesel has been the fuel of choice for fleets. But now with the ever-growing ULEV choice, Mr Hardy, who has a plug-in hybrid as his own company car, said: Fleets should not be restrictive in their vehicle choice by self-imposed limitations. Fleet operators should be open to alternative power sources there is no need to be fearful of new technologies. We are finding that an increasing number of businesses have a relatively open fleet policy and are mindful of the different engine technologies and fuel types available, said Mr Hardy. Data capture and analysis is critical WHOLE LIFE in identifying the potential for COSTS DEFINED companies to introduce plug-in vehicles, according to Alphabet. The vehicle leasing and fleet management company, which now brands itself as a mobility provider, claims to have introduced a concrete way to help clients meet their individual mobility needs and achieve targets such as lower CO 2 emissions or cost-savings: the Electrification Potential Analysis (EPA). The analysis, developed as part of Alphabet s consulting approach, precisely identifies how businesses can optimally integrate electric vehicles into existing fleets. Among the first companies to make use of the service was Interserve, one of the world s foremost support services and construction companies. To identify whether electric vehicles could reduce Interserve s total cost of mobility, Alphabet tracked 24 vehicles in their fleet over a 33-day period. The usage patterns, which included drivers routes along with the distance, speed, acceleration, stops and parking, was measured via temporary in-vehicle trackers. The information gathered revealed the total fleet energy consumption and CO 2 emissions. Alphabet then used the data to build a precise fleet-driving profile, which served as the basis for the proposed solution. The data reported that the vehicles covered more than 35,000 miles in various regions of the UK. For just over 88% of the time, journeys were of less than 62 miles, the range considered suitable for most battery electric vehicles, according to Alphabet. The EPA identified remarkable cost saving potential for Interserve, if it was to integrate electric vehicles into the fleet. Based on the data collected, Alphabet proposed two possible solutions - basic and advanced - each of which reduced the total cost of mobility and CO 2 emissions by different amounts. The basic option, in which six electric vehicles would replace the 24 fleet vehicles, simulated cost savings of 9.2% per month and a 19.6% cut in CO 2 emissions. The advanced option, in which nine electric vehicles would replace current fleet vehicles and six charging stations would be integrated, showed a total cost of mobility saving of 15.5% per month and a 27.8% cut in emissions. In the end, Interserve decided to introduce almost 20 plug-in and plug-in hybrid cars. Jas Dhanda, fleet manager construction, Interserve, said: We strive to keep our fleet on the cutting edge and our costs in check. The EPA provided us with an optimised and realistic proposal for achieving that. The fact that it shows ways to reduce our carbon footprint is a welcome bonus. Carsten Kwirandt, head of marketing and business development at Alphabet International, said: In today s competitive environment, it s understandable that Interserve is looking to save costs. EPA identifies realistic ways to efficiently integrate electric vehicles into fleets. It really takes into account all details a company needs to take the right decision. Our objective is to bring comprehensive, forward-thinking emobility to our clients in a way that s in line with their targets, be it reducing CO 2 emissions or decreasing total cost of mobility. 10 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 11

7 TAX ELECTRIC CARS: THE ANSWER TO TAXING QUESTIONS The motoring tax regime is designed to favour the take-up of ULEVs with government grants furthering the incentives for corporate customers. Additional funding is available to help with the purchase of vehicles and installation of recharging points, meaning there is a solid business case for introducing such cars and vans to fleet operations. The London Congestion Charge and the Low Emission Zone ringing the capital also favour the cleanest vehicles, while many local authorities offer free parking for plug-in cars and vans with more initiatives set to follow. Add into the financial equation fuel costs, where along with company car benefit-in-kind (BIK) tax the biggest savings