Added boost for electric future
THERE are now more than 136,000 pure-electric cars on UK roads.
But electric models still only account for 4.7 per cent of total new car registrations.
The Government has adopted a carrot and stick approach to get more of us onside. From 2035 the sale of new petrol, diesel and hybrid cars will be banned. Meanwhile, all sorts of incentives are dangled at potential purchasers designed to make the vehicles more competitive and break our love affair with the internal combustion engine.
Yet there remains a reluctance among many to embrace the new technology. Partly this is a hangover from the diesel engine shambles when governments first encouraged them, then condemned them. People remember what happened with solar power – first it was made to appear a no brainer, then the generous payments were pulled. There were even doubts over the so-called big advantage – kindness to the environment and lack of emissions. Cynics point out that you still have to generate the energy somehow, claim lithium mining is exploitative, point out that vast amounts of water have to be used, and question the recyclability of exhausted batteries.
Finally, the up-front cost of an electric vehicle is significantly higher than for a conventional petrol or diesel version.
Hence the battle for hearts and minds is yet to be won.
Electric cars have the marmite tag – for the messianic it is a matter of saving the world, while critics believe the politicians have fallen for the costly obsessions of motor mavericks. But what about those incentives?
A Government grant will pay for 35 per cent of the purchase price for electric vehicles, up to a maximum of £3,000. There is no company car tax on them, with a mere one per cent in 2021 and two per cent in 2022. And there is a special salary sacrifice deal offering big savings on National Insurance and Income Tax. So much so that the UK’s leading electric car specialist, based in Birmingham, Electric Zoo, claims: “By coupling salary sacrifice with electric cars, employees can save up to 45 per cent compared to retail, making electric car motoring better value than running a five-year-old diesel or petrol car.”
In essence, the scheme sees employees give up salary in exchange for a fully-funded car with the option of everything covered (except electricity) within the monthly payment. Employers get the kudos.
Car leasing group Parkers notes: “Time was when electric cars were shunned by most car buyers. Price, practicality, range anxiety concerns and lack of desirability were cited. “As mainstream car makers were pushed into producing more electric vehicles thanks to ever-tightening emissions regulations, the electric revolution kicked off. Around 300 miles on a single charge is no longer make-believe; charging points are growing in number. At the moment, electric cars tend to be a touch pricier than equivalent petrol models. Basic petrol Volkswagen Golfs start at around £24,000, whereas the electric Volkswagen
ID.3 will set you back more like £29,000.
“But, because electric cars have a relatively low depreciation rate, leasing deals tend to be close to on par with petrol cars.
“And that’s before you start saving money on fuel. The electric Kia e-Niro will cover 33.1 miles for a pound, while even the most economical hybrid Kia Niro will only do 10.1 miles for a pound.”
The cost to the employee of an Electric Zoo salary sacrifice package incorporating zero deposit, zero insurance, zero road tax, zero maintenance, breakdown assistance and MOT are Renault Zoe, £256 per month; Audi E-Tron Estate, £618; and MG Motor UK ZS electric hatchback, £218. No stopping the electric car crusade, it seems.
Trevor Law is managing director of Eastcote Wealth Management, chartered financial planners,
based in Solihull. Email: tlaw@eastcotewealth.co.uk The views expressed in this article should not be construed as financial advice