Home Business NewsBusinessAutomotive News Are electric cars a worthwhile business investment?

Are electric cars a worthwhile business investment?

by John Saunders
19th Feb 20 10:32 am

Now that they’re finally starting to reach the prominence that was once promised of them, electric cars are becoming a realistic consideration for businesses of all sizes to invest in. The world is moving closer and closer to a future of e-mobility, and business owners need to think long and hard about how their employees travel.

If petrol cars are now out of fashion, then every type of business from fleet management to start-ups travelling across the city will be looking for the best possible transport investment. If you’re still in two minds about electric cars, here are our guides to the pros and cons.

Types of vehicles

First, let’s take a look at the different forms of electric cars currently available. It’s not as simple as choosing between a gas or electric car, there are many different types with unique financial and maintenance requirements.

Choosing the right vehicle can be a huge financial boost or a devastating drain on your business. Make sure you choose the one that fits your budget and requirements.

Mild hybrids: Featuring an engine always assisted by an electric motor, this vehicle has a smaller petrol engine with improved fuel economy. The engine charges the battery when the car isn’t accelerating, and it also features regenerative braking, which charges the battery when braking.

Full hybrids: Efficient with almost zero emissions. These models can be driven on the electric motor alone for limited distances. Regenerative braking and recharging when the car isn’t accelerating are optimised by the battery.

Plug-in hybrids: A combination of a petrol and diesel engine with a battery and electric motor. Their battery capacity makes it easier to drive long distances on just the electric motor. The common domestic model that is charged by being plugged into the mains electricity.

Extended range hybrids: Similar to Plug-in models, these vehicles are always charged by their electric motors. Its petrol engine simply charges the battery on long journeys, acting as a generator rather than powering the wheels.

Pure electric: Powered entirely by on-board batteries, the latest generations of this vehicle type have pushed the boundaries of electric car battery capacity. When fully charged they have a typical range of 80-100 miles. They do come with stringent safety testing for overall performance before being considered suitable for motorway driving.

Invest

Despite a higher initial cost, it is actually cheaper to run electric cars day-to-day for your business. If you were to charge the car overnight, the average cost of a 100 mile journey would be £4, which you don’t need to be an economist or car-enthusiast to know is much cheaper than a petrol equivalent.

For further savings on hybrid models, you can also use a fuel card, which entitles businesses to money off fuel. Check the iCompario site to find the card to suit your business.

A common push-back electric car drivers will receive is they’re much slower than petrol models. There is no need for your staff to worry about long days on the road though, as modern electric cars are often quite quick, benefitting from a better power-to-weight ratio.

Carbon footprints, and how to reduce them, are a major consideration for the majority of modern businesses. If you want to take a significant chuck out of yours, there’s almost no better way than transiting over to electric vehicles. Having a team travelling the country in silent, clean vehicles is an excellent asset for your branding and public profile.

You’ll also save significant cost on the maintenance of your vehicles. Maintaining electric cars and their ‘shaft’ is much cheaper and happens much more infrequently. The estimated lifespan of a car battery is 100,000 miles, after which it begins to lose its ability to hold charge. Replacing this battery will, hopefully, be the only significant cost you have to make.

Having an electric vehicle in the UK entitles you to the UK Plug-in Car Grant of up to £4,500. On top of this, you will be exempted from the London congestion charge — huge savings for a small business just starting out.

Don’t invest

One argument that will always hang over electric cars is the issue of limited range. While petrol cars perform better over long distances, electric vehicles are just the opposite, saving you money and performing better in stop-start scenarios.

While models are improving this limitation and the frequency of electric charging stops is rising in the UK, the issue still exists on existing models. Perhaps not a reason to outright write-off investing in electric vehicles, but one to convince you to wait it out until improvements are made to battery longevity.

Up-front costs still outweigh that of petrol vehicles. If you don’t have the money to invest in a more initially expensive vehicle, such as with a small business, it may not be the best idea. The limited variety within the market will lead you to spend more on a model than you would spend on a petrol equivalent.

Two words: battery life. Run-down batteries are the bane of our lives, from not being able to find one to replace in the remote, to the way your phone battery declines beyond usability after a couple of years

Unfortunately, the same will eventually happen with your electric vehicle. You have plenty of time before this starts to happen, but once you reach around 100,000 miles you will have an expensive replacement to make.

There are many other considerations to make before your business invests in an electric car, such as what your staff like to drive and how frequently you will be making use of the vehicle at all. Take this advice and also consider how it will affect your bottom line come the end of the financial year.

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