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Accessibility and Electric Mobility: How EVs put everyone behind the wheel

Electric Vehicles
Financial

As the UK hits the accelerator on the electric vehicle (EV) transition to meet its ambitious 2030 targets, people have started to question the accessibility of electric cars.

Unfortunately, there are still many people who – while convinced about electric cars’ role in the green transition – believe that EVs are simply inaccessible for them.

At loveelectric, we’re passionate about democratising EV access: we’ve written before about how this motivation led to the birth of our company. But what does EV accessibility look like when living in a high-density city or the far-flung reaches of the glorious Scottish Highlands? Or if you are one of the estimated 2.7 million disabled drivers in the UK? 

We’ve identified three core accessibility barriers:

  1. The price is too high
  2. The infrastructure isn’t ready to support an all-electric car fleet
  3. Electric cars aren’t physically accessible to people with disabilities and mobility issues

However, as we’ll see, EV costs will soon drop; the infrastructure continues to improve year on year, and; accessibility plans are in place to ensure all people can physically access and operate electric cars.

The future of electric cars must be accessible, and here are a few ways that the automotive industry is making that happen. 

EV costs will drop

It’s no secret: electric cars are expensive. As people across the UK feel the financial strain when fueling their petrol- or diesel-powered vehicle, many look to electric cars to ease that pain. However, with electric car prices still rising, it seems to be an inescapable fact that, for many, an electric vehicle is simply out of the question. 

To transition to a fully electric car fleet, car costs must drop to ensure anyone can access an electric car. 

Indeed, the perception that electric cars are only accessible to a few may soon be a distant memory. The second-hand market is booming, battery costs (the most significant indicator for e-car cost) are falling dramatically, and technology continues to improve, bringing more cars to the market. 

The EV market is still very new, with 530,000 EVs out of the 32.5 million cars on UK roads. But these stats are more optimistic than they first appear: this growth has been exponential since 2016, and 14.5% of new car sales in the UK in 2022 were electric.

Bar chart showing the cumulative number of battery-electric cars in the UK (2016 to 2022). Source: Zap-Map
Cumulative number of battery-electric cars in the UK (2016 to 2022 YTD). Source: Zap-Map

This optimistic outlook relies on a simple strategy. In 2006, Elon Musk unveiled his “Master Plan”

  1. Build a sports car
  2. Use that money to build an affordable car
  3. Use that money to build an even more affordable car
  4. While doing the above, also provide zero emission electric power generation options

This strategy – reducing costs as low as possible so anyone can access your product and market – proved remarkably successful for Henry Ford, one of the founders of the fossil-fuelled automobile industry. Just as Ford’s strategy was a critical step towards global access to private, fast and reliable transportation for the first time, we are racing towards the time when green, efficient electric cars are accessible to us all.

In the meantime, grants are available for people who meet eligibility requirements – further decreasing the price of using an electric car:

Click here to learn more about these grants.

The future of affordable, accessible electric cars is nearly upon us. But, in the meantime, a salary sacrifice scheme can help you save up to 50% on a new electric vehicle. Check out how loveelectric can make that happen.

A connected electric network

Plenty has been written about the UK’s EV infrastructure. With reports of a disjointed and inaccessible electric network, those looking to switch to electric are understandably wary about whether an electric car is really for them.  

There’s no denying that our infrastructure has some catching up to do. For example, in 2021, EV sales increased by 76%, while the charging infrastructure increased by only 33%.

This issue is not localised to one particular area of the country, with both urban and rural communities struggling to access charging infrastructure. Rural communities, in particular, are often subject to greater electricity costs and are overlooked when building public charging spaces. 

While pricing for electric cars is expected to drop as the market matures, we can’t avoid the impact of rising electricity costs on wallets – especially in the more remote areas of the UK. 

Those in rural areas often pay a higher premium for electricity, meaning people charging an electric car in remote areas will take a bigger hit on their wallets. Energy prices vary by region due to several factors, including the number of customers an energy company has and the charges imposed by the energy supplier in your area.

However, thanks to the recent energy price cap announcement, the jury is firmly back in court: it is still cheaper to charge your EV than fill a petrol or diesel tank.

People living in high-density urban areas also face struggles when it comes to charging their electric cars. For example, 33% of car owners across the UK – and 60% in cities – don’t have access to off-street parking, limiting the ability to access safe and secure charging.

However, the number of public charging points is increasing yearly, with the latest figures showing 30,146 charging points across the UK. Councils are providing local charging points near high-density housing, and manufacturers are contributing to the developing network to ensure the infrastructure keeps up with EV demand. Many of these charging points are at service stations, increasing those spaces' accessibility, safety and familiarity.

A bar chart showing the number of public UK charging points by speed (2016 to 2022). Slow, fast, rapid and ultra-rapid chargers are showing in different colours. The chart shows a steady increase in charging points year on year. Source: Zap-Map
Number of public UK charging points by speed (2016 to date). Source: Zap-Map

Even in the unlikely scenario that there isn’t a public charging station nearby, even the most nervous driver can drive without fear. Long gone are the days when batteries could support a range of just 85-90 miles. Instead, with the best-performing EVs granting ranges of over 300 miles, you can explore even the most remote parts of Scotland without a care in the world (except for the environment, that is!). 

So, electric cars are getting cheaper, and better infrastructure is rolling out across the UK. But what happens when you physically can’t access that infrastructure or need to make costly modifications to your car so you can drive it? Let’s talk about disability and EV accessibility. 

Physical accessibility is on the rise

Like many other drivers, research in 2021 by Motability and Designability found that disabled drivers in the UK also want to transition to electric. With one in five people in the UK living with a disability, Ricardo Energy & Environment estimates there will be 2.7 million disabled drivers in the UK in 2035. Of these 2.7 million, the researchers estimate that up to 1.35 million, or 50% of these drivers, will be at least wholly or partially reliant on public charging infrastructure, meaning they will need to charge their vehicle away from home.

And, as we’ve seen, charging away from home poses its own problems. For wheelchair users and those living with disabilities, public charging points exacerbate these difficulties - and create new ones.  

Indeed, Motability and Designability found that the lack of accessible charging (and cost!) put disabled drivers off electric cars. They highlighted three key barriers for disabled drivers to transition to EVs: 

  1. More accessible parking near charging points
  2. The accessibility of charging points themselves, including handling the charging cables
  3. Unclear signposting about accessible charging stations

The lack of accessible charging solutions prevents disabled drivers from adopting electric cars. Not only is this a problem for disabled drivers, but it also holds back the urgently-needed transition to a fully electric fleet. 

On paper, an EV is an excellent choice for those with limited mobility. With more safety features built in as standard – such as lane keep assist and adaptive cruise control – EVs are leading the charge. In addition, as all electric cars are automatic, they are also easier to adapt for people with reduced mobility, such as installing an accelerator on the steering wheel. 

However, echoing Motability and Designability’s research, Falchetta and Noussan (2021) found that, while we have witnessed a considerable expansion of the UK’s charging network, stark inequalities persist across the country, both in terms of accessibility and of the charging points available to users.

Unfortunately, accessibility and inclusivity have not been at the forefront in designing much of the UK’s EV infrastructure. Motability conducted research into the accessibility of EV charging infrastructure, estimating that there could be 1.35 million disabled drivers or passengers reliant on public charging infrastructure by 2035 – yet many may not be able to use it. 

People with mobility issues may struggle to access public charging infrastructure as it is simply not as easy as refuelling at a traditional petrol station. Charging poses its own set of challenges. While charging at home offers more control and options to meet accessibility needs, people have far less control over charging points when out and about. Cables are heavy, and chargers are often mounted on a kerb. Safety always takes priority with UK legislation, so you’ll notice that public chargers tend to be ‘up’ on a kerb. This is fine when you’re non-disabled, but it can be a nightmare if you’re a wheelchair user.

A man in a wheelchair connects a public charging point to his electric Kia. The charging point is mounted on a kerb. Image credit: Motability
Image credit: Motability

However, the future of accessible public charging zones looks promising. In 2021, Scottish and Southern Electricity Networks (SSEN) published a report outlining the key barriers and challenges in EV transition for disabled motorists. 

As a direct result of the research, SSEN will bring together stakeholders – including manufacturers and governments – to assign responsibilities for working towards a fully accessible EV infrastructure. 

Not only are accessible public chargers being investigated, but so too are home charging and using EVs as a backup power supply for a house. 

Critically, this project will identify the solutions required to overcome current accessibility issues and support disabled drivers in the EV transition. 

Looking towards the future

The future of EVs is accessible and affordable for all. With prices for electric cars forecasted to drop, infrastructure being built at an ever-increasing rate and clear plans to ensure physical accessibility to the network, it is clear that the time when everyone can access an electric car is closer than ever before. 

In the meantime, we’re helping get as many people out of their fossil-fuelled cars and into electric. Salary sacrifice is the most accessible and affordable way to get behind the wheel of an electric vehicle. There's no deposit required, and it is up to 50% cheaper than traditional leasing.

Not only is it great for employees, but it’s also a no-brainer for employers. An EV salary sacrifice scheme offers unrivalled value to employees, helping attract and retain the best talent in your industry. It is also cost-neutral for the company and bolsters green credentials.

The electric vehicle revolution is underway. Check out why we loveelectric – and why we think you should too!

How Salary Sacrifice Car Insurance And Maintenance Works

Corporate
Financial

If you’ve been searching for relevant information on car salary sacrifice insurance, you’ve probably seen there isn’t a lot of comprehensive information out there. You might be left with several questions unanswered, such as:

  • Do you get car insurance with a car salary sacrifice scheme? 
  • Why is it more expensive than regular insurance?
  • Can an employee use their personal insurance?
  • Is the insurance fully comprehensive?

We understand that insurance can be tricky as there are many variations and subclauses to keep into account. The last thing you want as an employer or employee is to be dealing with complicated insurance claims or not knowing your responsibilities concerning the car.

This article is not financial advice. For personalised advice, talk to a financial or legal advisor.

In this article, we'll cover:

Note: Looking for someone to seamlessly handle all the hassle involved with insurance in a car salary sacrifice scheme? Get started with loveelectric for free.

Here's what's included in loveelectric’s car insurance and maintenance package

Before we dive into the specifics, it’s worth noting that at loveelectric we specialise in providing an electric car salary sacrifice scheme. We’re licensed by the Financial Conduct Authority (FCA) and are focused on being transparent with our fees, policies and business model, so you feel you understand our process all throughout.

You can learn more about loveelectric’s story here: Electric Cars are Expensive. Here’s How We’re Democratising Electric Vehicle Access At loveelectric

So what’s included in your car insurance with us? Firstly it’s worth mentioning that it’s not mandatory to take our partner LLG’s insurance policy when signing up to the salary sacrifice car scheme. 

However, if you are to use your own insurance, it must be fleet insurance, not personal insurance. This is because the business is being insured, not the employee. To comply it must be fully comprehensive and cover all named drivers. 

Here’s what’s included in your insurance agreement with LLG:

Fully comprehensive car insurance for worry-free driving

Most salary sacrifice schemes offer fully comprehensive car insurance, but not all are created equal – we’ll cover why that is further down.

As part of your agreement with loveelectric, you’ll get a maintenance package that’s covered by the leasing company. This cover includes:

  • MOTs
  • Repairs
  • Maintenance
  • Servicing
  • Accidents
  • Breakdowns
  • Roadside assistance
  • Replacement tyres for wear and tear
  • Cap clean cover

Optionally, you can also include:

  • Gap protection

We’ve recently added gap protection. This is an added protection mechanism in case the car is written off and the insurer's valuation doesn’t match the leasing company's vehicle valuation. Having gap protection will cover the difference, so the company that has leased the car won’t be liable for having to pay this difference to the leasing company.

The quotes shown on our public website already include early termination protection, Benefit in Kind tax (BiK tax) and insurance accounted for in the price. However, the insurance figure on the public site is more of an average. You’ll get a more accurate number once your employer signs up and you’ll be able to input your salary, postcode, annual mileage and contract length.

Driver handbook and account manager so all information is easily accessible

When you sign up, we provide you with a driver's handbook and account manager. The driver handbook outlines almost everything the employee and employer will need to know about their responsibilities to the car and the insurance, so you’ll always know what to do in specific circumstances.

How salary sacrifice car Insurance works

Inside is a helpful list of contact details of who to call in any event, from MOTs to roadside assistance. 

If you are struggling to figure anything out or need more information, you’ll always be able to reach out to your appointed account manager. They’re there to help and are with you throughout the process.

5-star rated insurer to give you peace of mind

Lloyd Latchford Group are a specialist insurance broker that have a panel of 5* rated insurance companies. At loveelectric, we’re an appointed representative of LLG. 

LLG cover over 700 car fleets and have been working in the salary sacrifice car insurance industry since 2007. They’ve also partnered with two of the UK’s biggest fleet providers, Aviva Insurance and NIG insurance, so you can be sure we have everything in place to keep you secure. 

Once signed up with their fleet insurance, you will receive a copy of the insurer’s fleet management and insurance policy. It’s a helpful document that goes into more detail than the driver handbook on all the legal terms.

We offer hassle-free insurance because it can all be included in one price and, despite the higher premiums, also benefits from the same tax savings as the lease cost.

Why do salary sacrifice schemes have to use fleet insurance?

Three of the main questions we always get when it comes to motor insurance are:

  • Why does it need to be fleet insurance?
  • Can I use my own personal insurance?
  • Why is salary sacrifice car insurance more expensive?

There are two reasons you have to use fleet insurance:

  1. You can’t use personal insurance because the lease is with the employer, not the employee. In this case, the employer is insured and therefore has to take out business insurance. 
  2. To satisfy HMRC company car tax rules, the policy must cover full commercial business use (business use & commercial travelling) to be considered an employee benefit and therefore eligible for salary sacrifice.

Employers that have a salary sacrifice scheme via loveelectric can choose to use our fleet insurance, or use their own fleet insurance via a separate partnership.

As an individual, you could try and organise your own fleet insurance, but you’d most certainly run into many problems. For example, to qualify for fleet insurance, you’d need a minimum of 2-3 cars, not to mention all the paperwork you’d have to do.

Business fleet insurance is typically more expensive than personal insurance; however, the benefit is that the company car can be used for both personal and company use. On top of that, the fleet insurance can still be salary sacrificed, so putting all the costs together, it still works out cheaper than a standard lease or PCP arrangement

The other main reason this insurance is more expensive than what you’re used to is that EVs are very fast. They’re also relatively new, so insurance companies don’t have much data yet and err on the side of caution.

The fleet insurance we provide is a fixed rate for the duration of the lease (up to 4 years). It's rare to get an insurer to commit to a price for longer than a year with the current rate of inflation, which gives you the certainty of the cost not changing. loveelectric does not add any fee on top of the insurer's quote.  

loveelectric’s car insurance and maintenance details

After signing up to loveelectric, read through the driver's handbook carefully to understand all the terms. Before joining the scheme, you be will required to sign it as an agreement. We will also provide you with the insurer's fleet policy, which will cover all the topics below in more detail should you wish to read it.

In many cases, exclusions and terms apply, so always read the fine print so you fully understand.

Keep in mind that all the below explanations have exclusions. For more information, check out our webinar or insurers policy.

Here’s what’s included in the insurance:

Glass repair and replacement

You are covered for glass repair under certain circumstances. You can contact the leasing company if you would like them to take over any administration and organisation involved in repairing and replacing glass, including windscreens and body glass, but excluding mirrors and sunroofs. The cost will be recharged to you in full.

Tyres

You are covered for tyre damage as a result of fair wear and tear (including puncture damage which is not the result of a traffic accident)

Accident management

In certain cases, the insurance will pay for damage to a motor vehicle for accidents. In the case of an accident, note all relevant details of others and don’t admit liability or blame at the scene.

Damage to your car

Any damage sustained to the car must be reported to the insurance company or repaired at your own expense. You can refer to your BVRLA Wear and Tear Guide in the insurer's policy for further information.

In the event that the car is written off, you must contact the leasing company using the details provided on page 2 of the driver handbook.

You’re covered for damage to a motor vehicle caused by fire, lightning or explosion. You’ll also be covered for removal and delivery costs, replacement of locks and misfuelling. We will pay the reasonable cost of taking a motor vehicle to the nearest repairer after the damage and returning it to you when the repairs are completed.

Here’s what’s included in the maintenance package with the leasing company:

Repairs & servicing (MOT)

Routine maintenance and servicing costs are covered in the scheme, along with breakdown assistance and recovery.

