11/10/2022
We need an injection of optimism into the future of electric motoring
Ron Santiago, Managing Director, Europcar Mobility Group UK considers the challenges facing UK businesses and their drivers as the BVRLA continues to lobby for greater insight on BiK rates beyond 2025
A multitude of factors are currently creating the biggest supply chain challenges the automotive industry has ever seen. The impact of Covid-19 shutting down factories, the crisis in Ukraine impacting parts availability and the ongoing skills shortage have all led to a supply-and-demand imbalance that seems set to continue for the foreseeable future. With fewer new vehicles available, leasing and rental providers are competing with consumer buyers, resulting in ageing fleets that incur higher maintenance and repair costs.
On top of that unforeseen set of issues, comes the push towards electric vehicles (EVs). There is no doubt that businesses want to run greener fleets – every company we speak to wants to make the transition to zero emissions – but the change must bring businesses benefits not business burdens. Unfortunately, due to the uncertainty around future Benefit in Kind (BiK) rates and growing concerns around the cost of charging EVs as energy prices escalate, many are holding back from making the big switch.
In 2020, the government announced a BiK rate freeze until 2024/25, giving the sector a valuable incentive to go electric as rates were guaranteed to stay low for the entire lease period. However, with rates only frozen for another two years, we cannot be certain that tax will remain low for EVs added to fleet today. This has to be a deterrent for fleet managers to invest in EVs, and is likely to lead to businesses relying on ICE vehicles for longer, despite the environmental impact.
At Europcar we fully support the BVRLA ‘See the Benefit’ campaign, calling for the government to provide as much foresight as possible on future rates, and to ensure EV tax rates remain low to incentivise more eco-friendly fleet decisions. The 2020 BiK announcement gave the sector a significant boost, accelerating the switch to zero emissions vehicle options. However, faced with potential higher rates of tax on fleet EVs, businesses will fall back on the familiar and predictable ICE options, stalling the government’s efforts to meet its air quality improvement goals.
Reassurance that BiK rates will remain low for EVs could make a huge difference to business confidence and encourage more rapid changeover to EVs, reducing fleet emissions sooner rather than later.