are achievable, and switching to ULEVs starts to make real sense. In addition, with the planned 2020 introduction of an Ultra Low Emission Zone mirroring the Congestion Charge zone in the heart of the capital, regulations are increasingly driving fleets down the ULEV route. Five low emission zones operate in England, and 15 local authorities have been allocated government funding to develop similar zones. The business case for introducing ULEVs is further supported by the requirement of companies - employing 250 or more people in the UK or with an annual turnover exceeding 50 TABLE 1 CO 2 (g/km) million and a balance sheet exceeding 43 million - to complete energy audits, including fuel used by company cars and vans and privately-owned vehicles driven on business trips. The first audit reports under the Energy Savings Opportunity Scheme (ESOS) are due later this year. Furthermore, approximately 1,800 companies listed on the London Stock Exchange and local authorities must report their greenhouse gas emissions, which includes emissions from cars and vans owned or controlled by organisations. Embracing ULEVs is one way that businesses can drive down energy consumption and display their green credentials to customers, suppliers and shareholders. The financial savings available are backed by industry experts that have experience of driving ULEVs. Steve Jackson, chief car editor at vehicle information Glass s told 2015/16 % of P11D price 2016/17 % of P11D price 2017/18 % of P11D price BusinessCar s Guide to Introducing Ultra-Low Emission Vehicles produced in association with Go Ultra Low: The cost saving in terms of fuel is staggering if you switch to a ULEV. There are some cars now that, because they are plug-in, get the equivalent of 235mpg. The tax saving for business drivers is obvious, but there s also the surprise saving of parking. I recently saved about 8 because I was in a plug-in car and recharging. Yes, I had to pay for the electricity, but I didn t have to pay for a day s parking. It s an unexpected bonus. Drivers should also consider what the savings and the vehicles can do for their lifestyle, according to Paul Marchment, fleet consultant at vehicle leasing and fleet management company Arval. As well as tax, fuel and congestion charge savings you also need to add lifestyle. When I 2018/19 % of P11D price 2019/20 % of P11D price TABLE 2 P11D value 2015/16 20%/40% 2016/17 20%/40% 2017/18 20%/40% 2018/19 20%/40% 2019/20 20%/40% i3 30, / / / 1, / 1, / 1979 C200 30,925 1,113/ 2,227 1,051/ 2,103 1,175/ 2,350 1,298/ 2,598 1,484/ 2,969 TABLE 3 Saving 804/ 1, / 1, / 1, / / 990 P11D value 2015/ / / / /20 i3 30, C200 30, ,024 Saving switched to a ULEV I saved enough for my wife to go part-time and look after our child, he said. Drivers need to do the sums, particularly if they re doing higher private mileage and have to rely on petrol to get a better range, but for perk drivers it s an obvious choice. SAVINGS IN COMPANY CAR BIK TAX AND CLASS 1A NATIONAL INSURANCE Company car benefit-in-kind (BIK) tax rates are known until the end of 2019/20 - which enables businesses to plan their vehicle choice lists and calculate the financial cost to themselves and employees. Like BIK tax, employers Class 1A national insurance contributions (NIC), charged at the rate of 13.8%, are linked to a car s P11D value and CO 2 emission figure. Therefore, the lower a car s CO 2 emissions the lower the NIC charge. Table 1 (left) highlights BIK tax rates on ULEVs to 2019/20 and the rates for a car in the g/km bracket. For tax year 2015/16 add 3% for diesel cars up to a maximum of 37% From 2016/17 petrol and diesel cars are treated equally for company car tax purposes. So, comparing a zero emission BMW i3 ( 30,980 on the road) with an identically priced 101 g/km Mercedes-Benz C200 BlueTEC Sport 4dr six-speed manual ( 30,980), see table 2 reveals the tax benefits for lower (20%) and higher (40%) rate drivers and the Class 1A NIC savings for employers over five years. Over the five-year period, company car drivers will pay a total of 3, less in BIK tax on the BMW i3 if a lower rate taxpayer and 6, if a higher rate taxpayer. For employers, the Class 1A NIC costs and savings over the five-year period are shown in table 3. It means that over the five-year period businesses will save themselves a total of 2, by choosing the BMW i3. On a fleet of just 10 models that equates to a saving of almost 21,000. OVER A FIVE YEAR-PERIOD, COMPANY CAR DRIVERS CAN SAVE THEMSELVES 6,000 