You are responsible for completing the car’s MOT within the appropriate deadline (where required). This will apply to you where your lease term is for more than three years.

Contact your local garage, or follow the instructions at the beginning of the driver handbook. The garage will invoice the car funder directly.

Breakdown cover and roadside assistance

Our breakdown cover only applies to the UK. You’ll have to contact loveelectric in advance to arrange cover abroad if you travel abroad.

You’ll need to contact the leasing company to arrange recovery from our breakdown recovery partner. Or you can contact the AA directly.

Legal costs

The insurer will pay any legal costs incurred with our written consent regarding any accident under section 2 of the policy (made available to you after you sign up).

This cover includes representation at any coroner’s court or fatal accident inquiry and defending any proceedings arising from death or in a Court of Summary Jurisdiction.

The insurer will pay the costs to help the insured person claim their uninsured losses from the person who was to blame for the accident. The most we will pay for all claims, including any appeal or counterclaim that arise from the same accident, is £100,000 (including VAT).

Theft

Suppose the vehicle is stolen and not recovered or declared a total loss. In that case, a courtesy car is provided for up to 14 days or until a settlement offer is agreed (whichever is earlier).

The insurer will pay for motor vehicle damage, theft, or taking without lawful authority.

Personal accident benefits

Suppose any employees are accidentally injured while travelling in or getting into or out of a motor vehicle, resulting in death, loss of sight or loss of limbs. In that case, the insurance will pay a certain amount direct to the injured person, their legal representative or their estate.

Liability to others

The insurance will cover the costs and expenses you legally have to pay for damages in respect of death, bodily injury or damage to property to any person. This is subject to a limit of £5,000,000 for any one or series of claims arising from any event.

Medical expenses

The insurance will pay up to £500 per person for medical, dental, surgical, or other remedial attention, treatment or appliances for each person if they are injured in an accident involving a motor vehicle.

Personal belongings

Insurance will pay up to £500 for damage to clothing and personal belongings caused by fire, theft, attempted theft or accident while they are in a motor vehicle.

How loveelectric’s sign up process works

Once you fill out an enquiry form, we’ll guide you through the process to get set up with a salary sacrifice scheme. If you’re an employee and would like your employer to sign up, you can refer them and we’ll get in touch with them. 

As an employer, you will be sent an application form and will receive a brochure to help get you up to speed.

Depending on the company size and specific requirements, you will receive a personal call or do a group webinar. This is to answer any of your initial questions, perhaps questions you couldn’t find answers to online. 

The next step is to get your company credit checked by our leasing partners, to ensure they can offer a car lease. This can take a few days, but in the meantime, as an employer you can set up a demo account to start browsing cars on loveelectric.

Once the credit check is complete and successful, as an employer you will be required to sign the service agreement. We’ll send you a unique link to the private web app. From here,  employees are free to browse and place orders with prices based specifically on their profile details. As the employer you will be required to approve any employee order.

How salary sacrifice car Insurance works

Once the employee is ready to place an order on a brand new car, they will see an option to add insurance or not. 

How salary sacrifice car Insurance works

As an employee, you’ll notice there can be a slight difference in the public price compared to the private web app prices given by the unique link. This is because the quotes via the app will be personalised based on your postcode, age, contract term length and annual mileage. 

The insurance cost is bundled into the overall salary sacrifice arrangement and therefore benefits from the same tax savings as the lease cost with no added admin for you. 

You can have up to two additional drivers on this insurance policy, but you can only add one through the web app. You will need to email our support team for help adding the second.

Things to keep in mind with loveelectric’s insurance

We have the only insurer on the market that handles this kind of insurance and also offers dynamic integration – allowing you to easily compare and contrast prices in real time. 

The salary sacrifice scheme arrangement is a formal change to your employment contract. Once agreed, loveelectric will provide an amendment agreement, as the driver will have a new agreement with their employer to forego a portion of their gross salary for this benefit.

A few other things to keep in mind:

As a driver, you need to be aware of your responsibilities 

The driver handbook should be your go-to resource to help you understand how the scheme works and what your responsibilities are. We’ve outlined a few key things to keep in mind with the responsibilities below.

You are responsible for:

  • Advising us of any change in circumstances during the term which could affect your insurance.
  • Ensuring that the car is kept safe, supervised and in your custody until the end of this arrangement.

Not complying with these responsibilities could result in a breach of your agreement with us. This means you could be liable for additional costs, which will be deducted from your monthly salary.

Make sure you’re eligible

There may be restrictions on the car you can choose based on your age (insurance requirements determine this).

To be eligible for this insurance you must be:

  • A permanent employee, paying income tax and national insurance contributions, of a company that has signed up to the loveelectric scheme.
  • Able to afford the salary sacrifice, taking into account the national minimum wage and payable income tax. 
  • Not planning to retire or resign during the term of the scheme.
  • Not reaching retirement age during the term of the scheme (considered to be 67 for the purpose of this scheme)
  • No claims or cat A convictions over three years old 
  • Permanent UK residency 
  • No more than six points on your license

Reconfirm any of these points with your account manager because we can make exceptions on some points. For more details about this, you can read through the eligibility policy.

Not every repair is covered

The car needs to be fully repaired by the time it is returned. So make use of the insurance before this time to avoid fees. 

Repairs not covered by the maintenance service included with the scheme

  • Fluid top-ups
  • Missing trim and items
  • Locking your keys inside the car or losing your keys
  • Running out of charge for the car
  • Abusing the car
  • Accidental damage to the car (where this is not covered by the insurance policy)

There is some amount of wear and tear allowed in this policy, but anything that falls outside this scope will be considered unreasonable wear and tear and will not be covered. See the insurers policy for more details on this.

A few other items are not included

Any parking tickets, congestion fees and other fixed penalties fall outside of the insurance cover. 

The insurance only covers you in the UK. For trips abroad, it is possible to get additional territory added on. Please contact your account manager for this.

The following countries are covered for driving abroad:

      a. all member countries of the European Union,

       b. Andorra, Bosnia & Herzegovina, Iceland, Norway, Serbia and Switzerland (including Liechtenstein).

However, drivers must call loveelectric to extend their cover when taking the car abroad. The countries below will be covered, but we need to make sure they are within their policy limits, which is no 1 single trip exceeds 30 days and they can only go abroad for a max of 90 days in any 1 insurance period. 

The last things to keep in mind are driver abuse, insurance excesses and charging costs are all not covered in this policy.

Insurance questions to ask when signing up to a salary sacrifice scheme

If you sign up with a different salary sacrifice scheme provider, you want to make sure to understand all the term as some companies won't give you such a transparent view of their insurance policy.

First of all, find out if insurance is included in the monthly lease price. The last thing you want is to think you know what you’re paying for the month only for extras to be added through with hidden fees.

A few questions to ask when picking a salary sacrifice scheme:

  • If the insurance is included in the monthly price?
  • If they have gap protection and who is liable if there’s a difference between the leasing company's and the insurer's valuation of the car?
  • Is the premium fixed for the duration?
  • Can you add on additional drivers? If so how many?
  • What are the age restrictions on the policy?
  • What is the excess amounts?
  • Are you covered for both busines and personal use?
  • Who their partners are?
  • If they are specialists and know everything there is to know about fleet insurance and salary sacrifice schemes?

We recommend reading the following article for more information: Best Salary Sacrifice Car Scheme in the UK — Which One is Best for You?

FAQ on loveelectric’s car insurance

We’ve added some frequently asked questions to save time, but if you still have something unanswered join our webinar where you’ll be able to ask questions and get responses live.  

Can I protect my no claims bonus?

Our insurance broker can provide you with a letter, on request, confirming your accident history during the scheme, which you can use to protect your hard-earned no claims bonus.

Many personal car insurance companies accept this when considering no claims continuity, subject to the detail of the history.

Can I get a salary sacrifice car without insurance?

We do have a few companies that have elected to get their own fleet insurance policy. As the business is the customer of the lessor, rather than the employee, the vehicles need to be insured in the name of the business and fully comprehensive - if you have/would like to source a fleet policy you are more than welcome to use it, otherwise we are able to bundle it into the gross quotes for the employee - for the avoidance of doubt, you cannot use personal car insurance with any EV Salary Sacrifice scheme. 

Can an individual get fleet insurance?

As an individual you cannot get fleet insurance as the policy needs to be in the name of the business. You also need to have a minimum of 2 - 3 cars to qualify as a fleet.

By bundling the insurance with loveelectric, it's included in the price, so there is also a benefit from the tax saving on the insurance.

What happens if you have an accident in the car?

Refer to the numbers given in the handbook. In there, you will find every contact you will need for all scenarios. Therefore, it’s worth keeping a copy in the car for such occasions. 

Will I get a courtesy car in the case of a breakdown?

In the event of an accident and regardless of blame, where the car is repairable, a courtesy car will be provided. 

That courtesy car comes from the repair agent, which is organised by LLG’s Accident Management partner, which is FMG. The courtesy car will be for the duration of the repairs and until such time that your customer collects their car from the repair agent. 

Equally, if it is an at fault accident then FMG will put the driver into a like for like courtesy car and claim the costs back from the other party. So, if they have a Tesla they will try and put them in a Tesla, or something similar.  If the driver is at-fault, then they will get the car that the garage has, which is typically a Fiesta size car.

If the car is a total loss, and therefore the car can’t be repaired, but we can hold the other person responsible, then again, FMG will provide a car of similar standard to what they had.

If the car is a total loss and it is a fault claim, or the car is stolen and unrecovered, then they will not get a courtesy car, as that is not covered under the policy and is not covered under almost all insurance policies in the UK. However, we are talking to an insurer about the possibility of offering a mobility solution for this going forward, and it could be available in around 3 months.

Does the insurer cover any sort of return of the new vehicle?

Not outside normal wear and tear. If in doubt, look at the driver handbook, which covers how to return the car in more detail. 

Does the scheme cover all electric cars?

From our website you can see it covers a wide range of vehicles from small, family and luxury vehicles. However, it does not cover electric motorcycles. 

What's the excess?

If there is an insurance claim, you are responsible for the payment of the excess. This payment will be collected by the repairer of the vehicle or deducted from your salary through payroll.

Examples of the type of excess you might pay:

  • Accidental Damage - excess of £250 for a driver over 24 years of age.
  • Fire, Theft and Malicious damage -  excess of £250
  • Misfuelling excess of £50
  • The excess will not apply if the glass is repaired and not replaced.

What’s the minimum age for additional drivers?

The minimum age for drivers is eighteen and the maximum is 75. Bare in mind that it will be more expensive to insure eighteen year olds. 

loveelectric’s salary sacrifice scheme insurance: don’t stress about insurance again

We hope this article has successfully answered most of your insurance questions on costs and features.

From what we can see, no other electric car salary sacrifice scheme is as transparent about its insurance costs and policy. At loveelectric, we offer worry-free motoring. We take care of everything so it’s as simple as clicking a button for you.

Although we’ve touched on many topics in this article, it’s difficult to cover every minute detail of an insurance manual without it being overbearing. So if anything doesn’t make sense, please let us know or feel free to ask questions in our community.

Why are Electric Cars more expensive?

Financial
Electric Vehicles

An unfortunate fact about switching to an all-electric car, is that they’re typically more expensive to buy or lease than an internal combustion (ICE) equivalent.

However, making the switch to an electric car is often far more affordable than most people think. Especially if you utilise a salary sacrifice scheme. This slashes the monthly cost down to a far more attractive price than purchasing outright or a traditional lease deal. Even with the electric premium and a rise in energy cost - electric cars are still cheaper to run than a traditional ICE vehicle.

So why are electric cars more expensive? We’ve identified three key factors:

  1. Batteries are very expensive
  2. Demand still far outstrips supply
  3. The leasing industry is still skittish about residual values for electric cars

Below we’ll have a look at the large upfront cost of the battery within an electric car, how supply chain issues are pushing prices up and why leasing companies still charge such a premium on electric cars.

That’s actually why loveelectric was created. We wanted to get as many people behind the wheel of an electric car as possible; with minimal fuss at the most affordable price point.

1) A battery for an electric car costs £5,600 on average

Batteries remain the chief reason that electric cars demand such a cost-premium. Even though the first iteration of an electric vehicle was created all the way back in the 1830s, the development of lithium-ion batteries has taken rather a long time to catch up.

Manufacturing processes are driving the price down, however a large proportion of the RRP of any electric car is to buy the battery pack within it.

Take the Tesla Model 3 for example; one of the most popular cars (electric or otherwise) on the market. A replacement battery from Tesla is £5,220 (as of July 2022). With a sticker price of £47,500, that’s nearly a tenth of the car’s entire value in just a single component. 

A white Tesla Model 3 parked head-on in a parking space
Credit: Photo by Charlie Deets on Unsplash

Why does the battery pack used in an electric car cost so much?

To begin with, the battery packs used by electric cars actually consist of hundreds of cells. To produce such a large lithium-ion pack requires lots of raw materials - some of which are precious metals and rare elements; cobalt, nickel and lithium to name a few.

Extracting cobalt and nickel from mines is a costly process, with lithium refinement requiring a large amount of water.

These processes are both costly and time intensive, however the below graph shows the rapidly declining cost of batteries over the past 30 years - dropping 97%. 

A graph demonstrating the rapid decline in battery cost from 1991 - 2018
Source: Nature: M. S. Ziegler & J. E. Trancik Energy Environ. Sci. https://doi.org/grhx (2021).

The dominance of lithium-ion cells is unlikely to change, so with further refinement and R&D - many experts predict that electric cars may actually reach price parity with their ICE counterparts by the mid-2020s. 

Renault’s innovative workaround

Battery cost may be plummeting now, but during the early 2010s manufacturers with all-electric models were faced with a problem. The battery pack represented an even larger proportion of the vehicle cost than it does today.

Upon the introduction of the LEAF and Renault Zoe in 2011, the resistance to electric cars was still high. Negative media stories were frequent. Misleading headlines include “Electric cars ‘bad for environment” and “That blissfully quiet electric car might just kill you”.

The most concerning claim to consumers was that battery packs deteriorated quickly. Coupled with a higher overall cost than petrol or diesel cars and the prospect of an electric car was far less attractive than it is now.

Some added the premium onto the sticker price, but this made cars like the Nissan LEAF nearly £10,000 dearer than its closest ICE counterpart. Although back then, electric car grants were far more generous, bringing the real cost difference down to around £5,000.

But it still represented a significant dilemma for manufacturers. Lose money hand-over-fist in the hopes of starting an all-electric revolution, or push the cost of their vehicles up into an unattractive price bracket.

A white Renault Zoe parked diagonally on a grey background
Credit: Carbuyer

Renault introduced a third way: why not lease the battery?

From 2014, all-electric Renaults were available with two options: outright purchase, or own the vehicle but lease the battery that powered it.

There were a number of perks to leasing the battery:

  • Battery health was guaranteed for the duration of the vehicle: when (if it ever did) efficiency dropped below 75%, the battery would be repaired or replaced for free
  • 24/7 breakdown cover was provided as standard
  • The lease was easily transferable to a new owner if the car was sold

This solution dramatically reduced the price of a vehicle by around £3,500 - £6,000 on the used market. It was an innovative solution and aided electric adoption for many.

However, in 2019 Renault decided to ditch the deal. This wasn’t due to lack of popularity or interest in electric cars - quite the opposite. With significantly improved residual values on their all-electric offerings, the French brand was able to offer a more competitive outright purchase price.

Family hatchbacks like the Renault Zoe are a great option for dipping your toe into the world of all-electric motoring; they’re affordable and still incredibly practical for daily driving. In fact, they can be leased via a salary sacrifice scheme for as little as a few hundred pounds a month!

Future of batteries 

Huge strides are being made to advance battery technology and ramp up production.

Battery Tech

Demand for batteries with increased ranges has led companies like Britishvolt to invest huge sums of money in R&D facilities. Its Hams Hall site in the West Midlands will be a 260,000 sq. ft. behemoth dedicated solely to the further innovation of production-ready battery cells. 

The goal is to drive the cost down by producing better performing cells on a bigger scale than currently available. This saving can then be passed onto the end user - aka. drivers - as manufacturers start paying less for their batteries. 

Once these cells are production ready, they’ll be transferred over to Britishvolt’s partner gigafactory in Northumberland where they can be created in vast numbers.

