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EV Blog: The importance of Salary Sacrifice to Employers

Happy December! The countdown to Christmas begins, but that’s not going to stop us keeping you up to date with the EV and salary sacrifice world.

Last week, Fleet News released an article discussing how salary sacrifice is ‘key’ to the mass adoption of electric vehicles. We have picked out some of the main points to illustrate how important salary sacrifice is becoming to employers and employees.

The survey was carried out on over 2,000 in-work drivers. The results help us to identify the ideas around salary sacrifice and electric vehicles from an employee’s perspective.

‘More than half of drivers (60%) said they would choose a fully electric car if this funding method (salary sacrifice) was available. Without the salary sacrifice scheme, a similar amount (61%) of employees said they would buy a petrol or hybrid vehicle instead’

This suggests a huge interest in salary sacrifice and how it’s not about individuals not wanting to drive an electric vehicle, it’s about the affordability of one.

The research clearly shows that demand is definitely there for EVs, if the right incentives are in place.

Electric Vehicle Running Costs

Fleet News went onto to identify the running costs were the most important factor when choosing a new car, with 58% of respondents saying that they find running a petrol or diesel car expensive.

Of those surveyed, the running costs of their next vehicle was the biggest factor in the choice of their next car (61%), followed by the purchase cost (54%) followed by style (32%) and safety (31%).

Since running costs are the most favourable factor in choosing a new vehicle, the analysis used a comparable combustion and electric car, in this case a 58kWh Volkswagen ID3 and a petrol Volkswagen Golf equipped with a 130PS 1.5-litre petrol engine. They found an EV driver would be better off even before the other additional financial benefits of salary sacrifice have been factored into the calculations.

If the ID3 is charged at home via a 7kW home charger at 34p/kWh, and the Golf is fuelled at the current average cost of 165.5p per litre and both are driven for 10,000 miles per year, the electric ID3 would be 7.3p per mile cheaper to run, which equates to a saving of £60.80 a month.

Proof that it remains significantly cheaper, “even with a higher rate of electricity, to run an electric vehicle”

Our thoughts

With the above information from the research sponsor and Fleet News, we can instantly see that salary sacrifice schemes should definitely be on the agenda for all businesses. These incentives are vital for the electric vehicle market and for employees. This along with the benefit it has on the environment and a company’s green credentials, makes electric vehicle salary sacrifice an obvious choice!

Let’s recap on the benefits of a salary exchange scheme:

  • Free to set up
  • Includes servicing, maintenance & repair, insurance, breakdown cover and tyre replacement costs
  • Retains, attracts and motivates talented employees
  • Removes inherent risks around ‘grey fleet’ usage
  • Early termination cover

These are just some of the benefits that salary sacrifice has to offer.

With that said, in a previous article from Fleet News discussing the lack of awareness around salary exchange stated that, ‘just one-in-six HR professionals are aware of salary sacrifice schemes for cars’.

As an electric vehicle consultancy who provide salary sacrifice schemes and vehicle leasing, it is our job to educate as many employers as possible on the endless benefits of salary sacrifice to both you, you business and your employees.

You can read the full article here: Sal/sac is ‘key’ to the mass adoption of electric vehicles | Fleet industry (fleetnews.co.uk)

To find out more or begin your journey to electric, contact us!

t: 0800 975 5900

e: enquiries@e-ve.co.uk

w: www.e-ve.co.uk