IN BIK TAX BY CHOOSING AN ULEV Nissan LEAF EMISSIONS FREE, ULTRA LOW TAXES EXAMPLE OF CAPITAL ALLOWANCE BENEFITS MODEL: Nissan LEAF Visia PRICE: 22, CO 2 EMISSIONS: 0g/km WRITING DOWN ALLOWANCE: 100% CORPORATION TAX 2015/16: 20% TAX RELIEF: 22, x 100% x 20% = 4, Tax written down value carried forward = nil VAN BIK TAX CHARGE Full BIK tax exemption status of electric vans ended in 2015/16, but there are still tax savings to be gained when compared with petrol and diesel powered models. BIK tax on electric vans is being phased in - 20% of the rate paid by conventionally-fuelled vans in 2015/16, followed by 40% in 2016/17, 60% in 2017/18, 80% in 2018/19 and 90% in 2019/20, with rates equalised in 2020/21 when a single benefit charge applying to all vans is planned. The van BIK tax charge in 2015/16 for petrol and diesel models is a flat rate 3,150; 630 for electric vans. Employers pay NIC on the benefit. Electric van BIK tax charge 2015/16 (20%/40%) taxpayer: 126/ 252. NIC charge: Petrol/diesel van BIK tax charge 2015/16 (20%/40%) taxpayer: 630/ 1,260. NIC charge: Therefore, drivers will save 504/ 1,008 in tax on a plug-in van. Employers will save in NIC per plug-in vehicle, which on a fleet of just 10 vans delivers a cash saving of almost 3,500. MODEL: Vauxhall Insignia 2.0 CDTi 120 Sri VX-Line 5dr PRICE: 22,104 CO 2 EMISSIONS: 99g/km WRITING DOWN ALLOWANCE: 18% CORPORATION TAX 2015/16: 20% TAX RELIEF: 22,104 x 18% x 20% = Tax written down value carried forward = 18, VEHICLE EXCISE DUTY Presently ULEVs are exempt from paying Vehicle Excise Duty (VED) and all cars and vans that emit less than 100g/km of CO 2 are zero rated for road tax, delivering additional cash savings to companies. However, the VED regime for cars will change from 1 st April, 2017, Chancellor of the Exchequer George Osborne announced in the 2015 Summer Budget. Nevertheless, the changes still encourage take-up of ULEVs. Mr Osborne said: The reformed VED system retains and strengthens the CO 2 -based first year rates to incentivise uptake of the very cleanest cars. The first year VED rate and the standard rate for ULEVs is shown below: NEW VED SYSTEM FOR CARS REGISTERED FROM 2017 EMISSIONS (g/km) OF CO 2 FIRST YEAR RATE STANDARD RATE* * Cars above 40,000 pay a 310 supplement for five years CAPITAL ALLOWANCES Capital allowances allow companies to write down the cost of purchasing cars and vans against taxable profits. To encourage the take-up of ULEVs, cars and vans with CO 2 emissions of 75g/km or less are eligible for 100% first year capital allowances to 31 March, 2018 thereby giving companies cash flow benefits. However, in respect to zero-emission vans, this benefit is limited to businesses that do not claim the government s Plug-in Van Grant. In contrast, on cars with emissions of g/km and above 130g/km companies can write down 18% and 8%, respectively, of the cost of a car against their taxable profits each year, on a reducing balance basis. Business expenditure on vans (ex-vat) that are not zero-emission qualify for tax relief as capital allowances at the rate of 18% a year on a reducing balance basis. 12 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 13

8 TAX CASE STUDY THE ART OF LIVING GROUP ULEVs AS A SALARY SACRIFICE CAR SCHEME OPTION Salary sacrifice car schemes are growing in popularity for employees with no entitlement to a company car or a cash alternative. What s more, some employers are introducing the salary sacrifice option in place of company car schemes. David Hosking, chief executive of Tusker, currently managing 200 schemes, explains why ULEVs are a particularly attractive salary sacrifice option. ULEVs work extremely well as salary sacrifice cars. Salary sacrifice works by eligible employees sacrificing part of their salary in exchange for a company car. Savings are generated because the employee is no longer liable for income tax on the proportion of salary they sacrifice. Instead, they are liable for BIK tax on the company car. As BIK tax works on a sliding scale based on the CO 2 emissions of each vehicle, ULEVs attract the very lowest tax liability of just 5%. When Tusker s purchasing power on the vehicle, maintenance and insurance are also factored in, along with the savings on fuel, drivers can save many hundreds of pounds every year. Due to salary sacrifice car schemes increasing popularity, boosted by government policy which keeps related taxes very low, manufacturers have responded with an ever-expanding range of low emission models