5 things to know when buying an EV

Electric Vehicles (EVs) are a future we can't avoid, but how to get the most out of your decision to go the electric route?

The head of Nissan Andy Palmer said ten years ago, whilst developing the Nissan Leaf, that the “Electrification of cars is more certain than death or taxes” and today this vision is turning into reality with 50-60% of the population considering buying their first EV.

So, what do prospective EV owners need to know?

1. Understand all the tax breaks available

Having a good accountant is more important than a mechanic with EV’s. Never buy an EV if you can operate one via a business lease.

It is 32-42% cheaper for an employee to lease an EV via a company Salary Sacrifice Schemes (SSS), with the company also saving £250 per £1,000 spent via not paying 15% NI and reclaiming 50% of the 20% VAT on a lease.

It’s also important to “Bundle” into the lease payment insurance, maintenance, and tires as these attract the same tax saving.

Unfortunately, lower paid staff earning less than £21k,  who would benefit from the 66% lower operating costs of EV’s, cannot use the scheme if the SSS deduction reduces their net salary below the minimum national wage.

If you run your own business, taking a low salary whilst paying annual dividends at 29% tax, just write off the EV off as a company expense and save 29% tax. Again, don’t forget to charge the company for insurance and maintenance.

However, the leasing computer may say “No” to your business unless it has been profitable for the last three years and has decent balance sheet/credit rating, which may be difficult when emerging from the impact of Covid-19. It is possible to find a few leasing firms offering personal “PCP leases”, which can be paid for via a company SSS as these look at your personal credit rating and not the businesses.

Finally, don’t forget that zero emission EV’s are exempt from road tax, and don’t have attract London congestion or regional clear air charges e.g., Manchester.

 

2. Find the right EV electricity tariff.

Most houses currently pay a fixed cost per Kilowatt hour used, as measured by a “dumb” meter which ignores the time of day you use the electricity.

New 'Smart Meters' record when the charge is taken and allows the massive arbitrage between peak and night-time tariffs to be exploited. Peak rates between 6-10pm cost 16p per mile to charged, but overnight rates between 12pm to 4am drop to 6p per mile, allowing charging costs to be cut by 60%.

The charging unit manufactures have already agreed a common language, allowing all chargers to be controlled called OCPP 1.6. The Government last week announced forthcoming legislation, requiring all home EV chargers to be “Smart” and has banned installers from tying them to just one energy provider. This means that EV charging tariffs will become a competitive space, with it being possibly that an EV will be charged by a different supplier than the main house.

 

3. 95% of people only charge at home.

When buying an EV many people are paranoid about how many charging locations they can find locally on Zap map. However, with average EV ranges now exceeding 200 miles, 95% of people only ever plug in at home and charge overnight, as the daily commutes or social journeys rarely exceed this requirement.

Currently, owning an EV often means longer journeys are easier using a combination of trains and uber for the last miles. At times this can be inconvenient, but we are saving the planet here.

However, 'end destination' overnight charging networks are springing up, centred around hotels, restaurants and pubs who allow you to book an overnight charge for £20 in their car parks. This allows drivers to avoid the 1 hour waits at motorway 'Super Charge' stations, by driving directly to their longer distance destination and using an overnight charger to power their return journey.

 

4. All EV mileage estimates are lies

Few EV’s will ever deliver the mileage estimates on the dashboard. The reasons why are twofold:

 ·       Heating Units. I.C.E (internal combustion engine) cars, heat the vehicle by extracting waist heat from the combustion engine, which when combined with their much longer petrol-based range, means you never notice the impact of having the heating on. EV’s don’t have this opportunity and need dedicated electrically powered units, which impact maximum mileage by 60 miles if you have them on for the full journey. So, consider pre-heating the car using the mobile phone app controls whilst its still plugged in at home and wearing a jumper to maximise journey length.

·       Heavy footed drivers. Drivers love the acceleration that EV’s offer, but a heavy foot can reduce maximum mileages by 20%.

 

5. Forget the need for Annual Services.

Unlike traditional I.C.E cars, EV’s have few moving parts requiring oil or filter replacements, with brakes that use reverse energy gathering technologies and don’t need replaceable brake pads.

Although heavier EV’s ware through tires at a faster rate, it’s only the heating and air conditioning units that need bi-annual services.

 

EV’s are a future we cannot avoid.

If 2021 was the year of new EV model launches, with TV adverts becoming every day viewing, it will be 2025/26 that the inflexion point of 40-50% new EV car sales is reached.

So install your home charger, before buckling up with your jumper on to exploit the generosity of the tax man, before the EV road trip sets off and leaves you a 'me too EV driver' paying catch up.