A graph showing a prediction of future battery prices
Forecasted cost per battery kWh. Source: Mauler et al. (2021)

Production and Gigafactories

Gigafactories are becoming incredibly important for the mass adoption of electric cars. A gigafactory is a battery production factory and derives its name from a large unit of energy: the gigawatt (GW). 

To put into perspective, 1 GW is equal to 1,000,000 x kilowatts (kW).

These factories are solely dedicated to producing enough battery packs to supply manufacturers. Ahead of the curve - as per usual - is Tesla. The OEM began to build a gigafactory out in the Nevada desert all the way back in 2014, with another two planned for Berlin and Texas.

Once opened, these gigafactories won’t be able to make packs fast enough. A forecast by Benchmark Mineral Intelligence has stated that Britain is going to need at least 175 GWh of battery capacity by the year 2035 to supply 3 million+ EVs.

There’s currently only three manufacturing plants planned for development in the UK. Using those, the UK’s output is due to reach a combined capacity of around 57 GWh by 2030. This may sound impressive. However it’s merely 5% of Europe’s total projected GWh capacity, compared to Germany’s enormous 34% of output. 

It’s imperative that the UK secures investment in more gigafactories. When the ban on ICE vehicles comes into effect in 2030, there’ll be a need for around 100 GWh of supply - this is equivalent to five gigafactories producing 20 GWh of energy per annum.

So, batteries remain a large aspect of an electric car’s cost. As it currently stands, this cost is then passed onto the consumer, presenting a higher upfront cost compared to their petrol/diesel-powered equivalents. 

But, battery tech is constantly evolving. Furthermore, electric cars do offer a significant reduction in running costs (lower maintenance, fuel vs. electricity) and generally work out far cheaper on a pence-per-mile basis. Even when taking into account the recent rise in energy cost, an electric car is still cheaper to run than a petrol/diesel equivalent.

What’s even better is opting to lease via a salary sacrifice scheme. This slashes the monthly cost of an electric car, there’s no deposit and everything is included in the per month figure you’re quoted! Even more reasons to loveelectric.

2) Supply and demand

If you build it, they will come. This misquoted line from an ‘80s film may have been used by inspirational Instagram accounts for years, but when it comes to electric cars it couldn’t be more apt.

The UK has officially embraced the electric car, with 1 million EVs already on the road. The problem is, the all-electric boom happened just as the globe’s supply chains were stopped dead in their tracks. This knock-on effect is still being felt by manufacturers around the world and directly impacts the cost of electric cars today.

Manufacturers can’t keep up with demand

In short, automakers simply can’t make vehicles fast enough.

This isn’t a problem just for electric cars, but all cars. All vehicles in fact. The rapid uptake in electric cars since 2019 coincided with one of the largest disruptions to contemporary society (outside of war) the globe had ever seen. The repercussions of that period are well documented and still being felt by the largest manufacturing industries today. Not least of all the automotive industry.

Bare vehicle shells on an assembly line
Credit: Photo by carlos aranda on Unsplash

Semiconductor shortage

The most impactful aspect is the shortage of semiconductor chips. Electric cars are incredibly reliant on state-of-the-art technology that can not function without the chips. These semiconductors are vital for key features, such as; advanced driver-assistance systems and enhanced connectivity (Apple CarPlay, Android Auto etc.)

Exacerbating the problem is that it’s not just the automotive industry that’s reliant on these chips. Laptops, mobile phones and wireless communication all need semiconductors to function. With the seismic shift in working culture, working from home solutions skyrocketed - thus did the need for even more semiconductor chips.

Further putting the automotive industry on the backfoot is the manufacturing process for vehicles. Most OEMs deploy a “just in time” strategy; ordering semiconductors and key components just before production of the car begins. Historically, this was to keep inventory costs to a minimum. Demand for cars actually dropped in 2020, so manufacturers pared back their semiconductor orders.

But as demand swelled, automakers didn’t have enough semiconductor inventory to ramp up production. Furthermore, other industries that didn’t rely on the “just in time” manufacturing process had procured the extra semiconductors available after OEMs reduced their orders. 

This shortage isn’t going away anytime soon, unfortunately. Experts predict that production of semiconductors won’t satisfy demand until 2024.

So - what does this mean for electric cars?

Well, if you’re looking to buy brand new - it probably means a prolonged period of higher lead times. 

However, loveelectric has direct relationships with manufacturers and the largest leasing companies in the UK. That means exclusive access to stock before it goes public at a hugely discounted monthly price.

See how much you could save - both time and money - on the latest electric cars via salary sacrifice here.

Used car market

With electric car leasing becoming a popular choice back in 2019, some of those vehicles are now coming to the end of their lease term and hitting the used market. Generally, this is good news.

A woman sitting on a car holds up a pair of car keys
Credit: Photo by Erik Mclean on Unsplash

But demand for cars still far outstrips the available stock which puts pressure on the used market.

To understand why, let’s first look at the typical leasing journey of a brand new car.

  1. The manufacturer sells the car to a leasing company
  2. An individual or business then signs a lease agreement for 24/36/48 months
  3. Once that lease agreement comes to end, the individual/business will typically sign up for a new car and begin another 24/36/48 month contract
  4. The lease company will then de-fleet that stock into the used marketplace

With traditional petrol/diesel cars, the abundance of models allows this cycle to continue in perpetuity. The story is different with electric cars.

Businesses are increasingly concerned with their carbon footprint and improving green credibility. This results in many businesses moving away from typical company cars; German diesel saloons and switching to the Tesla Model 3.

With demand only increasing, leasing companies are unable to buy enough stock from manufacturers. The effect of this is twofold:

  • Businesses and individuals alike, are simply extending/renewing their leasing contracts beyond the initially agreed term due to lead times.
  • Instead of de-fleeting stock and putting it back into the used market, leasing companies are holding onto electric cars far longer than ICE equivalents.

This pent-up demand for electric cars may be problematic for used car buyers. There’s less stock and high demand, resulting in a price increase for all electric cars that do trickle into the used car market.

3) The leasing industry’s perspective on electric cars

As we’ve discussed, electric cars still demand a premium over their fossil-fuelled counterparts. If it’s more expensive to buy, it’s more expensive to lease - that’s simple economics.

However, it’s a bit more complicated than that.

The vast swathes of people making the switch to all-electric motoring has happened incredibly quickly. Unfortunately, the leasing industry isn’t structured in a way that’s able to respond to dramatic change in buying habits, which has driven the monthly lease cost upwards.

Let’s take a look at how leasing a car actually works and why the switch to electric cars has sent prices all over the place.

A woman used the Tesla Model 3’s touchscreen
Credit: Photo by Jenny Ueberberg on Unsplash

How leasing works

Before offering a monthly price to customers, a leasing company must first calculate the residual value of the vehicle. That is, how much the car will be worth at the end of the lease agreement.

This is the most important figure for any leasing financier; it’s the figure on which the entire lease agreement hangs from. Once the residual value is calculated, the underwriters work backwards from there and produce the monthly rates at which they can offer the car to customers. 

There’s multiple factors that affect the residual value of a vehicle. 

Key influences are typically mileage and the length of the lease term. This is why when you’re configuring a lease deal, these are the two leading information points after choosing the car.

  • Mileage has a well-documented impact on the value of a vehicle; the general rule being the lower the mileage, the more valuable it is. 
  • The length of the lease of course dictates how outdated that particular model will be in 24, 36 or 48 months time. If a new iteration of that model is released during the lease term, by the end of the lease that model will have dropped in value.

In short, a lease is all about the risk to reduction of value.

A leasing company’s bottom line is protected by aversion to risk. This ensures profit without the potential of unnecessary fiscal loss. When it comes to salary sacrifice schemes, many providers will over-inflate their prices and pass that risk onto the employer - or purposefully obscure their pricing structure.

At loveelectric, we make our profit in a way that’s cost-neutral to the employer. It’s all wrapped up in the monthly cost of the lease and is simply a small commission based on the P11D value of the car. We want to be so transparent about our pricing that we’ve even written a blog outlining the cost to employers, drivers and a rundown of how we make our money.

Why electric cars still cost more to lease

Electric cars are expensive to lease for two reasons:

  • Batteries remain a disproportionately high percentage of an electric car’s value
  • There aren’t enough electric cars on the used marketplace 

As petrol and diesel cars have been a staple of personal transport for over a century, there’s an abundance of second-hand models filling the used marketplace. 99% of makes and models have a long lineage of previous iterations. 

A for sale sign in the windscreen of a rusty car
Credit: Photo by Hilbert Hill on Unsplash

This vast amount of data makes it incredibly easy for financiers to reliably predict the residual value of an ICE vehicle; simply look at the used market and find the same model but 24/36/48 months old with a similar mileage. 

Electric cars simply haven’t had time to proliferate the used car market yet. That makes it difficult for leasing companies to reliably predict how much an electric car will be worth in 2-4 years. To offset this risk, the monthly price of an electric car lease goes up.

Now, onto the battery.

As we’ve previously discussed, batteries are the largest financial asset within an electric car. When purchasing outright, a high percentage of the sticker price is to own the battery that sits beneath the floor panels.

Worries still remain within the financial sector around the degradation of battery packs used within electric cars. Again, this is simply due to a lack of en-masse data. There are plenty of examples that batteries suffer only minor degradation over time - a Tesla Model 3 covered 100,000 miles and lost only 10% of its capacity - which is an impressive figure.

Another factor is how quickly advances are being made to improve battery tech. When considering the leaps and bounds made over the past 3 years alone, it’s understandable why leasing companies may be skittish to assume a battery will remain as valuable 48 months later than the day it rolled off the production line.

As it currently stands, banks remain reluctant to drop leasing rates. But there is hope on the horizon. With more evidence proving batteries resist degradation and retain their value, residual prices should stay buoyant and reassure leasing companies.

Plus, leasing through a salary sacrifice reduces the monthly cost of an electric car by a huge margin. Don’t believe us? See how much you could save here.

The future of leasing an electric car

Mike Todd - head of VW’s financial services in the UK - suggests it’ll take around three to four years before there’s a drop in lease prices. This is to allow:

  • Enough electric cars to hit the used market
  • Battery degradation data to be more widely reported
  • Residual values to cement rather than remain speculative

As discussed, electric cars hitting the used market are commanding high prices due to demand far outstripping supply. For many, this means that even purchasing an electric car second-hand will remain prohibitively high.

It may sound counterintuitive, but this is good news for leasing deals.

With less risk involved in leasing an electric car, financiers are able to drop the monthly cost to a competitive level - eventually bringing them in line with the current cost of ICE counterparts. 

The BVRLA estimates 5 million vehicles on Britain’s roads are currently leased. With the impending 2030 ban of new ICE vehicles looming large for motorists and manufacturers alike, it’s an inevitability that leasing an electric car will become the most popular form of personal transportation.

By far the most affordable option, salary sacrifice slashes the monthly cost of an electric car lease compared with a traditional leasing deal. There’s no deposit and everything is included in the per month figure you’re quoted. Get in touch and find out all the reasons to loveelectric.

Salary Sacrifice Electric Car Examples: How It Works In Practice

Corporate
Electric Vehicles
Financial

When searching for information on salary sacrifice electric car schemes, you might have noticed that there aren't many real-world examples online showing the cost breakdown of salary sacrifice car schemes – but there are many articles claiming how much money you can save.

That means you might be left with some of the following questions:

  • Does my tax bracket qualify me for better savings?
  • How much does the salary sacrifice EV scheme save me?
  • How does the salary sacrifice scheme cost compare to other methods of getting an EV?
  • Can I see an explanation of the numbers behind these savings calculations?

Often, the numbers vary because salary sacrifice providers offer different packages. The premise might be the same but the figures might work out differently. 

In this article, we aim to answer your questions and show you several examples to give you a better idea of how the scheme works.

We will show different salary sacrifice electric car examples to break down the numbers involved so you can better understand real-world situations. We’ll be covering:

Examples of

  1. Someone in the lower tax bracket
  2. Someone in the higher tax bracket
  3. Standard leasing vs salary sacrifice prices
  4. Combustion vs electric vehicles (EV)

Note: If you’re looking for a low-risk way to get started with a salary sacrifice scheme and have someone help you through the whole process, then sign up to loveelectric for free.

Salary sacrifice car scheme examples: a list

At loveelectric, we’re specialists in setting up electric car salary sacrifice schemes. We work as a broker, allowing us to get the best rates on the market, and we’re also a full-service provider, which means we help you set up the scheme, answer employees’ questions and take care of payroll and all the admin required.

You can learn more about our story here: Electric Cars are Expensive. Here’s How We’re Democratising Electric Vehicle Access At loveelectric

In the following section, we take a look at some of the most important aspects when considering a salary sacrifice scheme including:

  • Demonstrating two different scenarios based on salary and the corresponding tax bracket.
  • Comparing PCP deals with salary sacrifice.
  • Taking a look at the best salary sacrifice providers out there

Example 1: A person with a £40k salary - Fiat 500 [20% tax bracket]

Let’s do an example for an employee called Simon on a £40,000/year salary, which would put him in the 20% tax bracket. He’s using a typical lease example of 48 months and 5,000 annual miles for the popular all-electric Fiat 500.

Below you can see the before and after of what this saving will look like on Simon’s payslip, demonstrating clearly where the savings come from. The example is from a salary sacrifice scheme with loveelectric.

Simon’s electric car lease quote from loveelectric is (gross sacrifice amount) £366 per month.

With the salary sacrifice scheme, the net cost to Simon is £255 per month

The difference in net pay is £255, which is effectively the price that Simon will pay to lease a brand new electric car. In his case, he’s received a 30% discount on the standard lease price.

simon salary sacrifice electric car example

Here’s what the numbers look like on his payslip:

Simon’s Old Payslip

salary sacrifice electric car payslip simon

Simon’s New Payslip

salary sacrifice electric car new payslip

Although the lease costs £366 per month, he’ll only see a net cost of £255 from his salary since the lease is paid before tax.

Example 2: A person with a £100k salary - Fiat 500 [40% tax bracket]

For this example, we’ll pick another employee called Jenifer and see what her payslip calculations look like for the same vehicle but on a £100,000/year salary. This puts her in the higher 40% tax bracket.

Again, Jenifer has a typical lease example of 48 months and 5000 annual miles for the electric Fiat 500. 

The quote Jenifer got on the loveelectric site for the standard lease price (gross sacrifice amount) is also £366 per month.

But through tax savings, the net cost to Jenifer is £217 per month. Because of her higher salary, she’s saving up to 40% on the standard lease price.

jenifer salary sacrifice electric car example

Below you’ll find an example of Jenifer's payslip before and after taking on a Fiat 500 salary sacrifice scheme with loveelectric.

Jenifer Old Payslip

salary sacrifice electric car jenifer example

Jenifer New Payslip

salary sacrifice electric car payslip new

Looking at the table below, you get a clearer picture of the overall savings. The table shows how the 40% tax bracket benefits from even more savings than the 20% tax bracket, with £1,824 saved throughout the 48-month lease. 

We can clearly see that employees in the 40% tax bracket are paying more tax and are therefore saving more compared to those in the 20% tax bracket. 

effective costs salary sacrifice scheme

Prices correct at time of publication. Specific prices may fluctuate due to manufacturers' pricing, but the calculation in savings will remain the same.

If you're curious as to how the figures of £366 and £217 were calculated, we've included an infographic below outlining the breakdown of all the costs involved for somebody in the 40% tax bracket.

breakdown costs salary sacrifice scheme

Comparing PCP vs salary sacrifice (with an example)

A PCP (personal contract purchase) is one of the most common ways to get an electric car, so it makes sense to compare it with a salary sacrifice scheme. 

People like PCPs as they are cheaper than taking out a loan to buy a car outright. It also offers flexibility in the way you have different options at the end of your contract, including buying the car or trading it in.

There are a few things to note when comparing PCP to salary sacrifice. The first is that maintenance and insurance are not included in a PCP. Also, if you go down the PCP route, be prepared to pay the upfront cost of a deposit. 

With a PCP, you make monthly instalments like a salary sacrifice scheme. In the table below, we’ll look at how the two compete with each other for the same car model, a Vauxhall Corsa E. 

pcp vs salary sacrifice scheme loveelectric

The table above shows how it works out significantly cheaper to use a car via the salary sacrifice scheme than with PCP.

