Friday 14th April
World Earth Day: Growing support for electric fleets
Commercial fleets in both the private and public sector account for approximately six million vehicles on the roads today. As we approach World Earth Day on 22 April, we look at the support available to businesses to help them decarbonise their fleets.
World Earth Day 2023 organisers encourage everyone to participate in the green revolution. Their Green Cities and local governments campaign specifically promotes the growth of electric vehicle fleets to achieve Net Zero targets, but what support is available to businesses to do so?
Increased charging infrastructure
British companies installed a record 8,700 public electric car chargers in 2022. According to data company Zap-Map, the UK now has more than 37,000 public chargers – a 30% year-on-year increase. This figure is set to increase this year. The UK Government announced that drivers would benefit from a further £56 million in public and industry funding for additional electric vehicle (EV) charge points this year. This funding will create 2,400 extra charge points across England and help level up the country’s charging infrastructure. It is a step towards achieving their target of 300,000 public chargers by 2030 when the sale of petrol or diesel cars will be banned.
In addition to expanding the pilot scheme, the government is launching an £8 million LEVI Capability Fund, which will help local authorities speed up their charging strategy plans. A further £7 million in funding will be allocated to the On-Street Residential Chargepoint Scheme (ORCS). Three thousand charge points have been installed under ORCS, with a further 10,000 in the pipeline.
Lee Partner, Head of Private Clients and Commercial, Kerry London, said:
“As we move closer to 2030 and the end of the sale of new petrol and diesel vehicles, many businesses will be considering their transition plans for electric fleets. Lower running costs, exemption from many charges, and the gradual growth in charging infrastructure are positive incentives.”
Electric fleet insurance – what’s covered?
- Fleet Insurance – Most large car insurers will cover electric vehicles and petrol or diesel vehicles, but it’s always worth checking in advance with your insurance broker. It still costs more to insure electric vehicles (EVs), but this situation is evolving and will likely change when the ban on the sale of new petrol and diesel cars comes into effect in 2030.
- Expensive parts – EV technology is still relatively new, so the cost to repair or replace specialist parts or service the vehicle tends to be higher – resulting in higher insurance premiums.
- EV batteries – EV batteries should be covered for the usual risks such as accidental damage, fire, or theft. According to Which?, both specialist EV policies and standard policies should cover these, but they advise double-checking with your insurance broker in both cases.
- Chargers and charging cables – Check with your broker that your company fleet is covered for accidental damage, fire, and theft of equipment. Some insurers offer additional public liability insurance protection against a member of the public taking legal action for tripping over charging cables.
- Insuring leased batteries – Most batteries are now included in the purchase price of a new vehicle. If you have a leased battery, ask your broker about the insurance you’re getting as part of the lease; it may reduce your premium.
- Corporation tax allowance – The 100% First Year Allowance (FYA) available to businesses installing electric vehicle charging points is extended for 2 years to 31 March 2025. This is the second time the relief has been extended since its introduction in November 2016.
- VAT on charging electric fleets – HMRC and HM Treasury have received questions from businesses about the limited options for reclaiming VAT on EV charging costs and the administrative burden. HMRC plans to publish guidance to confirm its policy once the review is completed – watch this space.
It’s still early days, but when the percentage of EVs to traditional road vehicles increases, businesses will likely see more incentives to switch to green fleets. The increased urgency of the Net Zero agenda and the UK Government committing to end the sale of new petrol and diesel cars by 2030, has brought electric fleets up the list of business priorities. Businesses that start planning now are more likely to reap the benefits.
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Kerry London is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent and Lloyd’s accredited broker, which means that we work with a wide range of niche and major insurers.
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note, we have relied on information sourced from third parties, and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law.
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