Many employees enjoy the convenience of a company car. Often, they need one to drive to different locations to perform their job. Businesses that provide company vehicles may want to consider an EV (electric vehicle) as a good investment.
EVs are becoming more mainstream than ever. Now that more options are available and better infrastructure is taking place, an EV could be a better choice for a company car.
Before you make your final decision, it’s vital to determine whether an electric company car is right for your employees.
Advantages of an EV as a Company Car
Here are the advantages that make an electric car a great option for your company.
1. Electric Vehicles Have Tax Incentives
The U.S government passed a tax credit in a 2009 bill that applies to electric vehicles made in 2010 and up. This helps drive down the initial cost of an EV. Companies still have to pay the price they negotiate for the car, but they can claim the credit to lower tax liability.
Employers that claim these federal tax credits can receive up to $7,500 based on the EV type.
2. Running Costs Are Less for EVs
The running costs for company cars are the biggest, even for personal use. Even though employers do not incur private use costs, business use is still a factor.
You also have to think about the maintenance costs when it reaches the point of replacement parts. Expenses are lower for EVs. A conventional vehicle has over 1,000 moving parts, whereas an electric car has 200. That means reduced repair costs and fewer parts to replace.
Additionally, the charging costs for an electric car are much lower than fuelling a vehicle that runs on gas. In fact, you can charge the Mustang Mach-E, which has up to a 300-mile range, for only a few dollars.
3. Charging Stations Are Becoming More Common
Although the infrastructure is not there yet, many companies are installing new charging stations. There’s also an increase in fast-charging stations on highways, which makes electric cars more practical to take on business trips.
For instance, the Tesla Model 3 can drive up to 250 miles on a full charge before you have to power it back up again for one hour.
Disadvantages of a Company EV Car
What are the cons of an electric car for employees?
1. EVs May Not Be Viable for Long Business Trips
Although charging stations continue to increase, finding one in a rural area is challenging. Plus, if you’re taking a long business trip, an electric car still takes time to charge fully. Depending on the car and battery size, sometimes it can take up to two days to get a full charge.
Even if you’re at one of the fastest charging stations, you still need to wait at least 30 minutes before the battery reaches 80% capacity.
Additionally, the driving range of a gas-powered car is much more effective. An electric vehicle can range anywhere from 100 to 400 miles, depending on the EV.
2. Higher Upfront Costs
You save more on fuel, maintenance and tax credits with an electric vehicle. However, the initial price for most EVs is much higher than a gas-powered car. Over time, this drawback will change for the better. Regardless, some employees may be reluctant to switch to a full EV.
3. Battery Replacement Is Costly
Although you have little maintenance for an EV, the price to replace the battery is significantly high. In fact, it can cost anywhere up to $20,000. Some EVs have manufacturer warranties that can last up to eight years and 100,000 miles, which may not be a concern for employers.
Is Owning an EV the Right Choice?
Expect the cons to change over time. Maybe owning an EV now might not be the right time — but an electric car will be the norm within a few years.
More innovative, practical EVs and charging stations will be available over time. However, if your company is committed to bettering the environment and you’d like to save money in the process, the time to buy an electric company car could be now.