One of the latest arguments against the Electric Vehicle market, at least in the U.K., is that they aren’t selling well because they are only being purchased by fleet customers. Industry data in 2023 showed that 76% of BEV sales were to fleets, and only 24% to private buyers. However, this could be a misunderstanding of the sales figures. It’s certainly being used to downplay an Electric Vehicle market that in reality is going from strength to strength – and about to enter a new phase.
The key factor is what counts as a fleet vehicle. In the UK, “salary sacrifice” schemes have been hugely popular, because they provide the opportunity to save you thousands on owning an EV, and can even make them cheaper to buy than the equivalent internal combustion engine model. Because your car payments are deducted from your gross salary before tax, they reduce your taxable income, saving lots of money on income tax, reducing the effectively monthly payments on the car.
You do still pay some tax for the use of the company car because it is considered a “Benefit in Kind” (BiK). This tax is a percentage of the new price of the vehicle you get to use as a perk from your company (even if you have sacrificed salary to get it). A few years ago, the percentage was zero for an EV, and it’s still only 2% per year for 2023-24 and 2024-25. The rate will then rise 1% per year until 2027-28, when it will reach 5%.
Read more: Forbes
