As Cop26 comes to a disappointing end, awareness levels of the need to act now, to stem climate change, have never been higher across all generations. However, the UK Government needs to take a hard look at how it can encourage younger people to move to EV’s, as its current schemes don’t appear to work for most young people.
29% of our annual personal CO2 emissions come from driving a diesel or petrol car, commonly referred to as I.C.E cars (Internal Combustion Engine). The switch to driving an emission-free EV is by far the simplest thing any of us can do to save the planet, as the only thing different, is that we plug them in overnight to charge rather than popping to a petrol station.
Range anxiety in my opinion is a wildly exaggerated issue with research showing that 95% of charging is done at home, with post-Covid mileage as low as 200 miles per week, which is within the capabilities of current EV batteries daily range, let alone a weekly. If longer journeys are required, just jump on a train, and get an uber for the last few miles. It really is not hard to move to an EV in the modern world and research shows most young people are ready to make the switch if they can afford to do so.
Currently, EV’s are 20-30% more expensive than their ICE alternatives and to counter this the Government has introduced massive tax breaks in the form of Salary Sacrifice Schemes (SSS), which are only available via employers. These allow staff to pay for an EV lease from their gross salary before tax is paid and reduce's the amount of money you pay your highest rate of tax on.
However, unusually this means the more you earn the more you save.
For example, a senior manager earning £72k may decide to take a lease on a top of the range Tesla costing £1,000 per month. Under the Salary Sacrifice Scheme, they would save 42% tax or £420, reducing the effective cost of the EV lease to an affordable £580, which compares very favourably to most ICE leases that still carry a high Benefit in Kind (BIK) charge of around 23% of the value of the car.
The big problem is that many young people will miss out on access to Salary Sacrifice Schemes if they earn less than £20k per year, as their companies cannot allow a salary sacrifice payment that takes their net pay below the National Minimum Wage.
Even when young people do qualify the benefit will be at the lower 32% tax level and usually on a less expensive EV lease. The current EV incentive schemes are clearly not geared to encouraging young people to switch and ned revisiting urgently.
Insurance companies are also hitting EV youngsters hard, as they don’t like insuring younger people on the more expensive and often much faster EV’s.
Young drivers will be forced to install one of the insurance companies “Big Brother” black boxes, which monitor speed if they are to have the slightest chance of getting an affordable insurance quote even when driving a more affordable EV such as the Nissan Leave or Renault Zoe.
The best route for young people is likely to be to persuade a higher-paid parent to take out an SSS based lease via their business and to then pass this to a child, recharging the lower net cost. Most companies are already allowing spouses to drivetheir “Green Fleet” EVs, which is where the EV has been given as an employment “Perk” to drive staff recruitment and retention, rather than from any need to drive for company purposes.
However, fleet insurance policies often have minimum age restrictions, so you may have to hope that top bosses also have teenagers wanting their first EV!
Eco believes that offering insurance subsidies and under 23’s first EV discounts would be a fair and equitable way to balance the big tax incentives offered to older and higher-income company EV drivers.
Allowing the young to drive the move to save the planet must become a key policy commitment of any political party wanting to win the young vote and as in politics votes drive action.