January 15, 2020

Electric Vans

Electric Light Commercial Vehicles

Do they stack up for your business?

Public interest in pure electric cars has been increasing rapidly in recent times, as their performance and the choice of models continues to improve. Alongside this, manufacturers have also been introducing electric versions of their light commercial vehicles (LCVs) and, while sales remain tiny in comparison to traditional vans, their popularity is on the increase.

In this blog we look at some of the key questions that could help you decide whether an electric LCV could work for your business.

What electric vans are currently available?

Peugeot, Citroen, Nissan and Renault all have a range of small and medium size electric-only vans currently available on the market. These will be joined by offerings from Mercedes, Ford and VW in the coming months. As with electric cars, the number of manufacturers producing electric LCVs and the breadth of model choice is likely to increase significantly over the next couple of years, but those available now are well worth considering.

Are Government grants available for electric vans?

The Government currently offers grants of 20% of the purchase price (up to a maximum of £8k) for vans that produce less than 75g/km CO2 and can travel at least 10 miles on battery power alone. This means that, unlike for cars, some plug-in hybrid vans are also eligible for the grant.

For a full list of the vans that are eligible for the grant see the Government’s grant website.

How do purchase and leasing prices of electric LCVs stack up against traditional vans?

While the list prices of electric vans are currently higher than those of petrol or diesel models, the grants mentioned above do go some way to reducing the outlay if you purchase a van outright. Choose to lease an electric van and the cost variance is reduced further.

Residual values for electric cars have been improving consistently over the last few years, as knowledge about the durability of the new technologies (batteries in particular) has grown. This improved understanding is having a knock-on impact on the residual value of vans, which use very similar technology, and is reducing the cost of leasing further.

Are grants available for electric van charging points in the workplace?

The Government’s Workplace Charging Scheme will provide a grant of 75% of the cost of purchasing and installing a charge-point, up to a maximum of £500 for each socket and for up to 20 sockets per business. For more information about the scheme click here.

Do electric LCVs attract congestion and clean air zone charges?

Let’s break this down as there are a number of different schemes either in existence or planned.

  1. London Congestion Charge

The £11.50 daily charge, operating in Central London, is currently waived for vehicles that meet Euro 6 standards (petrol and diesel), have emissions of no more than 75g/km of CO2 and have a minimum electric-only range of 20 miles. This means that all electric cars and vans, along with a number of plug-in hybrids, are exempt from the charge.

For more information on the London Congestion charge click here.

  1. London Low Emission Zone (LEZ)

This charge, operating across Greater London, is designed to keep the most polluting diesel vehicles out of the city. For vehicles not meeting the required standards, the charge is either £100 or £200 per day. For LCVs, all vehicles registered from 1st January 2002 are exempt; this includes electric vans.

For more information on the London Low Emission Zone click here.

  1. London Ultra Low Emission Zone (ULEZ)

The daily ULEZ charge of £12.50 is currently payable when entering the area where the London Congestion operates. This will expand to the North and South Circular roads from October 2021. Vans currently exempt from the charge include all petrol vans meeting the Euro 4 emissions standard and diesels meeting the Euro 6 standard. All electric vans are therefore exempt from the charge.

For more information on the London Ultra Low Emission Zone click here.

  1. Other UK city Clean Air Zones

Five other cities will be introducing their own Clean Air Zones, or introducing other methods or improving air quality, from 2020. These are Birmingham, Derby, Leeds, Nottingham, Southampton and Manchester. Each of these zones will have their own rules and charge levels but it is safe to assume that pure electric vans will receive either full exemptions or significant reductions in charges.

How are electric vans treated for VED?

This one is nice and simple, there is no VED charge for electric vans, so there are annual savings to be made of £260 at the current rate.

What about Benefit-in-Kind tax for electric LCVs?

If you don’t use your van for private journeys you won’t have to pay BiK on any van. If you do use your electric van privately, you’ll be liable for just 60% of the standard van benefit charge in the 2019/20 tax year – this means a charge of £2,058 (60% of £3,430), so a significant saving.

This will rise to 80% of the standard van benefit in the 2020/21 tax year, 90% in 2021/22 and 100% in 2022/23 as the Government aligns taxation for electric LCVs with all other vans.

What’s the driving range of an electric van?

As with electric cars, this differs considerably from model to model but is increasing all the time as battery technology improves. The vast majority of vans are now capable of more than 100 miles on a single charge.

While this may not seem very far, businesses involved in ‘last mile delivery’ – getting goods from a delivery hub to the consumer’s address – are likely to find that these vehicles fit very well with their journey profiles. As many of these journeys also take place in urban centres where clean air charging is likely to be introduced, there’s the potential for further savings.

However, despite the ever-improving range between charges, and the improving public charging infrastructure, all electric vehicle drivers do have to be more aware of their journey range than drivers of conventional vehicles. As above, for some journey profiles the current electric van range will work perfectly, for others it will mean that these vehicles simply aren’t a viable option. By choosing the right type of LCV for the right type of journey you can optimise the running cost of your fleet of vehicles.

For more information about the availability of public charging point visit zap-map.company car tax changes

Are running costs of e-LCVs cheaper than for a diesel or petrol van?

The answer to this is a resounding yes. ‘Fuel’ costs will depend on a range of factors including the amount you pay per kilowatt hour (kWh) for charging, how the vehicle is driven and what payload it is carrying, but the cost per mile travelled is likely to be a fraction of the cost of using petrol or diesel.

Despite it being relatively new technology, maintenance costs for pure electric vans are lower than their internal combustion engine (ICE) equivalents. This is due to the greater simplicity of the electric drivetrain, which has far fewer moving parts, and lower levels of wear on components such as brakes, as ‘regenerative’ (or engine breaking) is used as a way of recharging the battery on the move.

Is the payload the same for an electric LCV as petrol and diesel vans?

Traditional large LCVs have a maximum weight limit of 3.5 tonnes, which includes the weight of the vehicle plus its payload. Electric vans tend to be heavier than their ICE equivalents because of their heavy battery packs and so have a slightly lower payload capacity.

To overcome this, the Department for Transport raised the overall limit for large electric LCVs to 4.25 tonnes. To use this higher limit drivers are required to undertake five hours of approved training and the vehicles can only be used to transport goods.

What will using an electric van say about my business?

Many businesses are feeling pressure from their customers to reduce their environmental impact. By using zero-tailpipe emission vehicles, particularly in urban areas, it demonstrates an awareness of these environmental concerns and that you’ve taken action to reduce your footprint.

If you’d like to speak to one of our fleet experts about electric vans or any other fleet topics click here.

To find out more about EVs and alternative fuel vehicles (AFVs) in general, visit our AFV resources page.