February 28, 2012
Businesses buying a new electric van will receive a 20% subsidy and tax breaks to help them go green, following the launch of the Plug-in Van Grant, writes Simon Wicks.
The Government scheme will give firms a discount of up to £8,000 on one of seven approved models, as well as exemption from the van benefit charge, capital allowance concessions and a 100% discount on the London congestion charge.
The initiative – which is being supported by large firms such as British Gas and BT – follows the low take-up Plug-in Car Grants launched last year. Unlike electric cars, however, electric van prices compare favourably with diesel equivalents – the Renault Kangoo, for example, starts at £16,990 before the 20% grant.
Announcing the grant, small-business minister Mark Prisk said: “Vans are essential to the smooth running of so many businesses and contribute enormously to the UK economy. An upfront purchase grant, when combined with lower running costs and tax benefits, can make switching to an ultra-low carbon van an attractive choice for those businesses.”
A report by the Climate Group, Cenex and the Energy Saving Trust has estimated that a small electric van will typically cost £100 less in fuel for every 1,000 miles driven compared to its diesel equivalent. A statement from the Department for Transport said this would be of particular benefit to businesses with predictable routes and distances to travel each day and an overnight base to return to.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said: “The savings on the initial purchase price, coupled with the tax advantages and very low running costs make a plug-in van an attractive proposition – particularly for those running local and back-to-base services.”
However, Jo Eveleigh of DealDrivers, which helps businesses find the best car and van deals, said electric vans were an unrealistic option for most firms, with charging time and insurance being the biggest obstacles.
“The critical thing is that any commercial vehicle is a massive dent in their finances, so they have to be out on the road and earning money,” she said. “When the vehicle is being recharged [which typically takes around six hours], that’s downtime when it’s not making money.
“Not many businesses have a business model where they can wait for the vehicle to be charged between journeys,” Eveleigh added. “It’s ok if you’re in a city like Birmingham where there are lots of charging points, but even then everybody will want to use them at the same time, from 8pm to 8am.”
Currently there are 2,500 charging points across the UK, with another 4,000 due to be installed by the end of 2012.
Businesses wishing to apply for a Plug-in Van Grant can do so via the dealer from whom they buy the van.