Coach, Commercial, Minibus/Coach Finance, News

A Review of the Electric Vehicle Market – The Rise of the EV

Back in June 2019 we reported on the increasing popularity of electric and hybrid vehicles, with predictions that by 2040, electric vehicles will dominate the transport market.

 

With a combination of both environmental and cost benefits, EVs remain a growing trend and we’re seeing more and more companies exploring these options when looking to finance a new vehicle, from commercial vans to private hire, minibus and coaches.

 

We now have much more knowledge of the EV industry than we did a few years ago, with finance and insurance options becoming more easily accessible and our knowledge of finance viability increasing.

 

We’ve seen several large corporations pledge to ‘Go Green’ with their fleets, with companies such as Ford and Amazon pledging to embrace electric vehicles. Ford is releasing it’s all electric Ford E Transit for trial in various European markets this year, with the vehicle being available on mass next year.

 

Amazon have recently rolled out 20 electric delivery vans in Exeter as part of their pledge to be net zero carbon by 2040. This has allowed independent logistics companies who work with Amazon to benefit from access to these vehicles and doing their bit for the environment.

 

2020 was a record year for sales of both battery and plug-in hybrid vehicles, making up 1 in 10 vehicle registrations during 2020, compared to 1 in 30 during 2019, all despite an overall 30% decrease in new car sales following the impact of the pandemic.

 

During the last year, our buying habits have certainly changed, and we’ve seen trends in purchasing emerging such as an increase in demand for Motor Homes and a more conscious thought to our environment and lifestyles.

 

We once again spoke with Neil Cadd of Chadderton Motor Company to gain an update on his perspective of the direction of the EV industry.

 

“In the space of a few short months and whilst we have been under the COVID cloud, the EV world has perhaps come to the forefront of people’s thoughts perhaps a little sooner than would have been expected.

 

Many manufacturers are now releasing details of their EV products that we will see on the roads by the end of 2021 and many courier and delivery companies are taking this on board as they know they need to be seen using environmentally friendly vehicles and perhaps have a slightly different agenda from the local shopkeeper or tradesman when it comes to operating this type of vehicle.

 

The suitability of putting an EV on to your fleet isn’t for everyone, with the current payload and range issues mean that there isn’t an EV for every job and if that is the case then so be it but there will be in time.

 

The more ultra-low emission zones that are announced by towns and cities around the country will mean that businesses have to make the switch to EV but on the flip side running an EV in these areas will prove to be a cost saving over a traditional petrol or diesel vehicle, as is the case in London.

What we ask our customers and potential customers to sit and fully consider all the options when looking at an EV and to look further than the capital cost which can prove to be off putting especially with the larger vehicles. Whole life costs must be taken into account such as road fund licence, maintenance costs, fuel comparisons, grants, downtime when being serviced, congestion charges, residual values all need to be considered when thinking of making the switch.

 

One of, if not the biggest objection that comes from customers is range anxiety, however, this is in many cases a fallacy one customer of ours found his van “which he was out in all day” covered on average less than 80 miles a day so no need to be anxious about it and with over 450 charge points per month opening around the country this really isn’t an issue.

 

Finance companies are now coming to terms with these vehicles and more are offering options to customers through hire purchase, lease and contract hire schemes making them a sound choice once the prospective owner has done their homework properly, analysed their daily usage, and compared costs to realise that it would work for them but as I said before it isn’t for everyone…… yet!”

 

Our future has been front of mind and business owners who have been looking to expand their fleets are considering sustainability and longevity in addition to cost.

 

We’ve previously touched on the Government’s pledge to shift to zero emission cars and to create more desire around these options, company car drivers can benefit from zero or low tax rates as well as a 0% Benefit in Kind rate.

 

Fully electric cars which don’t produce CO2 have dropped from a BIK rate 16% to 0%, which could result in substantial savings for tax payers over the year. In addition, vehicles which produce higher emissions have had the BIK rate raised.

 

Benefits of EVs

 

– Low road tax

– Government Grants for charging ports

– Zero fuel costs

 

We’ve already seen a shift in the public and private hire transport market towards electrification, with operators such as National Express using EVs. Operators are increasingly aware of the environmental impact of their vehicles and it’s clear to see the demand for EVs isn’t slowing.

 

If you’re looking to expand your fleet, have you considered an electric vehicle?

 

With more changes and regulations coming into force in the next few years, we’ll likely see higher rates for more pollutant producing vehicles, meaning an EV or hybrid could be a more suitable long term investment in terms of running costs and benefits.

 

If you’re looking to expand your fleet and want to discuss sustainable, electrical transportation options, please get in touch and we can work with you and your finance requirements as well as introduce you to a trusted supplier.

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