Salary Sacrifice key to Electric Vehicle Adoption. Subscribe to Electric Vehicle News Bitesize Podcast for FREE!
New research highlights the value of salary sacrifice in driving continued adoption of battery electric vehicles (BEVs), with more than half (60%) of drivers saying they would choose full Electric Vehicle financing if available.
However, without a salary sacrifice plan, a similar proportion (61%) of workers said they would buy a gasoline or hybrid vehicle.
The survey of more than 2,000 professional drivers commissioned by salary sacrifice specialist Tusker for its annual Driving Report also revealed that despite the cost of living crisis, more than half (53%) want to change their car in 2 years.
It points to a significant opportunity for the continued decarbonisation of the salary sacrifice and UK car fleet. Tusker chief executive Paul Gilshan said: “If we’re going to turn the UK into an electric vehicle market, we really need to make it accessible to everyone in the UK and I just don’t think we can do that because it is simply too expensive (currently to buy an electric car).
“Our research clearly shows, however, that demand is definitely there for EVs, given the right incentives.”
Gulshan claimed that the low benefit-in-kind rate for EVs, combined with the ability to finance new cars through salary sacrifice, provided the government with a way to bring EVs to the mass market.
Research shows that of those looking to buy a new car, one in four (25%) plans to PCP a new car and one in five (20%) plans to buy the vehicle outright.
Of those looking to replace their car within the next two years, more than a third (37%) expect to get a vehicle that is one to three years old, and one in five (19%) will get three to four years and another 15% said they would choose a new car.
“I just think salary sacrifice is getting more people, especially the right people, the later adopters, to electric vehicles now is key,” Gilshan said.
Latest sales figures show nearly 200,000 new BEVs and more than 80,000 plug-in hybrid electric vehicles have been registered so far this year, with the Society of Motor Manufacturers and Traders (SMMT) forecasting a plug-in market share of 21.9% by 2022.
However, for the first time since the pandemic, BEV usage growth in October was lower than that of the overall market; it was the first month since May 2021 that BEV market share fell year-over-year.
This is in line with the views of several FN50 leasing companies, which have reported that Electric Vehicle orders have cooled in recent months.
The total number of BEVs on UK roads exceeded 500,000 in June, according to Department of Transport licensing figures.
Salary Sacrifice has played a major role in driving these Electric Vehicle adoption rates. In its latest quarterly rental outlook report, the British Car Rental Association (BVRLA) said salary sacrifice for its members rose 33% year-on-year to 35,751 vehicles.
Tusker’s annual driving report shows that running costs are the most important factor when choosing a new car, with 58 percent of respondents saying they find gasoline or diesel vehicles expensive to run.
Among those surveyed, the cost of running their next car was the biggest factor in choosing their next car (61%), followed by acquisition cost (54%), followed by style (32%) and safety (31%).
For similar internal combustion and electric vehicles, in this case a VW ID3 with 58 kWh and a VW Golf with a 1.5-liter gasoline engine with 130 horsepower. Tusker found an Electric Vehicle driver would be better off even before the other additional financial benefits of salary sacrifice have been factored into the calculations.
If the ID3 is charged at home via a 7kW home charger at 34 pence per kWh and the Golf is fuelled at the current average cost of 165.5 pence per litre, and both drive 10,000 miles per year, the electric ID3 will run for 7.3p a mile cheaper and save £60.80 per month.
“It remains significantly cheaper, even with a higher rate of electricity, to run an electric vehicle,” said Gilshan.
However, studies have shown that there is a conflict between the cost of running a petrol or diesel car and the cost of running an electric car.
Nearly three-fifths (58%) of those who would choose an Electric Vehicle said they felt it was expensive to drive a gasoline or diesel car, while 54% of professional drivers who would not buy an Electric Vehicle said it was because of the price of running one.
It suggests that the leasing industry and fleets have a job to do on educating drivers on Electric Vehicle running costs and the total cost of ownership. Gilshan agreed. “I think the industry needs to continue to myth bust,” he said. “We also need to show, with average mileages falling, they don’t need to charge that often.”
According to Tusker’s annual report, average monthly miles driven continued to decline year-over-year, with 87% of drivers driving less than 150 miles per week, an 8% drop from 2021 numbers.
Meanwhile, less than half (44%) of respondents drive fewer than 50 miles per week, and only 20% of drivers drive between 100 and 200 miles per week.
Less than 2 percent of respondents drive more than 200 miles per week. Tusker’s own drivers have slightly higher mileage than average, though 63 percent of drivers still drive less than 150 miles per week.
On average, just 73 miles are traveled across the UK each week. Drivers in Greater London drove the lowest miles per week (64 miles), while drivers in Northern Ireland drove the most, on average, at 99 miles per week.
According to Tusker, which shows an average Electric Vehicle range of 268 miles, they suggest that 95.4% of drivers could switch to Electric Vehicle without charging more than once a week.
Please give Electric Vehicle News Bitesize Podcast a 5 Star Review to help us grow our audience.
Subscribe to the Electric Vehicle News Bitesize Podcast for FREE on Apple Podcasts, Google Podcasts, Overcast, Deezer, Breaker, Castbox, Pocket Casts, RadioPublic, Stitcher, Amazon Music, Audible, Gaana, Samsung Podcasts, Google News and the Electric Vehicle News Bitesize Alexa Skill.
For more Articles and Episodes search Ford accelerates production of electric vehicles.