The figures for insurance will vary depending on the driver's age, postcode and salary. The figures for maintenance are based on averages and may also differ from case to case. But in general, a salary sacrifice scheme works out cheaper.

salary sacrifice vs buying vs leasing electric car

You can read this in more detail here: Electric Car Monthly Cost: How Much Does it Cost to Run an Electric Car?

Comparing combustion car vs electric car (with an example)

Perhaps you like a particular car brand and want to see how it differs from electric to combustion – or you’re still unsure if you’d like to go with combustion or electric.

In that case, let’s compare a combustion car with an electric vehicle on a salary sacrifice scheme to get the complete picture of cost savings. 

Below you can see how a salary sacrifice Vauxhall Corsa E with loveelectric and the combustion version of a new Vauxhall Corsa compare to one another.

salary sacrifice vs personal lease loveelectric

You can see from the example above that the salary sacrifice scheme with loveelectric works out cheaper with a total saving of £4,032.6 for the entire lease

Example of the fuel cost difference between a combustion car and an electric car

In general electric cars are cheaper to run than their petrol counterparts. An example calculated via nextgreencar using the same Vauxhall Corsa model with 5000 annual miles shows the price of a petrol Corsa at £721 per year and the electric Corsa-e at £473 per year.

That's a 50% saving in your yearly vehicle fuel cost. 

Comparing different salary sacrifice scheme providers 

At loveelectric, we're specialists in the electric car salary sacrifice market. But we also understand that we might not be a good fit for everyone, which is why we've put this comparison table comparing each provider on the market.

For a comprehensive breakdown of how these providers compare against each other read this article: Best salary sacrifice car scheme in the UK.

What you need to know about salary sacrifice schemes

When it comes to tax and salary sacrifice schemes, there are a few key things to keep in mind.

How the HMRC views salary sacrifice schemes 

The government has made it very clear that it wants to discontinue combustion cars in the near future. In fact, the sale of combustion cars will not be allowed in the UK after 2030. As HMRC is a branch of the government, it has adopted some of its systems to promote more electric vehicle use. Most notably: the salary sacrifice scheme. 

With this scheme, employees can sacrifice a part of their gross salary in exchange for lease on an electric vehicle. This can translate into a decent amount of savings – which differs depending on your tax bracket. To find your pay tax bracket visit the HMRC website.

The main terms you will need to know about with your salary sacrifice scheme are: 

  • Benefit in kind tax (BIK)
  • Income tax
  • National insurance contributions (NIC)
  • Value added tax (VAT)
  • Road tax

Learn more in this blog: Electric Vehicle Salary Sacrifice: All Your Questions Answered (With Examples)

How salary sacrifice affects your benefit in kind tax (BIK)

Benefit in kind tax is the tax you must pay if you get employee benefits from your employer. It can be pretty high if you get a combustion-engined vehicle, up to 40% of the P11D value of the car. This is because, for vehicles, the tax is based on CO2 emissions. 

However, with the salary sacrifice scheme, electric cars only have a benefit in kind tax of 2%. To encourage more electric vehicles to be used as benefits, the government has put a 2% limit on BIK rates until 2025.

What could cost you upwards of £2k a year with a combustion car, can now be around £500 per year with an electric one.

How salary sacrifice affects your national insurance contributions (NIC)

You’re probably aware that NIC is used to pay for certain benefits you get while living in the UK, such as a pension, healthcare and social care.

With an electric car salary sacrifice scheme, you forgo some of your salary for a brand-new car. This means you will earn less over the year, and hence you’ll have less in NIC to pay. 

How salary sacrifice affects your income tax

Seeing that you will be earning less over the year, your income tax will be affected in the same way as your NIC - you'll be paying less.

You pay for the car out of your gross income, so you will end up paying less tax, and all of these tax reductions are HMRC approved.

Other charges to note

With electric vehicles, there is no road tax or congestion charges. As the employer is the one who takes out the lease, the employee will not pay any VAT. It’s not all bad for the employer though, as they can even claim 10% of this VAT back. 

With most salary sacrifice schemes, you do not have to pay an upfront deposit compared to buying one.

Example of a driver order form with loveelectric

By now, you should have a better understanding of the pricing involved in a salary sacrifice scheme. As the last example, we’ll now look at what a typical driver order form looks like with loveelectric.

The process looks like the following:

  1. If you’re interested in signing up loveelectric, send an enquiry and we’ll set you up.
  2. If you’re an employee, we’ll talk with your employer. As an employer, we’ll request some documents and you’ll need to complete credit checks with our partner car leasing companies.
  3. Sign a service agreement if you choose to continue (no cost yet).
  4. Get access to the live web application with real-time prices based on your insurance details and place your electric vehicle order.
  5. Employee picks the car (employer must agree) and receives the order form.
  6. Employees only start paying once the car arrives.

The order form will show you a recap of what you have ordered; like the make and model of the car, any extras and what protection you get.

We do not perform a credit check on employees, but for the insurance, we will require the driver's age, postcode and annual salary. You should check to ensure all the details are correct and notify the team of any discrepancies.

As an employee, you will see an overview of what’s included in your lease:

  • How many miles per annum
  • Lease term
  • Maintenance & servicing
  • Breakdown cover
  • Early termination protection
  • Fully comprehensive insurance: (Optional)

Like the payslip example below, you’ll also get a clear breakdown of all the costs and how much you are saving through tax reductions.

The order form also serves as a legal document for the driver, as you must agree to the terms and conditions laid out and sign it. Next, you’ll see a list of declarations followed by an eligibility section. A snapshot of this can be seen below.

FAQ with salary sacrifice schemes

Hopefully, the above salary sacrifice car scheme examples have cleared up many of your queries. We’ve added a list of frequently asked questions that we hear a lot from our customers to explain further why we think salary sacrifice is so beneficial. 

Are salary sacrifice electric car schemes worth it?

Yes, getting a brand-new electric car for small monthly payments with fully comprehensive insurance is worth it. 

As seen in the payslip examples above, it is especially worth considering if you’re in the higher tax bracket. Check out this tax and financial benefits article for a more in-depth look.

You don’t pay any big deposit and you’ll pay less in NIC and income tax. You get everything you need in your monthly price, including insurance, maintenance, tyre replacements and servicing.

How much does EV salary sacrifice save? 

You can save anywhere from 30 - 60% of the cost of a standard lease. You have the added benefit of monthly savings on the cost of fuel compared to a combustion car.

In this article, we have shown real-world examples of these savings.

Is salary sacrifice a better option than buying a car?

We believe it’s far better to salary sacrifice over buying an electric car. You'll typically have far higher monthly payments when buying a car through the three most common methods (PCP, Hire Purchase or bank loan). You’ll also miss out on the tax savings.

With a salary sacrifice scheme, you’ll have far more flexibility to upgrade to a brand new electric car every few years. With the rate at which technology for electric vehicles is increasing, it’s better to always have the most up-to-date version rather than being stuck with an old model you bought.

You’ll eventually have to sell that electric car if you buy it, which is already a headache in itself. Also, you’ll be dealing with the hassle of selling into an already further evolved marketplace. Most people won’t want to buy old technology.

With salary sacrifice, there is very little work to do. All your maintenance, servicing and insurance are already taken care of. At the end of your lease, you can seamlessly just lease again for a newer model with up-to-date batteries and a longer range.

Can you own the car through salary sacrifice? 

No, with salary sacrifice you are leasing a car, not owning it, just like any other lease.

Some salary sacrifice providers will allow you to buy the car after your lease contract is over, but they won’t share the price until later on in your contract.

At loveelectric, you’ll lease the car and we don’t offer the option to purchase the vehicle. As we mentioned above, buying an electric car doesn’t always make sense since the technology is developing so rapidly. 

If you’re deciding on whether to lease or buy your car, check out our article on leasing vs buying.

Which is the best EV salary sacrifice scheme in the UK?

loveelectric stands out among the leading companies providing salary sacrifice schemes for its cost transparency, no hidden fees and fantastic support throughout the leasing process. 

To decide for yourself, check out this article on the best salary sacrifice car scheme in the UK.

What are things to consider with salary sacrifice?

You will earn less over the year by taking the cost out of your gross salary. A lower salary could mean that you have less borrowing potential, which can be based on a multiple of your take-home pay. It’s worth considering this if you plan to take out a loan via a lender while leasing on salary sacrifice.

It’s also worth noting that not all salary sacrifice schemes are the same. In some cases, they have very different cost structures, hidden fees or poor customer service. Be sure to check out online reviews on sites such as Trustpilot

Salary sacrifice schemes enable worry-free motoring

As an employee, you get a brand new electric car at a very low price. The package with loveelectric includes all the paperwork, insurance and support you need. You save even more money if you’re in the higher tax bracket.

As an employer, you get a risk-free way of deploying an excellent company benefits package that will help with company morale and staff retention. It’s also a way to help with your ESG targets if you’re looking to reduce your carbon footprint and are environmentally inclined. 

For most people, the savings sound too good to be true until they see the cost breakdown in their payslips. We hope this article did the same for you. Send us an enquiry if you’re interested to learn more and would like to sign up with loveelectric.

Are EVs really better for the environment?

Electric Vehicles
Tech

It’s impossible to imagine our lives without cars.

From last-minute road trips, to picking the kids up from school, to visiting family in the next town over, our cars are an extension of our lives. 

However, climate change has exposed our reliance on fossil fuels in how we get around. Even as public concern in combating climate change grows, the reality is that our lives are more and more tied to our cars and to the fossil fuels that power them. 

Road transport alone is responsible for 17% of global greenhouse gas (GHG) emissions and has grown by 2-3% each year over the past 20 years (Mercure et al. 2018). Many are concerned that, instead of this impact dropping in line with the Paris Agreement, emissions from passenger vehicle transportation increased by 28% globally between 1995 and 2019.

There is a potential saving grace, however. Across private car ownership, public transport and truck haulage, electric vehicles (EVs) pose a significant benefit in the fight against climate change. EVs can undoubtedly take credit for improving air quality. By removing fossil-fuelled cars from our roads and the exhaust pipes accompanying them, we can reduce the quantity of toxic fumes we emit into our atmosphere. The benefits to noise pollution cannot be understated: without the need for an engine, EVs make our urban environment more peaceful and enjoyable. 

But there is rising concern about the actual environmental credibility of EVs. Are they just status symbols? A greenwashed marketing scheme? Or are we simply replacing the evil we know with the evil we don't? 

EVs are still new to our lives, with the first mass-produced EV sold in the UK, the Nissan Leaf, rolling into driveways in 2011. There is still plenty to learn about EVs' positive and negative impact on our lives and the planet we call home. 

loveelectric was born out of a vision to strive for a world that future generations will enjoy as we have. Our pursuit of this vision drives everything we do. We want to help build a new story: one where the wind and sun power how we travel, and everyone can access clean, safe, green transport. By making EVs accessible to all, we can ensure that everyone can access a safe, efficient car that treads lighter on the world around us.

Join us as we dive into some emerging myths around EVs and their environmental credentials.

Note: if you’re looking to get started and reduce your carbon footprint now, choose your brand new electric car and get a sample quote instantly by sending an enquiry.

Myth #1: Electric cars are just as carbon-intensive as petrol or diesel cars

Left: Black and white car with smoke coming out of the tailpipe. Right: Colourful car with electric charging port and flowers in the foreground.
Image credit: James Upright

In the 1890s, the Global North's largest cities faced a mounting problem. For thousands of years, humans had depended on horses for transport and moving goods. Yet, as more people flocked to cities and the dependency on horse-drawn vehicles grew, so did the manure on the streets and the health problems that followed.

It was an environmental disaster: and for advocates of the newly-introduced steam engine, internal combustion engines (ICEs) were an obvious solution to the pollution literally building up on the streets.

A black and white photo of one of the last horse-drawn carriages in New York City. Two white horses draw a carriage in New York, sharing the road with automobiles and a tram. c. 1917
Source: The Brown Brothers, via Wikimedia Commons

Of course, we all know how that story has played out. History is littered with humans solving one problem while creating another – so it's no wonder some people are sceptical about EV's green credentials. 

The truth is that all cars - internal combustion, hybrid, electric or hydrogen - have an upfront carbon cost. All vehicles require energy to produce: from extracting materials to the water needed in the manufacturing process to the electricity used to power the warehouses.

Bar chart comparing the lifecycle greenhouse gases in the Nissan Leaf and Conventional Vehicles
Lifecycle greenhouse gases: 2019 Nissan Leaf vs Conventional Vehicles (average ICE and hybrid). Upfront carbon cost represented by ‘other manufacturing’ and ‘batteries’. Source: Carbon Brief (2019)

Replacing an ICE with an EV causes a spike in carbon emissions that can take 2-4 years to overcome by the GHG savings from the EV. As we’ll see, the battery manufacturing process is carbon-heavy, with electricity used in battery production accounting for roughly half of an EV’s total carbon emissions (ICCT, 2018). 

Due to this upfront carbon cost, many advocate for drivers to use their current ICE until the end of its life cycle before looking to switch to electric. However, there is a buoyant market for used ICE cars. Even with the high upfront carbon costs, switching to electric as soon as possible reduces overall emissions, so long as your current ICE returns into the market for the remainder of its life span. 

Over its lifetime, an EV will produce significantly less carbon emissions than a typical internal combustion engine (ICE) car – even when considering the relatively high emissions produced in the battery manufacturing process. For example, in 2018, a typical EV created 50% less carbon emissions than an ICE over the first 150,000 km (approx. 93,000 miles) of driving (Ahmadi, 2019) - though this can vary from 28% to 72% depending on local electricity production (EEA, 2021). 

Replacing ICEs with EVs will help alleviate the most pressing environmental problem: GHG emissions from burning fossil fuels. However, no one could have foreseen this catastrophe in the making when replacing horses with ICEs – so what potential issues could we be overlooking with EVs?

First on the checklist is batteries.

Myth #2: Lithium-ion batteries are just as bad for the environment as fossil fuels

Rechargeable batteries are critical for us to transform into a climate-neutral society. Battery technology continues to improve in leaps and bounds, particularly as we have to ensure that EVs go further and faster for lower costs.

A graph showing the forecasted cost per battery kWh. Source: Mauler et al. (2021)
Forecasted cost per battery kWh. Source: Mauler et al. (2021).

EV batteries may have a relatively high carbon cost, accounting for roughly half of an EV’s lifetime GHG emissions, but they offer the opportunity to maximise energy efficiency within a closed-loop system. What does this mean? While fossil fuels can only be burned once and must be replaced regularly - and at an increasingly alarming cost to the consumer (Bloomberg, 2022) - batteries can be recharged over and over again. And at the end of their usable life, manufacturers can use these batteries to build a brand-new battery pack or reuse them within the electricity grid.

Lithium-ion batteries are the battery of choice for EV manufacturers. They are composed of cells in which lithium ions move from the negative electrode to the positive electrode during use and back again at charging points. Battery tech is constantly evolving, getting lighter and more energy-dense (i.e. squeezing more miles of range into the same battery size).

A common misconception is that the materials required for lithium-ion batteries come from questionable and unsustainable sources. While it is true that there are challenges in transparency and sustainability in the battery supply chain, the UK Government has committed to securing a transparent, sustainable and ethical supply of raw materials, protecting the lives and livelihoods of miners (OZEV, 2022). 

Another misconception is that batteries will need replacing during the car's lifetime. With EVs likely to have an average lifetime of 200,000 miles - 70,000 more miles than ICEs - this is an understandable concern for vehicle owners who have had to replace batteries in their old ICEs (Hua et al., 2021). However, current EV batteries have been shown to last through the car's expected lifetime without issue, and EV battery life expectancy is likely to improve further with technological advances in energy density (ICCT, 2018).

Some manufacturers have committed to improving battery life. Tesla, for example, is aspiring to create batteries to last one million miles (Impact Report, 2021, p. 67). At roughly five times the average lifespan of one vehicle, this battery improvement would distribute the carbon cost of each battery significantly, reducing each vehicle's environmental impact.

However, we’re still a little way off from EV batteries lasting for one million miles – so what currently happens to batteries at the end of their lifetime? There are three options available: disposal, recycling and reuse. 

Disposal has such a detrimental environmental impact that, in the UK, existing regulations ban the disposal of EV batteries in landfills or by incineration (OZEV, 2022). If spent batteries were to be simply discarded, the valuable materials would be wasted and may lead to heavy metals and electrolytes leaching into the ground, contaminating soil and water – all causing irreversible environmental damage. 