to meet all needs and pockets; from city run-arounds and family hatchbacks, to 4x4s and sports cars. It is no surprise then that nearly half of all cars ordered through Tusker s SalarySacrifice4Cars scheme emit less than 100g/km CO 2. The most popular ULEV on Tusker s fleet, accounting for over half of total orders, is the versatile Mitsubishi Outlander PHEV which appeals to drivers looking for a bigger family car. Tusker has been at the forefront of promoting ULEVs for several years. All four executive board directors at Tusker drive ULEVs and the company has installed four chargepoints at its headquarters for employees and visitors to use. Electric cars are now available to all company car drivers at all grades and to non-car eligible staff on Tusker s own salary sacrifice scheme. Tusker works hard to promote the benefits of ULEVs to its customers, and has developed a dedicated microsite packed with information to educate customers on these low emission vehicles, including dispelling common myths, tools to assist in determining if it s right for an Choosing the right ULEV for each individual driver is critical to their success. DAVID HOSKING TUSKER Recharging ULEVs WORK EXTREMELY WELL AS SALARY SACRIFICE CARS individual, cost and CO 2 comparison tools, an educational video, a frequently asked questions section and charging information. Employers also have a role to play. Installing chargepoints in the office car park is essential to encourage employees to adopt ULEVs and drive down the company s carbon footprint. Choosing the right ULEV for each individual driver is critical to their success. Different types of low emission vehicles work best under different sets of circumstances. Drivers do need to do some research when first looking into these vehicles and fully understand their journey profile. An electric car with range extender works well for someone with a fairly long but predictable commute, while anyone mostly doing short, local journeys will find a fully electric car is ideal. The combination of the petrol hybrid electric vehicle is often a good compromise as it offers electric driving for short journeys with the compromise of a petrol engine to reduce perceived range anxiety for longer journeys. If a ULEV does not work for a particular company car driver, because they typically drive a very high daily mileage with little opportunity for recharging, drivers could look into obtaining a ULEV as a second car on salary sacrifice. Conversely, for a family requiring a conventional car at weekends, a ULEV may be ideal just as a car for the regular daily commute. With salary sacrifice, there are no tax limits on the number of cars employees can have, therefore salary sacrifice is an ideal opportunity for someone to drive a ULEV as their first or second car. The scheme gives drivers flexibility to adapt their car to their journey profile. INTERIOR FITTINGS EXPERTS ART OF LIVING HAS CUT ITS FUEL BILL IN HALF SINCE INTRODUCING FIVE MITSUBISHI OUTLANDER PHEVS TO ITS 15-STRONG FLEET Introducing five Mitsubishi Outlander PHEVs to The Art of Living Group s company car fleet is paying financial dividends for the employees as well as the organisation. Drivers are each saving thousands of pounds in company car BIK tax and the company calculates that it has cut its fuel bill by as much as 50%. The successful interior fittings company is also making savings in Class 1A National Insurance contributions and, having purchased the plug-in cars, is benefiting from 100% capital allowances. Two of the cars are also London Congestion Charge registered so are exempted from the daily charge when driven into the zone. Glen Blythe, a director of the family-owned, Camberley-based company, said: Our attention was drawn to an advert in a motoring magazine and I investigated. From both a financial and environment perspective it was a no-brainer. The company traded in five diesel SUVs for the Outlanders a year ago and Mr Blythe, explaining that the tax saving was the equivalent of a pay rise, said: I m now paying 14 a week in BIK tax and I was paying 50 a week. That s brilliant. The financial savings are even greater for Mr Blythe s father, Clive, managing director, who has seen his annual BIK tax reduce from around 10,000 to below 1,000. Mr Blythe s brothers and fellow directors, Dean and Craig, are also making significant savings alongside warehouse manager Phil Johnson. Three of the men have had chargepoints installed at home - the property configuration