Every year we carry out research into the benefits sector and we receive the results in November. Never before have we seen such a year-on-year change in employee sentiment and the main reason is electric vehicles.
Electric vehicles have gone from 3% of the Tusker fleet in 2019 to 20% in 2020 and that share looks set to continue growing because 63% of respondents said they’d consider electric for their next car.
That statistic fits with the trend we recorded in 2020, when electric vehicles accounted for 50% of our deliveries, with hybrids making up a further 20%. Survey respondents said their main reason for going electric was the environmental benefits closely followed by being able to charge at home and being taxed less.
WHO’S MOVING TO EVS?
The excitement around EVs has come from all levels. We’ve seen significantly more 40% taxpayers switching out of their company car into a salary-sacrifice car as they combat growing Benefit-in-Kind tax bills, particularly when driving a diesel. In fact, 95% of those higher-rate taxpayers chose a ULEV, as did 43% of basic-rate payers.
The most popular cars chosen by 20% taxpayers included the BMW i3, Kia e-Niro, MG ZS, Nissan Leaf and Peugeot e2008.
This contributed to the top 10 most ordered car list changing dramatically from 2019 to 2020. In 2019, the Tesla Model 3 was the only ULEV in the top 10 where in 2020, there were eight EVs, one PHEV and just a single petrol car.
The three most ordered vehicles in 2020 were pure electric vehicles, whereas 2019 featured mostly petrol city cars and SUVs.
The main reason for this radical market shift is the change in the BIK rates, making electric vehicles highly affordable, together with the huge amount of education that is going on within the industry. Importantly our survey shows the education is working as employees are better informed than ever, with 36% of those considering an electric vehicle confident in naming three or more local charging locations.
Our ongoing policy of dispelling myths and education about EVs and hybrids has also helped drivers’ knowledge of salary sacrifice. Over a half (51%) of survey respondents said they knew what a salary-sacrifice car scheme is and 45% of those associated salary sacrifice as the cheapest way to drive a new electric vehicle without spending a large amount upfront.
A mismatch between a driver’s perceived mileage and an EV’s range has often been a barrier for potential electric car users but with a host of longer-range cars being launched we are seeing this change. Indeed, 79% of survey respondents admitted to driving less than 150 miles a week, which means models such as the Tesla Model 3 (263 miles), the Audi e-Tron (220 miles) and even the new Vauxhall Corsa-e (200 miles) will cater for a week of driver journeys on one charge.
It was interesting that respondents guessed on average an EV can cover 125.89 miles before it needs charging. When it came to charging times, employees surveyed guessed that it takes an average of 77.42 minutes to charge the average EV to 80%.
Salary-sacrifice car schemes put EVs into the reach of the majority of employees, more so than a traditional contract hire scheme. Traditional schemes also rarely feature the “package” of insurance, maintenance and servicing, road tax, tyres and breakdown cover. The message of affordability of the schemes is getting through to drivers with 75% of survey respondents aware that EVs fall into their budget.
In more ways than one, 2020 was a year to remember. Our fleet reached a tipping point as 70% of deliveries were zero-emission and hybrid cars. That number will continue to rise as we predict more drivers moving away from traditional contract hire and cash-for-car schemes into salary-sacrifice because it gives them fixed-cost motoring at the same time as reducing Benefit-in-Kind tax bills.
But the real winner in all this is that average CO2 emissions continue to fall. In January 2019, the average car chosen by a higher-rate taxpayer was 120g/km, which fell by 66% to just 40g/km by November 2020. We are in no doubt that this figure will fall again in 2021 supported by further driver education, a growth in salary-sacrifice as fleets move towards more of a blended car policy and more state-of-the-art new cars being launched by automotive manufacturers.
Kit Wisdom, Operations Director, Tusker