Instead, all batteries must either be recycled or reused. Underpinning the future of sustainable EV batteries is a circular economy model: an economic system with the goal of achieving sustainable development. It replaces the ‘end-of-life’ concept with reducing, reusing, recycling and recovering materials throughout a product's life. In the UK, battery producers must take back EV batteries free of charge and ensure they treat spent batteries at permitted facilities that meet the required recycling efficiency standards (OZEV, 2022).

Lithium-ion batteries within a circular economy.
Lithium-ion batteries within a circular economy. Image credit: James Upright

Recycling allows the valuable materials in lithium-ion batteries to be salvaged and returned to the supply chain. Modelling suggests that 99% Cobalt and 93% Lithium could be recovered in a closed-loop approach typical of the circular economy, but scientists haven't yet overcome the challenge of finding a cost-effective and environmentally-friendly recycling process (Pagliaro and Meneguzzo, 2019).

In the meantime, as battery recycling technology improves, manufacturers can give EV batteries a second life by reusing them as energy storage in the electricity grid, residential services and renewable energy sources (Cusenza et al., 2019). 

Until we see substantial improvements in recycling technology, manufacturers can still give EV batteries a new lease of life through reusing them as energy storage in the electricity grid, residential services and renewable energy sources. But what about the electricity that powers them? How green is our grid? And how does it stack up against petrol- or diesel- powered cars?

Myth #3: The electricity that powers electric cars is generated by fossil fuels, so any carbon savings from the car are simply being emitted elsewhere

The big promise from EVs is that there are no tailpipe GHG emissions, but electricity has to be generated somewhere - and it’s no secret that it is produced, in part, by burning fossil fuels.

There has been a steady increase in renewable energy generation over the past decades. In 2020, Scotland produced a record 32,063 gigawatt-hours (GWh) of renewable electricity, equivalent to around 96% of its total electricity consumption - a huge milestone for the country's journey towards net-zero. But, this isn’t the end of Scotland's energy story.

Electricity generated from renewable sources in Scotland. The drop in 2021 is likely due to milder conditions that year, showing a peak of 32,000 GWh in 2020. Source: Scottish Energy Statistics Hub, 2022a.
Electricity generated from renewable sources in Scotland. The drop in 2021 is likely due to milder conditions that year. Source: Scottish Energy Statistics Hub, 2022a.

Scotland produces more electricity than it uses, including a substantial amount from fossil fuels and nuclear energy. In 2020, renewables accounted for 61% of total electricity generated in Scotland, nuclear 25%, and fossil fuels 10%. Once on the grid, electricity is electricity: it is impossible to discern what is wind-generated and what is from natural gas. There is no doubt that Scotland has a hugely positive story to tell in renewables; however, there is still more work to do to ensure sustainable electricity sources across the country power EVs.

Comparative percentage line charts of Scotland and England & Wales' proportion of energy generation by fuel in 2020.  Source: Scottish Energy Statistics Hub, 2022b
Proportion of energy generation by fuel in 2020. Source: Scottish Energy Statistics Hub, 2022b

A cleaner grid will be the most significant factor in reducing electric vehicle life-cycle emissions. Roughly half of the carbon cost of an EV comes from the electricity required in the battery manufacturing process - so, increased use of renewable energy and more efficient power plants equates to cleaner batteries. 

While the electricity grid is moving towards renewable sources, it is unlikely to be totally decarbonised for some time. In the meantime, some EV manufacturers are looking to distance themselves from the environmental variability of national power grids by producing their own electricity. Tesla's Gigafactory Nevada, for example, manufactures and charges 35 GWh of lithium-ion batteries per year from an onsite renewable energy source (Tesla, 2021).

Like Tesla, until the grid has a greater percentage of renewable electricity, the most environmentally-friendly way to recharge your car is to produce electricity via at-home solar panels. Of course, this is currently only accessible for a small portion of the population, with price and space issues for homeowners to consider - but it is an excellent option if you can. 

In any case, with ICEs powered by 100% fossil fuels (AA, 2022), powering your EV in Scotland currently offers a huge 60% carbon saving. As the renewable energy quantity continues to grow year on year, so too will the sustainability divide between traditional and electric cars.

Drawing showing solar and wind power feeding into the electric grid
Image credit: James Upright

Myth #4: Electric vehicles don’t address the tyre problem

In 1974, the US was plagued by thousands of used tyres. Used tyres had been piling up at an alarming rate. Illegal dumps popped up: some tyres caught fire, and others became breeding grounds for mosquitoes. 

Florida’s Broward County approved an ambitious new project: using the unwanted rubber to construct an artificial reef. “Tyres,” a campaigner told the county, “which were an esthetic pollutant ashore, could be recycled, so to speak, to build a fishing reef at sea” (Ecosystems of South Florida, 2008). Later that year, locals enthusiastically dumped two million tyres in Fort Lauderdale’s harbour.

As we say in Scotland: “But the best-laid plans of mice and men often go awry.”

The experiment was a spectacular failure, with very little marine life taking to the artificial reef and tyres shifting in the currents, causing damage to the natural coral reefs nearby. 

As the world has become increasingly globalised, and our cities have become sprawling metropolises, our reliance on the humble tyre has only grown alongside fossil fuel use. Yet, they are critical in ensuring safety on our roads, controlling steering, braking, acceleration and a smooth driving experience.

However, as in the 1970s, tyres still pose a massive global environmental concern. Worldwide, an estimated 1.5 billion tyres are produced annually (Mashiri et al., 2015). As they cannot break down naturally, used tyres leach chemicals into the ground or risk catching fire (Mohajerani et al., 2020).

Every so often, it is claimed that EV tyres produce more particulate matter pollution than ICEs. Primarily made from crude oil, all tyres create emissions in the form of particulates - tiny rubber particles cast off into the road and atmosphere - as they wear down. A key contributing factor to the amount of particulates emitted from tyres is the weight of the car and, with their massive battery packs, some people are concerned that EVs cause extra wear on the tread. There have even been calls to introduce a new tax on EV tyres based on this belief (Express, 2022). 

However, scientists have largely discredited these claims. With the recent trend towards bigger and heavier SUVs, modern EVs aren't much heavier than modern ICEs, so the wear on tyre tread is near indistinguishable. Also, as batteries become more and more energy-dense, we'll likely start to see a shift from stuffing more battery capacity into the same space toward producing batteries with similar capacity in a smaller battery, leading to a lighter car. 

Tyre manufacturers are also developing special EV tyres, such as UK startup Enso's EV tyres that wear less without sacrificing grip and extend the vehicle's range more than traditional tyres (Autocar, 2022).

EVs may not solve the broader tyre problem, but the wear is broadly on par with petrol and diesel cars (unless drivers get a little throttle-happy!). Luckily, we've found more creative, less destructive ways to recycle tyres than attempting to build tyre reefs since the '70s. For example, waste rubber can be used in construction materials, including concrete, playground and sporting surfaces, and systems to reduce the impact of earthquakes (Mohajerani et al., 2020). 

Finally, with most end-of-life tyres already recovered, circularity is the next step. Goodyear and Pirelli have replaced much of the petroleum-based components with renewable materials, Bridgestone has invested in developing an alternative natural source of rubber, and the Michelin Group has ambitious renewable goals and is engaged in recycling end-of-life tyres. These commitments are a step in the right direction, but, as the World Economic Forum has pointed out, circularity requires "unprecedented collaboration" (World Economic Forum, 2022). Knowledge sharing and stakeholder cooperation will be the key drivers of progress towards a circular economy for tyres.

Illustrated tyre with a green arrow wrapping around it clockwise
Image credit: James Upright

Myth #5: I’ll just wait for hydrogen cars to become available

Like EVs, Hydrogen Fuel Cell Vehicles (HFCV) are zero-emission vehicles with no GHG tailpipe emissions. However, instead of a battery-powered or combustion engine motor, HFCVs use an electric motor to power their wheels, transforming hydrogen gas and oxygen into power, water vapour and warm air. 

The benefits are undeniable: with no tailpipe emissions and no need to rely on the energy grid, HFCVs are upheld by many as the holy grail of carbon-neutral transport.

So, who's making HFCVs, and how can you get hold of one? Toyota and Hyundai have produced hydrogen fuel cell cars, and BMW has also started testing HFCVs. Additionally, a small Welsh firm, Riversimple, is developing a two-seater HFCV. Their prototype, the Rasa, weighs just 580 kg - half the weight of a small car like a Nissan Micra.

But, the future for HFCVs isn't all roses. HFCVs currently produce CO2 and NOx emissions, meaning that the technology does not meet the UK Government's criteria to achieve 'zero emissions by tailpipe' (OZEV, 2022). 

There are other emissions associated with hydrogen fuel production. Hydrogen does not occur naturally, so it must be extracted and compressed in fuel tanks and mixed with oxygen in a fuel cell stack to create electricity to power the car's motor. Currently, hydrogen is made by converting natural gas into hydrogen and carbon dioxide, so it relies on fossil fuel sources.

Future hydrogen sources include splitting water into hydrogen via electrolysis or methane gas from landfills and sewage treatment facilities (UK Hydrogen Strategy, 2021).

The UK Government expects hydrogen to play a vital role in decarbonising transport but will likely prove most effective in heavier transport modes where batteries aren’t as effective, like road freight, maritime and aviation (OZEV, 2022). Beyond its environmental credentials, HFCVs also face issues of lacking infrastructure, with just 12 hydrogen stations (UK H2Mobility, 2022) compared to the 42,000 EV charging stations across the UK (EDF, 2022).

Image comparing the number of EV and HFCV stations across the UK. Image credit: James Upton
Image credit: James Upright

The story of HFCVs and EVs is intertwined. Indeed, it is clear that the emissions from HFCVs are likely to drop with advances in EV tech and the increased availability of renewable power (Union of Concerned Scientists, 2014). Currently, both types of vehicles produce significantly less emissions than traditional ICEs - but, with zero current tailpipe emissions, more options available and superior current infrastructure, EVs nose past in first place.

The road ahead 

In an increasingly environmentally-conscious world, understanding our tread on the globe is more critical than ever. 

From trading horses for ICEs to constructing tyre reefs, it’s clear that many of our past solutions to pollution were reactive rather than proactive. 

EVs, however, are a clear solution to our long-term concern: they cut tailpipe emissions to zero, leading to cleaner air, greener spaces and a healthier environment for all. Undoubtedly, an electrified car fleet is critical to achieving our joint goal to regenerate our planet.

But, there is still work to do. To say that we’re already there overlooks humanity’s ability to innovate at pace – and EV technology is improving at unbelievable speeds.

As the electricity grid across the world incorporates more renewable sources, and advances toward a fully circular model for tyres and batteries are made, electric cars will become less and less impactful on the world around us.

Choosing an EV over an ICE is the single biggest decision you can make to reduce your carbon footprint. Choosing to loveelectric is the cheapest way to make that change.

Loveelectric's Pricing: How it Works And What You Need to Know

Corporate
Financial
Electric Vehicles

With so many providers offering salary sacrifice schemes and using different pricing models, it can be challenging to understand where the best value for money is or what exactly you’re paying for.

The main issues you might face when trying to find out the price of a salary sacrifice scheme are:

  • Hidden costs that aren’t included in the website
  • Having to get on a sales call to find out how much you’ll be paying
  • Not knowing exactly what’s included
  • Being unsure of how the company makes money

In this article, we’ll give a rundown of  loveelectric’s pricing so you know exactly what you get for your money. We’ll do this by discussing:

  1. How loveelectric charges for its service
  2. What’s included in your monthly lease
  3. How loveelectric compares to the other salary sacrifice scheme providers
  4. What should you keep in mind when choosing a salary sacrifice scheme service?

Note: if you’re looking to get started now, choose your brand new electric car and get a sample quote instantly by sending an enquiry.

How we charge for our service

loveelectric is free to set up. As an employer, you won’t have to pay anything to set up the salary sacrifice scheme. 

We only charge a fee once an employee’s car is delivered. We charge a small administration fee, which is 1.5% of the employee's gross rental and averages out at around £10 per month per car. The fee is taken from the employer’s NIC savings, which means that loveelectric’s service fee is essentially  cost-neutral to the company.

So how do we make money? At loveelectric, we charge our commission based on 2% of the P11D value of a car. We factor this percentage into our online prices, so there aren’t any nasty surprises  after you sign up.

For example, with the Fiat 500, the total net fee that the employee would pay if they had a £60k salary would be £8.13 per month (£292.68 over the lifecycle of the lease), which is 1.2% of the P11D value of the car. This would be taken out of the NIC savings made by their employer, meaning the employee pays £7.67 per month out of their NIC savings. 

Most salary sacrifice providers are free to set up, but will then charge artificially inflated monthly leases to employees to cover their costs. With loveelectric, you’ll know you’re getting the best value for money as well as how our business works.

How loveelectric presents its prices for full transparency

The gross cost is the amount shown on our web application, which is deducted from the customers' salary before tax. This is a fixed amount with no other deposit, sign-up fee or hidden costs added throughout the lease.

The net cost is the actual cost to the driver that they pay via a reduced salary. Salary sacrifice works by taking the cost of the lease out of the employee’s gross amount and reducing their yearly tax.

loveelectric pricing: fiat 500

Once the employer has signed up and employees have access to the driver’s portal, they’ll be able to see more accurate pricing for the monthly leasing cost.. They’ll be able to input their postcode, age and salary, which will dynamically change the lease  based on their specific circumstances. 

loveelectric pricing for different EVs

The tax reduction is based on the driver’s salary and postcode. In most cases, the higher your salary, the higher the percentage of savings you will make.

The infographic below shows an example of the pricing and how the savings would look on an employee’s payslip. For a more comprehensive look, check out this article on Salary sacrifice electric car examples: how it works in practice.

loveelectric pricing. How does payslip change

What's included in your monthly lease with loveelectric?

When you sign up for loveelectric, you will have a fixed-term monthly lease contract with a full breakdown of all the costs beforehand. 

Here’s what’s included:

Access to any electric car you want via 300+ car dealerships 

We’ve partnered with over 300 dealerships around the UK, which means you’ll have access to a wide range of cars from a very affordable Fiat to a top-of-the-range Porsche. 

All the cars you see on our app are brand new. Once your lease term is over, you can exchange the car for another brand new one to stay on top of EV technology. 

You can choose a lease term from 2 to 3 years and also adjust your annual mileage allowance which can range from 5,000 - 30,000 miles. You have the option to add fully comprehensive insurance so that you won’t have to get it yourself.

Access to the best prices 

We’re a broker, not a leasing company, which means that we’re able to offer customers the best prices on the market. We partner with large leasing companies and can negotiate further discounts on our listed prices which wouldn’t be possible if we were a leasing company. This ensures we’ve almost always got the lowest price on the market.

Other salary sacrifice providers are often car leasing companies, which means they may not have as wide a selection of cars available and the lead times might also be longer.

Everything you need to keep your car running

By signing up to loveelectric you’ll also have access to everything else that comes with a lease, including maintenance and servicing. With loveelectric, you specifically get:

  • Maintenance and servicing
  • MOT
  • Breakdown assistance and recovery
  • Replacement tyres and glass
  • Accident management

You’ll also get a driver handbook, where you’ll find everything in more detail.

Having your maintenance and servicing paid for helps ensure that you don’t have to worry about anything when driving your car. In turn, we’re there for you if you need breakdown assistance, so you’re never stranded. 

An example of the breakdown of the costs for loveelectric’s services is illustrated below.

lovelectric salary sacrifice cost

Early termination protection that covers both employees and employers

What happens if an employee resigns? Or is made redundant?

That’s where our early termination protection comes in.

Our protection is included in all monthly leases and is automatically included in the final price you’ll see. If an employee resigns after 3 months, they only need to pay a one-off fee equal to  one month’s pay of the gross lease. If an employer makes an employee redundant after 6 months, they will pay a one-off fee worth one month of the gross lease payment. 

Our early termination protection is one of the most comprehensive and will ensure employees and employers are  protected.

Two things to note about an employee leaving their company while on our scheme:

  1. The employee can novate the contract to another eligible employee in the company. This is great as there is no fee, and the next employee has no lead time for their new car. The car could also be used to help recruit a new employee.
  2. Our loveelectric support team can help the departing employee move the lease to their new employer at no extra charge. We can also offer it to another company within our customer base (both options with Plus package only).

You can also read more details here: Early Termination Protection for Salary Sacrifice Car Scheme: How It Works And What You Need to Know

loveelectric pricing: how does early termination works

Fully comprehensive car insurance for worry-free driving

As specialists in salary sacrifice scheme leasing, it’s only fitting that we got similar specialist insurers to cover our cars. 