means the other two employees have not - and two points have been installed at the company s headquarters, one of which is available free of charge to customers. Employees are also equipped with an Ecotricity Electric Highway swipe card to allow them to recharge at other locations. Mr Blythe calculates he achieves around 30 miles on electricity when the battery is fully charged and more than 600 miles on a tank of petrol. He explained: We re very eco-minded and always looking for ways to reduce our carbon footprint. I live five miles from the office and charge the cars every two days. If I have a longer journey the petrol engine kicks in. From filling up every week I m now refuelling every five or six weeks. We run the cars as frequently as possible on electricity as that is where we gain the maximum financial benefits in terms of fuel cost savings. The Art of Living Group operates a 15-strong fleet of cars and vans and Mr Blythe anticipates introducing more ULEVs to the fleet in the future. He concluded: The cars will more than pay for themselves over three years saving the business and drivers thousands of pounds in tax and fuel costs. Other businesses should go down this route. I firmly believe ULEVs will increase in popularity as more business take advantage of the cost savings; you cannot ignore them. 14 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 15

9 CHARGING INFRASTRUCTURE MEETING THE CHARGING CHALLENGE Finding somewhere to charge your electric car has never been easier, thanks to home and workplace recharging, and a rapidly growing network of public chargepoints. The national network of vehicle recharging points is growing rapidly to the extent that the number of publicly accessible points will soon overtake the number of fuel stations in the UK. Add in to the mix the number of workplace and home recharging points and there are already thousands more locations where vehicles can be plugged in than there are forecourts, of which there are almost 8,500. Recent analysis by Go Ultra Low confirms that motorists no longer Going places MOTORISTS DRIVING BEYOND THEIR VEHICLE S RANGE CAN MAKE USE OF THE MORE THAN 9,000 PUBLIC CHARGEPOINTS have to rely on the conventional petrol or diesel fuel pump. They found that more than 90% of electric vehicle recharging takes place at home, according to data from leading infrastructure provider Chargemaster. Concern around the accessibility of the UK s recharging infrastructure is frequently cited by drivers in surveys as one of their key issues in electric vehicle decision-making. But, the reality suggests that such concerns are misplaced. The average UK commute is less than 10 miles and the majority of plug-in car and van drivers are able to charge their vehicles entirely at home or work, only occasionally using public chargepoints as a back-up or additional top-up for longer journeys. As well as only commuting short distances, more than a third of UK motorists never travel more than 80 miles in a single trip, comfortably within the 100-mile range of most pure electric vehicles. For those who regularly need to travel further or don t have a driveway for home-charging, some plug-in hybrids can travel around 700 miles without needing to refuel. Furthermore, motorists driving beyond their vehicle s range can make use of the more than 9,000 public chargepoints nationwide - a network that is set to grow significantly. Poppy Welch, head of Go Ultra Low, suggests that fleet decisionmakers and company car and van drivers should consider updating their approach to plug-in vehicles. She said: The reasoning is simple - drivers do not have to go out of their way, regularly spending time at petrol stations, when it is easy to refuel from the comfort of their own home, simply by plugging in an electric vehicle. Electric vehicle sceptics sometimes question the usability of the UK s roadside charging infrastructure, but this data indicates that it is an important, but not critical, facility for most electric vehicle owners. RECHARGING YOUR BATTERY Chargepoints are categorised by the power they produce. It s measured in kilowatts (kw), and the higher the number, the faster a vehicle s battery will be recharged. Most networks offer a mix of rapid (43kW-50kW), fast (7kW- 22kW) and standard (up to 3kW) charging options: Rapid - will get a battery from flat to 80% charged in less than 30 minutes. They are generally installed at motorway service stations enabling 100% electric vehicles to travel across the