A quick check of the tax tables when it comes to having and using a company car shows a stark difference. Look at the left-hand side of the table, where the cars in Group A for company car tax sit, and that’s any car emitting 0g/km up to and including 59g/km.
If you’re a high-mileage driver, and the official criterion for that is that you’re covering more than 48,000km per year, then you’ll pay just 9 per cent tax on your Group A company car. If you’re in Group E, and that’s cars which emit anything more than 179g/km of CO2, and there are plenty that do, then you’re looking at paying 15 per cent tax, or up to 37.5 per cent if you’re a low-mileage driver.
So, the case is pretty much closed. If you’re buying a company car, then you should be going electric. It just makes vast amounts of sense. So why are some companies and some business user-choosers still showing reluctance when it comes to switching fleets to EV?
When it comes to convincing Irish businesses to switch their fleets to EVs, Derek Kavanagh from Bank of Ireland says there has been good progress in assisting businesses to transition to EVs.
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“However, challenges remain for quicker adoption,” he says. “Costs remain a key barrier, especially for those managing fleets, as the initial outlay or investment can be higher, even with grants and incentives. Businesses must review and assess the total cost of ownership, as EVs generally have lower running costs than those of a traditional petrol or diesel vehicle.
“There are still concerns over range anxiety and the charging infrastructure, but this must be viewed in the context of a continuing improvement in the national charging infrastructure and that many new electric vehicles currently on the market are capable of a range of 500km and greater.”
One big concern has surrounded the Government’s recent tinkering with EV grants and incentives, and concerns that a lack of clarity on Benefit In Kind (BIK) tax rules could cause companies to hold back.
Kavanagh says that while the rules are now more solidly set, thinking further ahead would be of benefit: “Yes, the BIK rules for EVs are currently clear, and their support for companies and their employees makes an informed decision to transition to EVs is welcomed. Noting that there is a planned phased reduction in the BIK relief in 2026 & 2027, it would be deemed beneficial and give confidence regarding long-term fleet planning if the BIK position were clearly guaranteed for a number of years. Businesses may hesitate to commit to large-scale EV transitions without guaranteed multi-year reliefs.”
It’s not just about Government support or incentives, though. Kavanagh says that Irish companies must make their own efforts to support employees making the electric changeover: “It is beneficial for businesses to support their employees in making the transition to EVs,” Kavanagh says.
”The change from an employee perspective can seem more daunting than the actual reality. It is important that employers provide support to their employees from an educational perspective on what the change will mean for them and to make the transition as easy as possible.
“The installation of a home charger for the employee by the company, coupled with potential low-rate tariffs, is both beneficial to the company and their employee, so it is a win for both parties.”
According to John Shiel, the chief executive of Wicklow-based GEV, an expert when it comes to getting companies to switch to electric power, some companies are further down the EV road.
“Every single company is talking about it, and it’s really the total cost of ownership, the reduced costs that they see. They’re worried about their initial investment, obviously, and they’re worried about where to start.”
GEV’s plan is to make that start easier, and that begins with working out what a company’s current vehicles do, and how easy it will be to make that step to electric power.
“What we do at the very start is we put a telematics device into their vehicles. It costs less than a tank of petrol or a tank of diesel. And then we can come back to them with a scientific report, and that tells them that for all of these vehicles, they have a substitute in the market that’s electric.
“You can drive it as you do currently, and you need not be worried about range. For these other vehicles, maybe there are two days or two weeks in the entire year when you need to be worried about range. We also come back with a report on the drivers, and see which ones need to be retrained.”
Which is great, but that suggests that a company, or its head of fleet operations, is already at least substantially interested in going electric. Many still aren’t, so why is that? The answer seems to be that there is still a lack of understanding about how EVs function, and worse, a lot of disinformation about how long batteries last and how robust they are.
According to Phil Barnes, business development manager at vehicle telematics and analysis experts Geotab: “EV battery degradation is often overstated and there is a lot of negative misinformation out there. Our telematics-based analysis of nearly 10,000 vehicles reveals an average annual battery health drop of just 1.8 per cent, improved from 2.3 per cent in earlier data. This suggests many current EVs will outlive the vehicle itself and require little to no battery replacement in their lifetimes. Ireland’s temperate climate is also great for EVs. It is never too hot or too cold, both of which can negatively impact performance.”
What needs to shift, in terms of business perception, is the visibility of the total cost of EV ownership.
If carmakers were to push the whole cost-of-life angle better, then businesses might sit up and take notice. Equally, as we move into an era of battery and vehicle recycling, what has traditionally been a depreciating asset won’t quite move into the realm of appreciating, but the value of the basic raw materials will help to offset the losses of depreciation when it comes to recycling time.
Already, BMW is working on a handy app that monitors the wholesale prices of the materials used to make EV batteries – lithium, cobalt, manganese, graphite – and will determine when the value of recycling a battery exceeds the value of the car.