Lloyds Latchford Group matches our strict criteria for excellence and has a solid track record covering over 700 car fleets in the UK. They’ve been in the salary sacrifice industry since 2007, and have extensive experience with car leasing.

The insurance cost is fixed throughout the lease, helping provide cost stability. Since the insurance is already built into the price, it also benefits from the tax savings employees get.  

One highlight of our insurance is that we have gap insurance included in our policy. If a car gets written off after an accident, the insurer may pay a price which is different from the valuation of the leasing company. Our gap insurance protects the employer from having to pay this difference.

Most importantly, you can rest assured that you and the vehicle are fully covered for accidental damage and personal liability. In the case of an accident, we also cover the cost of taking the car to the nearest repairer and delivering it back to you.

Customer service experts supporting you from start to finish

We have a dedicated team to help make the entire salary sacrifice scheme process as seamless as possible. If this is your first time setting up or using a salary sacrifice scheme, you might have many questions. We’ll be at hand to offer support and  answer any questions you might still have about our service. 

We also have a public community where you might find the answers to your questions already answered. Our expert advisor checks this regularly, and we like keeping it transparent for anyone to see.

For companies interested in signing up but still have questions, we offer a webinar solely for educational purposes. We have found these group webinars with a group of employees help clear up many blind spots about salary sacrifice.

We offer support with your HMRC needs and will provide the templates and documents needed to get your tax affairs in order. Your accountants will then have everything they need to ensure all your books are up to date. 

When an employee signs up for a salary sacrifice scheme, it’s technically a minor change in their employment contract. Therefore, we provide the appropriate contract amendment for the employee, creating less work for the employer's HR team. 

User-friendly web application to browse our large selection of cars

In our app, employees will be able to input their details and contract specifications to suit their needs and get access to live dynamic prices

In our private app, employees can change their details and modify the car trim before ordering. You do not need to do a consultation call with us to get a quote. A sample of the private app is shown below.

What does loveelectric not include?

Continuing with our transparency ethos, we thought it best to outline what’s not included in our monthly pricing.

  • Our quoted price does not include an electric vehicle charger. But we can advise on where best to get one and how to install it.
  • You won’t be able to test drive the car beforehand, as it’s custom-made by the manufacturer for you and only once complete is delivered.
  • We do not have an in-house energy tariff system. However, if you lease a car with loveelectric, you can still always sign up for an energy tariff system with a separate energy provider as well.
  • We don’t do PCP or standard lease as we specialise in salary sacrifice schemes.

How loveelectric compares to other salary sacrifice schemes

Through your research, you’ve probably come across several leading companies in the UK that offer salary sacrifice schemes. 

The main thing to note is that different providers include different features in their packages, making direct comparisons challenging. 

Here’s a comparison table comparing features across various salary sacrifice providers:

For a more thorough examination of the different salary sacrifice providers, check out: Best Salary Sacrifice Car Scheme in the UK — Which One is Best for You?.

Our early termination scheme offers some of the highest protection

Early termination is one of the most important topics when it comes to a salary sacrifice scheme, so make sure to read all the fine print when signing up for a provider. Make sure you know how long it takes for protection to go live as an employer or employee, and what the conditions are.

As mentioned above, at loveelectric, our early termination scheme offers the shortest time before early termination protection kicks in (3 months for employees and 6 months for employers).

Other salary sacrifice providers might have a different arrangement, for example:

  • Early termination protection only active  after 6 months
  • High penalties (often over £15k) to leave a contract
  • A cap on the number of claims you can make per year
  • No protection in case of parental leave

We offer the greatest transparency on our pricing

We’re the only company to give public sample quotes of our prices. Most other companies will put you on a call with their sales team for a quote. Many companies will claim to offer the cheapest monthly leases, but the prices are often a lot higher once the employee orders the car due to added fees or a deposit.

We like to be as transparent as possible from the beginning with our prices, which is why you’ll see all our fees at the beginning of this article. 

We have B-Corp status pending, which, when approved, will open us up to the scrutiny of our finances. We believe this is a great way to build further trust with our customer base and lends itself to our transparency ethos. 

For a clear view of our pricing options, see our infographic below. 

We are specialists in the salary sacrifice scheme

What you might notice while researching different schemes is that most offer an array of services, such as:

  • Standard electric car leasing
  • Salary sacrifice schemes
  • Combustion car leasing 

At loveelectric, we specialise in salary sacrifice schemes. This allows us to offer a comprehensive, personalised service while also offering the best prices. 

What should you keep in mind when choosing a salary sacrifice scheme service?

Since each salary sacrifice provider offers different services, it’s wise to ask the right questions before signing and agreeing to a contract.

Some questions to keep in mind to ask a salary sacrifice company:

  • Are there any caps associated with the percentage or number of claims on the plan?
  • How many months before the early termination protection kicks in?
  • Are there any hidden fees not shown in the quoted monthly price from the website?
  • Do you have to pay extra for the first few months?
  • Do you have gap insurance?
  • How do you manage the employee’s salary and payroll?
  • What’s your post-care service like, and how much access do we have to support?

loveelectric FAQs

We've added some questions that we hear a lot from potential clients. They should clear up some of the topics not covered in this article. 

Do you own the car after salary sacrifice?

You won’t have the option to buy the car after your lease is up with loveelectric. 

However, keep into account that it might not always make sense to buy an electric car. The technology is adapting so quickly that owning an electric car that is 5 years old will put you at a considerable disadvantage. That’s why we feel it makes more sense to lease rather than own a car.

How much does EV salary sacrifice save?

You can save anywhere from 30-60% on a standard lease through a salary sacrifice scheme. 

In most cases, savings are much larger  if you’re in the higher tax bracket.

What is a salary sacrifice car scheme example?

We have done full examples of what a salary sacrifice scheme with loveelectric looks like in this article: Salary sacrifice electric car examples: how it works in practice.

To get a glimpse at what the payroll would look like for the employee and employer, see the infographic below.

Hopefully, this has given you all you need to know about loveelectric’s pricing and how it compares to other companies offering salary sacrifice schemes. 

We’re always at hand to answer any further questions you might have, so feel free to reach out and make an enquiry if you do.

A Brief History of the Electric Car

Guides
Electric Vehicles

The electric car is currently the fastest growing mode of transport on the planet. Drivers in their thousands are throwing in the keys to their diesel estates and petrol hatchbacks in favour of a zero-emissions alternative. 

It may feel as if the electric car boom sprung from nowhere. World EV Day was only established in 2020 and charging stations have only begun to fill UK forecourts in the past couple of years. 

In reality, electric cars have been around far longer than public perception would have you believe.

The Scots that started it all: 1830 - 1900

The story of the electric car begins in the birthplace of loveelectric: Scotland. In the early 1830s, an engineer by the name of Robert Anderson did away with his horse and fitted some rudimentary batteries to his carriage, powering the car. Behold, the first electric vehicle. Due to the incredibly limited technology of the time, the batteries couldn’t be recharged, consigning Anderson’s horseless cart as more of a novelty than a transportation device.

Cue another ingenious Scotsman: Robert Davidson, who in 1841 demonstrated an all-electric locomotive. With a top speed of 4mph, a range of 1.5 miles (before needing completely new batteries) and tow capacity of six tons. It really was a huge breakthrough for electric transport. This incredible piece of engineering garnered the unfortunate nickname of ‘devil machine’ from the local railway workers - who destroyed it after declaring it a threat to their jobs maintaining steam engines. 

A black and white photo of one of the earliest electric vehicles with four gentlemen sat atop c. 1893
Source: David T. Wells via Wikimedia Commons

By 1859, batteries finally became rechargeable. This sparked inventors' imaginations across the globe and encouraged over three decades of advancements. In 1890, the chemist William Morrison (another Scot!) submitted a patent in the US for the world’s first ‘proper’ electric car. 

It was front-wheel drive, had a purported top speed of 20mph and gained a blistering 4 horsepower from its 24-cell battery pack. The range was the most impressive milestone. Morrison’s vehicle could go 50 miles before needing recharging. These performance figures made the electric car a viable transportation option - for the wealthy at least - leading to an automotive arms race in the early 1900s.

Steam v. gasoline v. electric: 1900-1908

With a new century ushered in, the next 10 years became a battle of which fuel source would power personal transportation.

The most familiar source was steam. Coal had been a reliable producer of energy for centuries, powering hulking locomotives across the railways of the developed world. There was quite a drawback for steam-powered transportation however - it wasn’t the most time efficient. 

To create enough steam to get the vehicle moving it needed to be heated to around 480°C. On brisk winter mornings in the depths of England, this process could take up to 45 minutes. This may have been a manageable timeframe if it was then able to achieve an incredibly long journey. But the necessity of refilling with water severely limited the range.

The public discourse of comparing gasoline-powered vehicles and electric cars was much the same in the early 1900s as it is today: noise, pollution and range. 

Through consistent developments in the internal combustion engine, even the earliest examples were able to utilise a relatively small amount of fuel for a far longer journey. However, petrol cars of the era weren’t without their drawbacks. 

Firstly, they were incredibly complicated to drive. Gear-changes required a large amount of manual effort to complete and the noise they produced was untenable for many. A serene countryside setting would quickly become a burbling cloud of noise and pollution if a petrol car clattered through.

The biggest barrier of all though was the starting procedure: a hand crank. In order to get the engine turning over, the driver would have to physically crank it using a metal bar. Unfortunately this often led to broken thumbs.

Electric cars however, were simple, clean and quiet. They became extremely popular within urban environments and upper-class women, mainly due to the omission of a manual hand crank start. Engineers at the time recognised the potential for a smoother, smarter way to travel and set to work.

Stuttgart’s Finest

One of these engineers was Ferdinand Porsche. Yes, the Porsche. Ferdinand created the Porsche P1 in 1898. The world-leading sports car brand’s first ever vehicle was an all-electric car. An incredibly compact electric drive gave the P1 around 3hp. It was, however, fitted with what was essentially a ‘sports mode’. This upped the output for a short while to 5hp and an accompanying max speed of 35kph. Achieving a range of 80 kilometres was impressive too, especially with the limitations of the technology at the time.

An initial sketch of the Porsche P1 side-on
Source: Porsche

McLaren has stated its contemporary bonkers hybrid-hypercar earnt the ‘P1’ namesake from the company’s involvement in Formula 1. But - knowingly or otherwise - the British automaker has continued the legacy of the P1 name, a model designation with an incredibly long and steeped history in electrified powertrains. 

Shortly after the P1, Porsche turned his attention to combining the efficiency of the electric motor and the power of the petrol engine. In 1900, the world’s first functional hybrid car was unveiled. Named the ‘Semper Vivus’ - latin for ‘always alive’ - the vehicle used its onboard combustion energy to power a generator, feeding the electric motors with more energy. Although a successful use of the burgeoning tech, the vehicle struggled with a very familiar issue that still plagues electric cars today: weight. The hi-tech Porsche weighed nearly two tonnes, which may be a manageable weight today - but was completely impractical then.

With a multitude of the automotive industry’s finest collaborating and developing electric cars, it looked likely that the emerging battery-tech would prevail. However it wasn’t meant to be, with one man stopping the all-electric dream dead in its tracks.

The Rise of Motor City: 1908

In 1908, the popularity of the electric car took a steep nosedive - all thanks to Mr. Henry Ford. The introduction of the Ford Model T revolutionised personal transport and dashed any hopes of an electric car renaissance.

What set the Model T apart from its petrol-powered predecessors was twofold: design improvements and manufacturing technique.

Thanks to an inventor by the name of Charles Kettering, the electric starter motor became widely available for use within motor cars. This eliminated the need for a hand crank and vastly improved their popularity. 

More importantly though, was the introduction of the moving assembly line. Henry Ford’s chief motivation was to create a car that could be bought by the very workforce assembling it. But to achieve this, manufacturing costs had to be kept to a minimum.

A bare chassis would move along the production line to specific stations. At those stations were piles of key components and parts. Workers would continue to add to the vehicle at their specified stations until the Model T was fully built. This allowed a Model T to be assembled - start to finish - in only 90 minutes. This was a revolutionary technique in time and cost savings. This system of production was so efficient in fact, that it became the production blueprint for the contemporary automotive industry.

By 1912, motoring was for the masses. Thanks to the huge manufacturing advancements and refinements in tooling, a gasoline car cost around $650 ($19,500)* to purchase. Whereas an electric roadster was $1,750 ($52,370)*.

*(Numbers in brackets demonstrate figures adjusted for inflation)

Aside from the stark contrast in price, electric vehicles began to become a - literal - vehicle for reinforcing gender norms. Due to the limited range, cleanliness and simplicity, EVs were heavily marketed toward women. The distinction between electric and petrol-power quickly grew, with a NY Times reporter finally surmising in 1909 that an “electric car…is essentially a ‘woman’s car”.

With men holding economic capital and thus purchasing power, the scales quickly tipped in favour of internal combustion. Before long, electric cars faded into novelty and irrelevancy.

A black and white photo of the Ford Model T’s side-profile
Source: Ford

Detroit remained the home of automotive production for decades and by 1950, it had a population of 1.5million with over 296,000 manufacturing jobs. The desire for gas-guzzling, cheap-to-produce automobiles culminated in the 60s with the introduction of the muscle car.

From producing one iconic vehicle to another, Ford unveiled the Mustang - a car that epitomised the public consciousness of the time. Just like its forefather - the Model T, a brand new ‘64 Mustang was priced for the mass market at around $21,000 (adjusted for inflation). Powering it was a giant thumping V8: 289 cubic inches of all-American cast-iron. Petrol remained cheap, so the 16.6mpg figure wasn’t much of a consideration for the average motorist. 

The fires of Detroit’s automotive factories roared on for another decade or so until geopolitical influences distinguished those flames of oily optimism.

Clean Air Act & Global oil crisis: 1970-1975

By the 1970s, the cultural landscape was vastly different to the decade preceding it. 

In 1970, US Congress passed the Clean Air Act which required a 90% emissions reduction in all new automobiles produced from 1975 onward. The EPA was also established and given the responsibility for regulating pollution from all motor vehicles. The new standards are implemented across the board and compel the automotive industry to drastically innovate.

Problems in the Middle East also lead to a huge energy crisis, culminating in the Arab oil embargo of 1973. In response to the West’s support of Israel against Egypt, the price of crude oil rocketed, quadrupling from $3 per barrel to $12 by 1974.

Suddenly gas-guzzling V8s were no longer viable ‘everyman’ cars and miles-per-gallon figures mattered. But Detroit’s Big Three - Ford, Chrysler and General Motors - couldn’t respond fast enough and the age of the big, inefficient, carburetted engine was facing obsolescence.

With efficiency the main focus, Japanese automakers swooped in. For decades, the Japanese Government had been investing huge swathes of public money into companies such as Toyota and Nissan. The result was a hugely efficient manufacturing process and incredibly reliable cars. To achieve this, Japan’s engineers borrowed the best ideas from the leading OEMs (Original Equipment Manufacturers; automakers) of other countries. For example, they replaced Britain’s notoriously abysmal electrical systems with refined and well-engineered domestic alternatives.

Conversely, Detroit’s manufacturing process had become convoluted, bloated and inefficient - at complete odds with Henry Ford’s original concept. Order sheets could run into the dozens which was a nightmare for the production line. To keep production as efficient as possible, Japanese manufacturers offered a limited amount of options and colours, drastically reducing the time and cost to build a car. In short, Japanese cars were far more refined, infinitely more reliable and competitively priced.

A black and white photo of the first Toyota Corolla c. 1970
Source: Toyota UK Magazine

As a result, Western markets were flooded with Japanese cars, snuffing out the once dominant power of Detroit.

Surprisingly - or maybe not so surprisingly - the global fuel crisis and introduction of stringent emissions regulation, did little in the way to buoy the popularity of electric cars. Quite the opposite in fact. Even with the sanctions and exorbitant fuel prices, liquid black gold and internal combustion won out again. The Government continued to subsidise the petro-chemical industry and public interest in electric cars and battery technology waned once more.

But whilst the automotive industry floundered, research into battery technology surged and before long a huge breakthrough was achieved.

Lithium-ion battery breakthrough: 1973 - 1991

Electric cars still faced big limitations that prevented mass-market uptake - the largest of which was battery technology. There just weren’t any batteries available that had a large enough capacity, were stable enough and could be recharged, severely limiting the viability of a commercial electric vehicle.