country, as well as retail outlets and other locations. Fast - can fill up a battery in two to four hours and can be installed in public locations. Standard - generally what would be used at work and home and also in car parks and other destination locations like supermarkets and cinemas. Usually takes more than eight hours to charge a battery fully, but suitable for a top up charge. Charging involves attaching an electric cable between the car and the socket. Standard charging uses the universal three-pin plug. Most plug-in vehicles on sale today use J1772 or Type 2 connectors for fast charging, with different options available for rapid charging. The vast majority of residential, business and public chargepoints available today are fast-chargers. They use AC current and take 3 4 hours. Customers are advised to talk to a chargepoint supplier about the differences, as the configuration of the chargepoint required will depend on the electric vehicle chosen. PUBLIC RECHARGING POINTS There are already more than 9,000 publicly accessible chargepoints across the UK - many provided by government investment and others by private organisations. On a daily basis, more chargepoints are opening in public car parks, shopping centres, railway stations, hospitals and other locations with the government having pledged 38 million to further expand the UK s recharging infrastructure. The investment includes the installation of 500 rapid chargers in key locations, such as motorway service stations, by the end of 2015 giving the UK the best network in Europe. Chargemaster is the largest operator of electric vehicle chargepoints in the UK and earlier this year announced a major increase in its POLAR chargepoint network that will take its network to around 7,000 locations. David Martell, chief executive of Chargemaster, said: Chargemaster is committed to making electric vehicles a viable option to people across the UK. By growing our network nationwide, but also focusing on traditionally poor areas of service, we are confident we will make a marked difference for electric vehicle owners wanting to charge on the move. Chargepoints funded by the government operate on a pay-asyou-go basis or, in some cases, are free to use. Other chargepoints are typically operated by membership schemes with access to the network usually at low cost or free. A chargepoint location map is available on goultralow.com. MORE THAN A THIRD OF UK MOTORISTS NEVER TRAVEL MORE THAN 80 MILES IN A SINGLE TRIP, COMFORTABLY WITHIN THE 100-MILE RANGE OF MOST PURE ELECTRIC VEHICLES HOME RECHARGING Government incentives mean a dedicated home recharging point can be installed at little or no cost. The government has pledged a further 15 million to 2020 to continue the Electric Vehicle Homecharge Scheme giving ULEV drivers a 75% grant of up to 700 towards installation. Some vehicle manufacturers, energy companies and chargepoint suppliers will also pay the additional 25%, making the entire installation process absolutely free. Typically, it is the responsibility of employees to arrange fitment of the recharging unit and pay any outstanding cost following deduction of the grant. Employers generally take the view that employees will achieve BIK tax and fuel cost savings as a consequence of choosing a ULEV so they should not be put off by any recharging unit cost. Additionally, asking an employee to fund any further recharging unit cost indicates a commitment from them to support a corporate move to carbon footprint reduction and also safeguards employers from losing out in the event of an employee moving. However, other employers could decide to remove any barrier to employees choosing a ULEV and opt to fund any additional recharging unit cost. Such a move would incur a BIK tax charge at an employee s marginal rate. Ideally, the recharging point should be installed in a garage or on a driveway. A range of homecharging hardware, both floor and wall-mounted, is available to cater for multiple users and vehicle types. However, if neither a garage or driveway option is available, a similar grant is offered to local authorities to have residential on-street chargepoints installed. For safe and faster home charging it is recommended that a weather proof, tethered wallbox is installed on a dedicated electrical circuit, and an earth stake is fitted if necessary. The cost of recharging can be from as little as 1 depending on the electricity supplier s tariff. 16 GO ULTRA LOW FLEET GUIDE TO PLUG-IN VEHICLES 17