Let's Talk Leasing - Dave McEwen

We asked Agnew Leasing's Head of Business Development Dave McEwen questions around adding electric and hybrid vehicles to your fleet. Which is better PHEV or BEV?, should drivers be reimbursed fuel expenses and why whole life costs is vital to electrifying your fleet.

Which is better for my business, a PHEV or BEV?

This very much depends on the individual circumstances of the business and the employee/driver. It can in most cases come down to acceptable battery range and possible charging availability. If a driver needs to do daily journeys in excess of 200 miles then a full EV may be more challenging but if this driver is based in GB where the charging infrastructure is better then this may well not be a significant issue. Battery ranges are also increasing with each new model evolution and this issue may become less critical over time.

How should companies reimburse their drivers of BEVs and PHEVs for their business fuel expenses?

With the many more businesses including both BEV’s and PHEVs in their fleets, the method of fuel reimbursement has become even more important. The Advisory Fuel rate for Electric vehicles is now 9 pence per mile whereas PHEVs are paid at the same rate as Petrol & Diesel (ICE) vehicles there is no reason for a business to pay at a rate above this level. In most cases it is significantly better for a business to remove the option of a fuel card along with fuel benefit to keep their costs consistent and to encourage PHEV Drivers to charge their vehicles. A PHEV still gives significant BIK saving to a company car driver while removing the mileage limitations of full BEV’s. 

Why is it important to use whole life costs rather than simple monthly rentals to determine which cars a business should select?

One of the challenges of adopting electric vehicles (EVs) is the higher monthly rental cost compared to internal combustion engine (ICE) vehicles that run on diesel or petrol. This is especially true for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), which may exceed the budget of some drivers. However, a complete analysis of the whole life costs of EVs versus ICE vehicles reveals that the gap is much narrower than it appears. Factors such as VAT, corporation tax offset, and Class 1a NIC costs can significantly reduce the net cost of EVs. In some cases, EVs can even be cheaper than ICE vehicles over their lifetime.

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