However, in 1973, the chemist M. Stanley Whittingham and a team of colleagues made the most important technological breakthrough in relation to electric vehicles - the rechargeable lithium battery. 

Whilst working for Exxon - one of the globe’s largest oil and gas corporations - Whittingham experimented with using titanium disulfide and lithium metal as the electrodes for a battery. Initial tests were successful; the battery had a modest capacity but could also be recharged. Unfortunately, they were extremely unstable. Often prone to sudden combustion and short-circuiting, Exxon halted the project.

John Goodenough further researched the technology. In 1979/1980, Goodenough discovered a cobalt oxide cathode that allowed voltage to pass through at a higher rate and was more stable than Whittingham’s earlier prototypes. But it still wasn’t to be. Cobalt wasn’t a financially viable material to implement on a commercial scale, reducing its practical application.

The battery-baton was finally handed off to Akira Yoshino. To increase stability and reduce cost, he changed the battery’s anode to petroleum coke. This proved to be the final discovery needed and Yoshino went into the history books as the creator of the world’s first lithium-ion battery. Using Yoshino’s design, Sony released the first commercial lithium-ion battery in 1991 - revolutionising personal technology and transport for decades to come.

Electric Car Trailblazers: 1996-2018

With fully rechargeable lithium-ion batteries available for commercial usage, the auto-industry began to heavily invest in all-electric transportation.

A hero shot of the General Motors EV1, the aerodynamic body shell is bright red
Source: Autocar

General Motors EV1: First produced in 1996

The GM EV1 was the first ‘proper’ all-electric car from a major industry stalwart and was intended to revolutionise the OEM’s automotive line-up. Considering the limited technology of 1996, it actually housed some rather impressive features.

Most notable of which was the inductive charging panels. No messy cables or plug-types to worry about, just a simple paddle at the front of the car and charging commenced. Range wasn’t great in the earliest models - a light-footed driver could maybe eke out 100 miles from a single charge - but it was a major statement of intent from America’s biggest carmaker.

Although, they weren’t actually available to buy. General Motors only made the EV1 available for leasing, which at $399 per month ($753 when adj. for 2022 inflation) wasn’t the cheapest option. But it was incredibly aerodynamic and marked a significant milestone in the electric car pantheon. Good luck trying to get hold of one though as GM crushed most of them after the project was canned. Shame.

A hero shot of the first Toyota Prius, the 5-door body is light-blue
Source: Toyota UK Magazine

Toyota Prius: Released 1997

Although much maligned by many motorists, the Prius is the first example of a car with an electrified powertrain to reach huge mainstream popularity. It is of course a hybrid. But hybrid technology allowed the idea of electric cars to be introduced to the average motorist. 

Winning Japan’s car of the year in 1998, the Prius (Latin for ‘to go before’) was an instant success in its home country - by 2000, more than 40,000 units had been sold.

Its hybrid technology allowed a theoretical range of 560 miles with a combined fuel economy of 57.6mpg, making it far more economical and green than any of its direct competitors. The Prius was also the first car to be sold in Europe with a five-year mechanical warranty. To bolster its green credentials, Toyota committed to recycling any Prius at the end of its life as well. 

The runaway success of this humble hybrid proved to the world a thousand times over that cars need not rely on fossil fuels alone. 

But there were still two large factors that restricted the mass adoption of all-electric cars. The first, was an image problem. Cars like the G-Wiz and Citicar had done little for the desirability of an electric car. They were small, utilitarian and slow. Secondly, range was still pretty abysmal. A G-Wiz for example, had an official range of 50 miles - although drivers were hard-pressed to get anywhere near that figure on the road. 

Then one car changed it all.

A hero shot of the original 2008 Tesla Roadster, the sleek 2-seat drop-top is light grey
Source: Autoblog

Tesla Roadster: Released 2008

Enter stage left: the Tesla Roadster. A slick looking, two seater sports car à la the Lotus Elise with a headline-grabbing range of 245 miles from a single charge.

Brainchild of billionaire Elon Musk, the Tesla Roadster wasn’t just good ‘for an EV’ - it was great, full stop. It had performance figures that rivalled even the most premium of petrol-powered sports cars. 0-60mph took 3.7s with a top speed of 125mph. These were impressive stats made all-the-more impressive by the Roadster producing zero-tailpipe emissions. 

It cost circa. USD$110,000 to buy and there were only around 2,400 ever sold. But the Tesla Roadster represented what electric cars could be: desirable and practical. Tesla knew the Roadster wasn’t a car for the masses, but it served as the genesis for the electric cars that Tesla dominates with today.

A dynamic shot of the original Nissan LEAF driving along, a light-blue 5-door hatchback
Source: Nissan

Nissan LEAF: Released December 2010

The world’s first mass-market 100% electric vehicle. Released in December 2010, the Nissan LEAF offered emissions-free motoring to the general public and revolutionised transport forever.

Shaking the eccentric reputation electric cars had garnered, it was produced by one of the most reputable companies on the planet. The styling of the body was conservative but housed some of the best tech on offer: setting the air-conditioning from a phone, for example. With a range of 200km and a price-tag of £28,350 (£23,350 after the then-generous UK government grant), the Nissan LEAF was priced higher than its petrol-powered rivals - an unfortunate premium that electric cars are still subject to today. 

Regardless of the price premium, the LEAF successfully changed the course of electric car uptake. The Japanese automaker worked closely with governments and electricity companies to develop charging infrastructure, too - enhancing the practicality and credibility of electric cars as an eco-alternative to traditional hatchbacks.

Horse-powered carts to high-horsepower cars: 2018-present day

Even with the introduction of the LEAF, electric cars remained a bit of an oddity. Although far more popular and the most practical they’d ever been, uptake remained somewhat stagnant.

Then over the course of 3 years, that changed.

In 2019, the UK had around 37,850 registrations of new electric vehicles. The following year, that figure had jumped dramatically - up to 108,000 registrations. Come 2021 and another 191,000 electric vehicles had hit UK roads. Why the dramatic surge? In November of 2020, the UK Government announced a total ban on the sale of petrol and diesel cars by 2030 - a hugely significant piece of legislation.

After the annual energy bill freeze, we briefly examined whether the increase in electricity cost would have an impact on EV uptake in the future.

Even taking into account the global supply chain shortage and energy crisis, it’s unlikely that electric car uptake is going to slow.

A dynamic shot of the Mercedes-Benz EQE, sleek 5-door saloon, dark blue
Source: Mercedes-Benz

Models like the Mercedes EQE are pushing the upper-limits of electric car luxury, offering an enormous range of 385-miles from a single charge and stuffed with all of the best tech the auto-industry has to offer. Kia has brought eco-motoring to families, producing the practical and affordable Niro EV.

Soon, we won’t even make the distinction between the two: electric cars will simply become ‘cars’ and petrol-power will become a novelty for enthusiasts.

Full-circle 

It may have taken over 120 years, but the age of the electric vehicle is firmly upon us. Electric cars are mainstream, range is constantly increasing and manufacturers are producing all-electric flagship models. 

As a proud Scottish company, loveelectric is further emboldened to continue the story Robert Anderson began all those years ago. Our home soil is steeped in EV history. We’ll continue to serve businesses and employees alike, ensuring everyone has the chance to go electric in the easiest and most affordable way possible - via our industry-leading salary sacrifice scheme.

Electric Car Monthly Cost: How Much Does it Cost to Run an Electric Car?

Electric Vehicles
Financial

If you are new to the world of electric cars and are considering getting one for yourself, then one of the first questions you’ll be asking is: how much does it cost to run one?

Quite likely, your questions are:

  • Is it cheaper than a combustion car?
  • Is the maintenance cost higher than a combustion car?
  • Which is more cost-effective: leasing, Personal Contract Purchase (PCP) or Personal Contract Hire (PCH)?

In this article, we will break down all the various costs that are included in running an electric car, as well as the different ways to help decrease those costs. Specifically, we’ll cover:

  1. Summary of electric car costs.
  2. Comparing an electric car vs combustion car.
  3. A cheaper way to drive an electric car: electric vehicle salary sacrifice scheme.

Note: are you an employee and want access to an electric car? With loveelectric, you can save up to 60% by setting up an electric car scheme and the loveelectric salary sacrifice scheme. Learn more here! 

What are the various costs in an electric car?

Let’s break down the various costs you need to take into account when using an electric car.

Car itself (prices vary)

There is no denying that the most expensive part of owning a car is the cost of acquiring it

With electric cars, the full purchase cost is higher than combustion cars for a few reasons:

  • There are very few second hand electric cars.
  • The materials are more expensive due to newer technology.
  • Demand is outstripping supply.

Since there aren’t many second hand cars, your options if you want to outright own an electric car are:

  • Buy a car with cash.
  • Buy a car via Personal Contract Purchase (PCP) or Hire Purchase (HP).
  • Buy a car via car financing or with a bank loan.
  • Lease a car (with the option to: buy it at the end of the term with a final payment).

The average price of an electric car in the UK is £43,896, with the cheapest cars at around £20,000. 

electric car monthly cost in the UK.

However, buying a car outright might not always be the most logical option when it comes to electric cars for the simple reason that the technology is improving rapidly on a year to year basis

An electric car from five years ago would not be able to compete with today’s electric cars – which means that if you buy an electric car, the technology will get outdated quite quickly. We’ll discuss the nuances of this in more detail below. 

If you’re deciding between leasing and buying, we recommend reading our article on the topic: Lease or Buy Electric Car; Which One Is Right for You? 

Charging point & ongoing charging costs (£800 - £1,500, and between £3 and £30 per night)

There are a few places you’ll charge your car:

  • Your home
  • At work
  • On the road

You’ll need a charger at home so you can charge your car overnight. An at-home charger can cost between £800 and £1,500 to install.

electric car monthly charging cost in the UK.

Charging at home will cost around £31.2 for a full charge of a 60kWh electric car, which will give you 200 miles of range.

To charge your car at work can vary depending on your employer. But most workplaces offer electric car charging for free.

On the road, you’ll find public charge points where it’s free to charge your electric car as well. Then, you’ll find rapid chargers, which will cost between £6 and £11 for 30 minutes of charging.

Maintenance (varies, but £100 a year is an average)

The first thing to note about electric cars is that the cost of maintenance overall is a lot lower, since the cars are brand new.

Not only that, but electric motors have far fewer moving parts than a combustion engine, which means that service costs are a lot lower than with regular cars. 

There are some maintenance that will still take place though, including:

  • Tyres and brakes
  • Battery repair and replacement 
  • Windscreens and wiper blades
  • Coolant 

Unlike diesel or petrol cars, you won’t have to worry about:

  • Oil changes
  • Water replacements
  • Spark plugs
  • Exhaust
  • Clutch

Battery

It’s quite rare for your electric car battery to require repair or replacement. Whenever you have a service, the mechanic will check the health of your battery. Most batteries are covered by a warranty of seven years or more.

If your battery needs replacing after seven years, the cost could be between £6k - £10k depending on the whole capacity.

Brakes and maintenance

Depending on your driving, you might have to replace brake pads, discs and fluids, which can cost around £250.

The coolant usually costs £40 to replace.

MOT

The MOT will set you back around £30 to £50 per year.

Insurance (average of £470.57 per year)

Electric cars used to be more expensive to insure than combustion cars, but over time that gap has shrunk. GoCompare reported that the average cost of an electric car’s insurance policy is on average £470.57 per year, which is just a bit more than the overall average of £458.

There are some cases where the insurance is cheaper. For example, Insurer LV says that a Renault ZOE is 8% cheaper to insure on average than a Renault Clio (£287 and £311)

Taxes (close to £0)

The good news is that the UK government is incentivising the use of electric cars, which means there are a lot of savings to be made in taxes and grants.

Road tax (£0)

Road tax for combustion cars isn’t cheap, ranging from £10 to over £2,000 per year, depending on the amount of CO2 emitted per year.

Pure electric cars don’t pay any road tax. 

Benefit in Kind tax (2% of value of the car)

If you get your vehicle as a benefit via your employer, you’ll have to pay Benefit in Kind tax. With combustion cars, BiK tax can go up to 40%. This doesn’t apply to company cars.

With electric cars, BiK is capped at 2% till 2025.

Congestion charges (£0)

Congestion charges are on the rise every year in certain parts of the UK, specifically in London. In London, charges go up to £15 per day if you drive within the congestion charge zone.

With electric cars, drivers pay no congestion fees at all.

Grants

If you meet certain eligibility requirements, you might be eligible for a grant, which would further decrease the price of using an electric car.

Plug in Car Grant

The Plug-In car grant was issued by the Office of Zero Emission Vehicles (OZEV) and you can use it against a portion of the cost of buying a brand new electric car.

If the vehicle is approved by the government, you could get up to £1,500 off the purchase of the vehicle.

To be eligible, the retail price of the car has to be below £32,000. You can check on the HMRC website to see a list of eligible cars. To get this grant, you don’t have to apply for it – the manufacturer will include it in the price they provide.

Electric vehicle homecharge scheme

With this grant you get a 75% discount on the installation of a home charging point, with the maximum contribution of £350 per installation. As of March 2022, this grant is only available for flats and rental accomodations. There are a few additional requirements:

  • You must have off street parking.
  • Your EV has to be eligible.
  • You must either own or lease your EV.
  • The charger and installer must be EHVS approved.

Energy Saving Trust grant

If you don’t qualify for the grant above but you live in Scotland, there are still options: you can get up to £300 off the installation of your home charging point.

Workplace charging scheme

If you’re an employer interested in adding charging points to your workplace, you can apply for the Workplace Charging Scheme (WCS) that can cover up to 75% of the cost of the installation. You could get up to a discount of £350 per socket up to 40 sockets. You can check if you meet the criteria for both the applicant and site eligibility on the HMRC website.

Some other requirements are:

  • You must use an authorised installer
  • You must either own the premises or have permission from your landlord
  • You must have a Companies House Reference Number 

Read more about electric vehicle grants here: Government Grants for Electric Cars

Example: electric car vs combustion car

Let’s take two examples of different people who want to drive an electric and a combustion car to compare monthly payments. 

Andy buys an electric car via PCP, and Hannah gets a regular combustion car also via PCP. Andy wants a Vauxhall Corsa E and Hannah wants a Vauxhall Corsa.

The running costs are quite similar between both cars, but in this case the electric car actually comes out a little more expensive than the combustion car. Keep in mind that these are approximations, and you should always check with your provider and do your own research before making a decision.

A cheaper way to drive electric cars: electric vehicle salary sacrifice with loveelectric

There is an even more cost-effective way to access the best electric cars that is getting more popular: via an employer’s salary sacrifice scheme. 

As we mentioned above, the technology in electric cars is evolving so rapidly that it often makes more sense to switch cars regularly so you always have the cars with long range. 

This is why leasing a car might make more sense when it comes to electric cars: you use the leased car for 2 - 4 years, and then exchange your car for a better one once the lease is up.

With a personal car lease, you “rent” the car for a specific period of time, usually 2, 3 or 4 years and then return it for a new one once the term is over. Within the monthly cost, maintenance and servicing are often already included – although not insurance. Personal leases are a great way to access the cheapest electric cars.

But there is an even more cost-effective method: salary sacrifice schemes.

A salary sacrifice scheme is a scheme that is set up by your employer where you choose to sacrifice a part of your gross salary, in exchange for a benefit – in this case, an electric car lease.

It means a few things:

  • If you are in a higher tax bracket, this scheme will get you into a lower one.
  • You’ll pay less in income taxes and national insurance.
  • A business lease via salary sacrifice won’t require a deposit upfront, and will include insurance.

At loveelectric, we help employers implement a salary sacrifice scheme so employees have access to electric vehicles via a business car lease, and employers can offer a benefit that helps employees’ salary go further. We’re licensed by the Financial Conduct Authority (FCA) and we specialise in the electric vehicle salary sacrifice scheme.

Here are some of the benefits of implementing the salary sacrifice scheme:

Cheaper than buying an electric car and a personal lease

Since you’re paying for the electric car lease out of your gross salary, you could save between 30% to 60% compared to a personal car lease.

You’ll get savings in three ways:

VAT

Almost all consumer goods get charged VAT at 20% – when purchasing or leasing a vehicle outright, you’d need to pay that VAT. When using an electric car scheme, the employer is responsible for the lease so they’ll be liable for the VAT. However, they won’t lose out either, since they’ll be able to reclaim 10% of that from the government.

