Electric Vans and the Motor Trade

Electric Vans and the Motor Trade

The recent announcement by car companies Hyundai and KIA that they are to invest £85m in UK electric van manufacturer arrival is certainly good news for those seeking cleaner alternatives for UK roads.

Although still a relatively immature market, sales of electric vans (EV) rose to 3,204 in 2019, according to the Society of Motor Manufacturers & Traders (SMMT). The UK is one of the world leaders in EV infrastructure in Europe with an average of nine EVs per public charge point, exceeding the recommended targets by the European Commission.

Much has been written about the switch to EV technology, but within the motor trade the uptake appears conservative not least because many falsehoods persist about electric vehicles.

In the first of two blogs, we take look at electric vans and your motor trade business. What type of EV’s are available, what costs savings can be made and how might the switch affect your van insurance. 

What EV to Choose?

Battery Electric Vehicle (BEV) – a van just powered 100 percent by a battery fuel cell. It won’t have a conventional engine as a contingency if your van’s battery runs flat. It’s usually quiet as a mouse with virtually no engine noise.

Plug-in Hybrid Electric Vehicle (PHEV) – means the van has both a battery and a conventional combustion engine. If you are making short trips, you can be 100% battery electric in a PHEV, but on longer trips the diesel or petrol engine kicks in at around the 30-mile mark once the battery has run out of charge (you’ll hear it). You will then have to plug the van into a charging point.

Hybrid Electric Vehicle (HEV) – this has an electric battery and a conventional petrol or diesel engine. However, the small battery doesn’t need plugging to recharge – it charges itself partly via ‘regenerative braking’, whereby when you depress the brake it makes the electric motor behave as a generator which can charge the battery.

Fuel Cell Vehicle (FCV) – this is a type of electric vehicle which uses a fuel cell instead of/or in combination with a battery or supercapacitor to power its on-board electric motor. Fuel cells in the van generate electricity to power the motor, generally using oxygen from the air and compressed hydrogen. Most fuel cell vehicles are classified as zero-emissions vehicles that emit only water and heat.

EV: An Expensive Proposition?

Whilst still more expensive than conventional diesel and petrol vans, prices of EV vehicles are coming down. There are also government grants available towards the cost of buying electric vans as well as grants towards the cost of installing a home charge point.

Electric vans work best for fleets that cover short distances and ‘last-mile’ delivery services usually operating in urban areas requiring multiple stops from the depot. Also, EV vans now offer the kind of telematics that allow fleet operators to improve routes so that battery range is less of a concern.

Fuel and Tax Savings

EVs are cheaper per mile to run than petrol or diesel, costing around a quarter of the price. That means you’re looking at just under £5 for 200 miles if charged at home.

Since UK Road Tax is based on exhaust emissions, most electric vans are exempt – meaning little or zero road tax. For companies, there are also savings to be made when taxing your vans. A van benefit charge is applied when an employee is provided with a van for private use. This is a flat rate of £3,430 which is paid through the employee’s income tax and the employer’s national insurance. Zero emission-vans are only liable to pay just 60% of the full van benefit charge.

A van fuel benefit charge is applied when an employee is given a van and the company pays for the fuel.  As electricity is not treated as fuel, no tax is required. This is only applicable if the vehicle is charged at the workplace. There’s also no New Car Tax – saving the £140 paid on petrol and diesel vehicles.

Insurance companies report that currently electric cars can be more expensive to insure. However, as EVs become more familiar, van insurance premiums are coming down year upon year.

As for the inconvenience, most electric vehicle owners home charge. The UK government also provides a grant towards the cost of purchasing a charge point. The public charging infrastructure is constantly improving with more than 16,500 public charge points across the UK in supermarkets, service stations, car parks, hotels and some garage forecourts.

How Far Can You Go?

For a lot of potential EV switchers, there are some genuine worries and preconceptions that are hindering the move. For those in the van delivery or courier businesses the major concern is the lack of mileage range offered by an EV van.

However, with ever changing technology across various makes, models and driving conditions, some of the latest van models can travel more than 200 miles on a single charge.

Constant improvements in battery technology means that an electric van has increased range capability, so a van should be able to do a day’s work without having to be recharged. Once the van is back at the depot, it can then be charged overnight at a relatively low cost when compared to filling up with diesel or petrol

Motor trades

There are substantial savings to be made on running costs. An electric van is entitled to a greener vehicle discount on the London congestion charge. Because your electric van doesn’t have any emissions, it’s exempt from Vehicle Excise Duty saving you and your company around £140 per year compared to a regular van. 

The plug-in grant was introduced by the government to reduce the price of electric and hybrid vans. The great thing is you don’t have to apply for the grant yourself, it’s administered by the Office for Low Emission Vehicles. Not all electric or hybrid vehicles are eligible for a grant, it’s only ones that have been approved by the government. These have CO2 emissions of less than 75g/km and travel at least 16km (10 miles) without any CO2 emissions at all.

There are also minimal fuel costs, with electricity being cheaper per mile than diesel or petrol. According to Nissan, the E-NV200 costs 2p-per-mile to charge, which is significantly cheaper than petrol or diesel costs.

Other news

In our previous blog Electric Vans and the Motor Trade, we looked at the ever-growing interest in electric vehicles in the UK market.

When taking out a motor trade insurance policy, you will find many differences in the benefits that come as standard on some cover, but optional extras on others