Are businesses still leasing electric cars after the Government’s 2035 extension announcement?

After the governments 2035 extension announcement are businesses still leasing cars?

The rocky news in September from Rishi Sunak’s Government suggested that there may be a re-think on fuel choices in the UK; the previous ban on the sale of new combustion cars in 2030 was amended to 2035. The immediate reaction from many of us in the EV-sector was admittedly one of frustration and not just because of the literal change.

Indeed, much of this is about intention, for our Government and policy makers must stand alongside us with similar faith and confidence in their legislation to confirm that the move towards to all-electric transportation is not only mandated but will in fact be a positive change for many fleets, salary sacrifice schemes and retail customers.

In changing the rule, the message becomes more diluted in that it appeared to say the UK is not ready to convert to lithium battery tech - there are insufficient charge points, the cars are too expensive, there are not enough options and EVs are not practical. Much of this rhetoric has been propelled across many media outlets over that last 5 - 7 years, as the UK has tried to come to grips with the cultural change to our automotive demographic.

But many of the messages are not true, with 2023 (and beyond) actually being a perfect time to sell your petrol/diesel and shift towards a zero-emission vehicle. The great team over at Zap Map  have produced some amazing stats and figures which show there are now over 48,450 devices in over 29,000 locations, making the UK one of the most progressive countries in the world for infrastructure.

And as our leading website, e-car lease sets out, there are more than enough brands and car choices - literally hundreds of hatchback, SUV, saloon and estate options to review. As at September the average range of an EV is some 227 miles and the average rapid charge capability is 157 kW DC! 

Considering the average 0 - 62 time is under 7 seconds for an EV, this change will not sacrifice the enjoyment a customer has. But aren’t running costs expensive on an EV? Yes, the price per kWh on electricity has increased since pre-Covid days, with the 34p kWh max but we are now starting to see falling prices and more energy deals with Ofgem confirming even further reductions for Winter 2023 .

Leading energy companies like E.ON are now via their Next Drive tariff  offering 9.5p kWh to charge between 12 (night) and 7am. For the amazing ID.3 shown below, this means that the £20 on the standard tariff would instead be just £5.50!

For the leasing industry, our enthusiasm and customer investment hasn’t changed, with us - plus the manufacturers, finance companies and legislation – all still fixed to a green future. What is probably worth highlighting to the UK is that the extension does not impact the ZV Mandate from the Government.

As set-out in the table below, Government is still putting in place obligations, which are underpinned by financial penalties, so that car manufacturers ensure a certain percentage of their new cars are zero-emission (i.e. electric). There has just been a slight adjustment by moving the 2030 to 2035, with there still being an 80% threshold in 2030.

The percentage of new cars which must be electric if sold in the UK

The commitment means that more EVs will be coming to the UK and with an improving charge point infrastructure, reduction in leasing costs and a considerably beneficial tax regime for businesses using all-electric tech, there will be no reduction in enthusiasm for this platform.

For the business, and the employee, there are considerable tax savings and cost-savings in moving to an electric car and HMRC have not indicated a change in their policies. For the more financial sage customer, this means access to a beneficial arrangement along with the enjoyment which an EV brings. What needs to be made clear is that it isn’t a sacrifice in moving into an EV with performance, technology and practicality (like boot space and towing capacity) all present.

And will the new VW ID.3 be the perfect company car option?

And the VW group are contributing to the fleet market with yet another improvement to their existing ID.3 hatchback. Having launched in 2019, this e-Golf replacement has been one of the best-selling EVs in the UK. And for 2023 (and beyond) the EV has received a beneficial facelift plus a few nice tweaks. UK leasing customers can choose between:

•  Pro (from £37,1115) - this will include 18” alloys in black, high beam assist, wireless charger, 10-colour ambient lighting, electrically foldable mirrors, heated windscreen washer jets, LED headlights, navigation, comfort pack, heated front seats, climate control, adaptive cruise control, lane assist, parking sensors, power assisted steering and road sign display; and 
•   Pro S (from £42,870) - this will include the same specification albeit a different battery. 

And how does the VW ID.3 Pro perform?

The RWD hatchback will have a 58 kWh usable battery which will offer 0 – 62 times of 7.3 seconds, 99 mph top speeds and 150 kW (or 201 hp). Expect a combined winter range of 180 miles with warmer weather allowing for 250 miles. On charging, the 11 kW AC max will allow 6 hour and 15 min 0 – 100% charging times with the 120 kW DC maximum allowing 32 minute 10 – 80% times. A cargo volume of 385L is available with this car. It has a vehicle fuel equivalent of 153 mpg. This option cannot tow. This EV will have no Bidirectional charging.

And how does the VW ID.3 Pro S perform?

The RWD hatchback will have a 77 kWh usable battery which will offer 0 – 62 times of 7.9 seconds, 99 mph top speeds and 150 kW (or 201 hp). Expect a combined winter range of 235 miles with warmer weather allowing for 325 miles. On charging, the 11 kW AC max will allow 8 hour and 15 min 0 – 100% charging times with the 170 kW DC maximum allowing 28 minute 10 – 80% times. A cargo volume of 385L is available with this car. It has a vehicle fuel equivalent of 147 mpg. This option cannot tow. This EV will have no Bidirectional charging.

In terms of the car shown, the old Volkswagen ID.3 HATCHBACK 150kW Family Pro Performance 58kWh 5dr Auto [120kW Ch] (Pure Electric Vehicle), this is based on the following configuration: 

•  Moonstone grey Solid paint
•  Flow design/Art velour microfleece cloth - Dusty grey/soul black
•  Mode 3 / Type 2 Charging Cable (Public Charging & home wallbox charger )