Income tax

Since you’re paying for the lease before you get taxed (gross salary), your net income will decrease, which means you’ll be paying less income tax.

National insurance

Similar to income tax, the more you earn, the more national insurance you have to pay. By sacrificing some of your salary to pay for a lease, your salary will decrease and therefore so will your national insurance contributions.

There are a few other aspects that make this scheme cheaper:

  • You won’t have to pay a deposit, making it cheaper than a personal car lease deal.
  • Benefit in Kind tax is capped at 2% until 2025.

Finally, at loveelectric, we’re a broker rather than a leasing company. That means we have access to over 300+ dealerships and can access the best cars at the cheapest rates.

Let’s take another example and compare Andy with three other people who have electric cars. All three decide to get an electric car via the salary sacrifice scheme: 

*Prices accurate at the time of writing, found on https://www.loveelectric.cars/electric-cars for a 5000 36month contract for a higher earner.

As you can see, accessing a car via the salary sacrifice scheme is a lot more cost effective than via PCP. In some cases, it can be even cheaper than a combustion car via PCP.

Take into account that the cost will vary depending on your salary range, your postcode, annual mileage and the length of your contract. In general, access an electric car via salary sacrifice is cheaper than leasing or buying and electric car:

Access an electric car via salary sacrifice

Everything is included

With personal car leases, you’ll often have maintenance and servicing included. But you’ll still have to pay for insurance and a deposit.

With car leases via the salary sacrifice scheme, you’ll have even more included, such as:

At loveelectric, we help companies set up and manage the entire experience of an electric car salary sacrifice scheme. We’ll help educate and inform employees, set up payroll and manage the ordering and delivery of the car. 

Learn more about how it works here: How loveelectric works.

For employers, it’s a great employee benefit

For employers, the salary sacrifice scheme is a great benefit to offer employees as it helps make their salary go further.

The scheme is free to implement for employers, which means it’s often a no-brainer. As an employee benefit, offering affordable electric cars helps boost morale and helps employees feel appreciated.

More environmentally friendly

As cars that run solely on electricity, electric cars are a lot more environmentally friendly than their combusion counterparts. EVs emit less pollution throughout their entire lifespan, especially if the electricity comes from renewable energy sources.

If your company is hoping to reach ESG targets, implementing the salary sacrifice car scheme is a quick and simple way to help reach those targets. If your company is hoping to build towards a greener future, electric cars are a great way to show your commitment.

The electric vehicle salary sacrifice scheme is one of the most cost effective ways to access a electric vehicle. At loveelectric, we’re hoping to help democratise access to electric vehicles with the salary sacrifice scheme.

You can learn more about our story here: Electric Cars are Expensive. Here’s How We’re Democratising Electric Vehicle Access At Loveelectric

We hope this article helps you understand better how much it costs to run an electric car and how it compares to combustion cars. As we mentioned above, there are multiple ways to access an electric car, and leasing often makes more sense as the technology keeps improving. You’re welcome to view our selection of electric cars and see if any would interest you.

If you’re interested in learning more, send us an enquiry to see how we can help you out!

Energy price cap announcement: are Electric Vehicles still cheaper to drive?

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UPDATE: Jeremy Hunt announces bill freeze U-Turn (October 2022)

The energy price cap previously announced by Liz Truss will now only remain in effect until April 2023. 

In a press statement, Jeremy Hunt has announced that Truss’ latest economic policy that promised the average household to keep its energy bills under £2,500, will only be in place until April 2023.

To prepare for April 2023 and beyond, Hunt has announceda Treasury-led review into how we support energy bills beyond April next year. The objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need…the new approach will better incentivise energy efficiency.”

We'll be sure to update this blog in April 2023 to keep you updated with the latest electricity prices.

UPDATE: Liz Truss announces a £2,500 freeze on the average annual household energy bill

The UK’s newly appointed Prime Minister - Liz Truss - has announced an energy bill price freeze. Here is a brief rundown of what this means for the average household over the next two years:

  • Average cost of electricity will be 34p/kWh
  • The average household energy bill will rise from £1,971 to £2,500
  • Price freeze will come into effect on October 1st 2022
  • Prices will stay frozen for two years; until 2024
  • It supersedes any subsequent Ofgem price cap announcements. 

Under the proposed price cap, the average annual energy bill was set to cost £3,549 - this price freeze should save most households around £1,000 per annum for the next two years.

In regards to what this means for EVs drivers, we’ve updated our comparison figures in the section below.

When it comes to the running costs of a car, electric vehicles have always been far more affordable than their petrol/diesel counterparts. One of the biggest savings is at the pumps. But with the price of electricity soaring, are the numerous benefits of electric vehicles enough to offset the rising cost of charging?

The UK's energy regulator Ofgem announced in August another increase in the price cap for the nation's gas and electricity. Bills were set to rise by around £900 over the next 12 months (inclusive of the £400 Government grant), with households across the country bracing themselves for the impending winter and heftier utility bills.

Ofgem's announcement follows on from its April 2022 price cap rise, which saw energy bills increase by £693 for around 22 million customers. They've also tweaked the rules around the frequency of price cap changes. Historically, price caps were only reviewed every 6 months. Moving forward it'll be every 3 months.

For those looking to save month-to-month on their vehicle cost, there's just one important question: is driving an electric car still cheaper than a petrol/diesel equivalent?

In this article we cover:

Note: Looking to get started with a salary sacrifice scheme that has no hidden cost and offers the best early termination policies? Get started with loveelectric for free.

Fuel price comparison: electricity (kWh) vs. petrol/diesel (pence per litre)

The electric vehicle boom has seen UK roads flooded with eco-cars whispering past. When they became mainstream, the cavernous gap between the cost of petrol and electricity made the switch to an EV a no-brainer. But the gap has narrowed, with many asking if it's still worth it.

Even though energy prices continue to rise, it's important to keep perspective. The price gap between recharging with electricity and filling up with petrol/diesel is notable - the bottom line is that electricity is still a cheaper 'per mile' solution than traditional fuel.

Pence per mile comparison

In 2021, those paying by direct-debit spent around 18.5p per kWh on electricity. After a seismic shift in the UK's energy supply chain, the latter end of 2022 looked to push that average cost up to 51p per kWh.

However, after the introduction of an energy bill price freeze, the average price is to settle at 34p/kWh for the next two years.

Cost as per Ofgem’s price cap:

Without utilising a variable EV tariff and a smart charger, fully recharging the Vauxhall Corsa E's 50kWh battery at the 52p per kWh rate would have cost £26. With a range of 209 miles, that’s 12.4p per mile.

New cost after £2,500 freeze:

With the average annual energy bill now frozen at £2,500, the average cost of electricity will sit around 34p/kWh. This results in a cost-to-charge figure for the Vauxhall Corsa E of £17. With a range of 209 miles, that's just 12p per mile.

Cost using an EV-friendly tariff:

However, by utilising an EV-friendly tariff, the Corsa E can be charged for four hours a day at only 4.50p/kWh. If only charged during these off-peak times, a full charge is only £2.25.

That's just 1.07p per mile.

The petrol-powered 1.2L Corsa achieves 49mpg. Petrol (and diesel) prices are equally as volatile, but using an average petrol price of £1.73 per litre grants the 1.2L Corsa a cost per mile rate of 16p.

What's the cheapest way to charge an electric vehicle?

Calculating the cost to charge an electric vehicle rests solely on the price per kWh. But unlike petrol prices - which may only differ by a few pence per litre depending on the filling station - the charge for electricity can vary wildly. With a bit of research and due diligence however, charging your EV can still be incredibly cheap.

There is one general rule of thumb though - it's almost always cheaper to charge at home.

Smart Charging

For maximum savings, a smart charger should be used in conjunction with a variable energy tariff.

A standard home charger behaves like any other domestic device; it dispenses electricity when you plug it in, then stops when you unplug. Smart charging however, allows drivers to utilise the lowest possible electricity tariffs by scheduling when the charger is active. It's better for the environment too.

There's a more comprehensive breakdown of energy cost below, but the price paid for electricity is largely set by two factors: the cost an energy retailer purchases it for on the wholesale market, and the time of day it's consumed by a household.

In the evening, demand for electricity and gas is at its highest. This drives the price up and forces the grid to supplement the increased demand with gas-fuelled power stations. It's worse for the environment and costs more. If possible, don't charge your EV as soon as you're home from work.

A smart charger utilises windows of low energy demand during off-peak hours. This typically means the power comes from renewable energy sources rather than gas, driving both the cost and environmental impact down.

Variable energy tariff

Due to the monumental shift in motoring habits, many energy suppliers now offer EV-specific energy tariffs.

These tariffs differ from regular deals by including a few hours of low-cost, all-green, energy - perfect for recharging an electric vehicle overnight.

As previously mentioned, installing a smart charger is vital to making the most of these tariffs. Most suppliers only offer these windows of reduced cost between midnight and 4/5am. Programming the smart charger when to charge, and how long for, ensures the EV is primarily charged at the far cheaper pence/kWh rate.

We've outlined the best tariffs for EV drivers below.

Install photovoltaics

Utilising photovoltaics (PV) allows you to create renewable, cost-free electricity. These are very similar to solar panels, except PVs convert solar power into electricity, rather than heat. Relying on solar power may seem like a fruitless effort under UK skies. But the annual electricity production from a PV in Britain is surprisingly high.

On average, one kilowatt of panels will generate 700 - 900 kWh of electricity every year. In a domestic setting, it costs around £1,500 per kilowatt to have the array installed (figs. from early 2020).

For a typical household, a south-facing 3.5kW photovoltaic array is more than sufficient and would produce around 3,000kWh annually. That's enough to fully recharge a Vauxhall Corsa E 60 times.

So how long would it take before you started to save? Well, a 3.5kW array would cost roughly £5250 to be installed. By taking a base price of 51p/kWh, a Vauxhall Corsa E would only need to be recharged 202 times for the solar array to have paid for itself. With the 3,000kWh annual output, that would take just under 4 years.

Charge at work

The absolute best way to enjoy zero carbon motoring, is by charging for free!

Many employers across the UK have ramped up the installation of charge points at office spaces in response to the vast uptake of EVs. The Government has even introduced a Workplace Charging Scheme - greatly reducing the cost of installing chargers. Workplace charging can be a great incentive for prospective employees, as well as encourage the uptake for current ones.

Workplace charging is often at a per/kWh rate far lower than you'll find out on the open road, too.

Top 3 EV-Friendly Energy Tariffs

Below are our top picks of the best energy tariffs for electric vehicle owners.

Due to the energy crisis and preferential rates, some tariffs are only offered to existing customers and won't appear on price comparison sites. However, there is a workaround if they're not currently your supplier. If you'd like to take advantage of these cheaper rates, simply switch to another of its accessible tariffs first. You'll then be a fully-fledged customer and thus be able to then access their EV-specific tariffs.

It's also important to note that because these tariffs are aimed at EV drivers, some suppliers may ask for proof of electric vehicle ownership (this doesn't mean bought outright - salary sacrifice, personal lease etc. still count). Your home must also have a SMETS2 smart meter installed and you consent for automatic readings to be sent off every 30 minutes.

Another thing to look for is the unit rate vs. standing charge when comparing tariffs. The unit rate is the headline figure of the tariff - how many pence is it per/kWh? The standing charge is a daily rate that you'll pay regardless of the energy used.

The below rates are for a Yorkshire postcode.

  • EDF GoElectric 35
    EDF offers their lowest off-peak rate for five hours between 00:00 and 05:00 every day, ensuring the energy provided is 100% zero carbon renewable electricity.
    Our postcode rates set the standing charge at 49.53p/day with off-peak electricity at 4.5p/kWh.
  • Octopus Go
    This deal offers cheaper rates during specific time periods. Their postcode calculator lets you view your specific rate during these off-peak hours, which is obviously the best time to charge. On our example, we are able to get four hours of electricity for 7.5p/kWh between 00:30 - 04:30, with a standing charge of 48.26p/day.
  • OVO Drive + Anytime
    This bundle tariff takes a slightly different approach to reducing off-peak cost. Over the course of a month, a household's electricity is charged at the normal rate of an OVO energy deal. Then, on the first of the month, credits are added to the account depending on how much electricity was used to smart charge an EV. This credit system ensures that each month, the bill equates to an EV charging rate of 5p/kWh.

Why has the energy price cap risen again?

The price households pay for each unit of gas and electricity, is wholly determined by the wholesale cost an energy provider originally buys it for.

It's an incredibly volatile market. The invasion of Ukraine also brought into sharp focus how reliant Western countries are on the supply of Russian gas. In 2021, around two-fifths of the EU's gas was imported from Russia. Once sanctions were put in place following the February 2022 invasion, Europe and America began having to invest in alternate sources of gas and infrastructure, as the Russian state essentially turned off the tap to Europe.

Additionally, due to knock-on effects of the pandemic, domestic gas and electricity stores were depleted more than usual towards the end of the winter in 2021. This exacerbated the reliance on importing our energy and drove the wholesale cost up.

That extra cost is then passed onto the average household, resulting in the dramatic rise in monthly bills the country is currently experiencing. Moving forward, the government will provide £400 of support per household - an automatic monthly credit of £66 or £67 between October 2022 and March 2023.

What about renewable energy?

Due to the financial structure of the energy industry, the price of electricity (even green, renewable electricity) is almost wholly set by the price of gas.

In the UK, there is a wholesale price for electricity, regardless of its production. So, even if you're with a provider that powers your home using renewable energy, it still has to pay for renewable certificates that inflate the price up to the market rate of gas. Older wind farms for example, charge retailers a 'renewable obligation certificate', the cost of which is then passed on to the consumer. That system is changing with newly built wind farms via the introduction of 'contracts for differences', fixing the rate of the power provided.

Certain energy suppliers are campaigning to change this. By reshaping the structure linking renewable energy and traditional power stations, the cost for the consumer will be driven down and bolster the UK's efforts to achieve net zero.

Will the increasing price cap affect EV uptake in the UK?

We don't have a crystal ball, but we do loveelectric and believe switching to electric vehicles is the future of motoring. Especially if the UK is to hit its net zero targets by 2050.

It may seem like everyone has been talking about electric cars for years, but there's only been a vast influx of registrations since 2020.

In 2019, only 37,850 electric vehicles were newly registered in the UK. By 2020, that number had almost tripled to 108,000 registrations. The following year, another 191,000 EVs put rubber to the road.

These numbers reflect a huge gain in market share for pure electric vehicles, squeezing out diesel vehicles and taking a chunk of the petrol-powered market.

For comparison, by the end of July 2021, there were 101,870 new diesels on the road for that year. By the end of July 2022, that number was down 48.7% to 52,238. Petrol vehicles fared slightly better during the same dates, but still saw a dramatic drop of 19.2% - 497,833 in July '21, down to 402,468 in July '22.

How about pure electric vehicles? By the end of July 2021, just over 85,000 BEVs had been registered that year. Come the end of July 2022, that figure had risen to 127,492 registrations - a 49.9% increase compared to the year prior.

Consider the exponential growth of electric vehicle uptake in the context of global events.

Supply chains are still vastly reduced compared to their pre-pandemic capacity. Energy bills are the highest they've ever been. Yet still, BEV registrations continue to grow year on year.

What's the most affordable way to get an electric vehicle?

One of the largest barriers to entry for an electric vehicle is the sticker-price cost. We know. In fact it's why loveelectric was started in the first place. There's no getting around the fact that these are cutting-edge vehicles, packed with industry-leading tech developed from huge research and development budgets. EVs simply cost more to build.

With purchasing outright out of the question for most people, HP or PCP still presents a large monthly cost. Personal leasing is the next most sensible option, but also requires a large deposit at the beginning of the term.

Salary sacrifice

But there is another way. Salary sacrifice; the most accessible and affordable way to get behind the wheel of an electric vehicle. There's no deposit required and can be 50% cheaper than leasing.

An EV salary sacrifice scheme is a great way for employers to offer unrivalled value to their employees. It is cost neutral for the company, helps retain the most valuable team members and bolsters green credentials.

There's a lot to consider when it comes to salary sacrifice. Whether you're an employee or employer, and finding the best scheme to fit may seem like a daunting task. Our guide to the best salary sacrifice schemes delves into the nuances of all that's on offer, providing as much information for employees and companies alike.

The electric vehicle revolution is fully underway, why not take a look at all the reasons to loveelectric?

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