EV Discussion thread

JKenH

Grumpy_chap said:

What proportion of the population are actually able to take advantage of SS for an EV?
Can anyone explain the SS process and the effective saving that it means?

This was my answer to your first question a couple of weeks ago. 

There are loads of articles on the internet about how SS schemes work. Might be worth a Google.

mgfvvc

daz061 said:

Thing that bothers me about these EV's is that the battery technology is currently the same as most things eg, my laptop and my laptop after a year doesn't hold charge like it did new so what's to say these cars after 5 years or so getting like a 3rd or half miles out of a full charge.

Electric cars have been around for more than 10 years. Tesla's data indicates that Model S and Model X batteries typically retain around 90% of their capacity after 200,000 miles. The design life of those batteries is 500,000 miles. They don't yet have enough data to do a similar assessment on Model 3 and model Y. Obviously with more experience battery design should improve and battery life should extend further.

Grumpy_chap

Thanks for reminding me of the previous answer about availability of SS.

BUT, 60% of businesses do means 40% of businesses don't.  Given the large set of each group, assume that means 40% of employees don't - that is harsh on them as it seems to be entirely at the whim of the employer whether or not to offer SS for car.  

EDIT - I read that article again:
https://www.fleetevolution.com/salary-sacrifice-schemes-popular/
It seems inconsistent as the headline is "one-fifth of companies offer SS" - that equals 20%.  Then quotes Personnel Today saying "60% of business offer SS" and then the paragraph ends "almost a third of employers offer car SS".  It's possible for all the numbers to be correct - some employers may offer SS for childcare vouchers or pension but not car.  It does seem, though that only a third of employees would be offered car SS...

Then, anyone with unearned income (pensioner / BTL Landlord / private family trust income etc) can't avail of SS.  This does seem to mean the very large majority of the population are not able to take advantage.

JKenH said

There are loads of articles on the internet about how SS schemes work. Might be worth a Google.

I have merrily googled away and the information I found seems to suggest the schemes are all lease (not PCP as my brother seems to have) and the examples seem to support my calculation that it is a 30% saving.  Which is huge.  A couple of random examples:

• Corsa for basic rate tax payer, lease £395 per month, salary deduction £283 per month, 72% (saving 28%)
• TM3 for higher rate tax payer, lease £545, salary deduction £427, 78% (saving 22%)

I don't understand why the examples have a lower saving for the higher rate taxpayer.

It seems entirely illogical to have a tax incentive to encourage the take-up of EV, but for that to be restricted to only employees of 60% of companies, which is going to be a minority of the population.

Solarchaser

Bik tax rate increases at higher tax levels.
I think that's what you are asking. 

If you think about it in terms of what those people would normally be paying for a diesel vehicle in BIK, then its a very significant sum of money.
Thousands per year the luckier amongst us save going electric at current BIK for electric cars vs diesel.

shinytop

It does seem unfair.  But I don't think wealthy pensioners or others who can't SS will get a lot of sympathy when they want their £50k cars a bit cheaper.  I suspect any 'levelling up' will involve a different (and for some) a less welcome solution. 

Personally, I'm not happy about my taxes partly paying for someone's £50k plus Tesla. (other EV brands available).   

Grumpy_chap

shinytop said:

It does seem unfair.  But I don't think wealthy pensioners or others who can't SS will get a lot of sympathy when they want their £50k cars a bit cheaper.  I suspect any 'levelling up' will involve a different (and for some) a less welcome solution. 

Personally, I'm not happy about my taxes partly paying for someone's £50k plus Tesla. (other EV brands available).   

Thanks - I must admit I really had not thought of how big a tax break SS for EV really is until my younger brother said he was getting a car with effectively 30% discount.  That does seem to stack up, though I am unsure how the scheme works being a PCP deal rather than lease (difference being the option to buy after 4 years).

I am not offering sympathy, but if this tax break is offered to encourage the take-up of EV, it seems entirely illogical to allow that to (30 or 60 percent) of employees where the employer can be bothered, but not to anyone else.  It is not even a managed and targeted set of people picked out to benefit for some logical reason.  

JKenH

daz061 said:

Thing that bothers me about these EV's is that the battery technology is currently the same as most things eg, my laptop and my laptop after a year doesn't hold charge like it did new so what's to say these cars after 5 years or so getting like a 3rd or half miles out of a full charge.

I’ve dug out what figures I can find for my Leaf. Unfortunately I’ve archived the screenshots from when I bought the Leaf in 2020 but found these figures for April 2021 and May 2022 to demonstrate the degradation 

8 April 21 SoH 93.88% and on 100% charge 37.1 kWh 5942 miles.
2 May 22 SoH 93.61% and on 100% charge 37.0 kWh 13236 miles

Yes there was around 6% degradation in year 1 but since then I have lost 0.27% of the original battery capacity and around 0.2 miles of range over the last year/7k miles.

I don’t know how the next year will go. My son’s 5 year old  30kwh Leaf is down to around 85% of its original capacity. There is degradation, that can’t be denied, but it is nothing like what you get with a laptop. Remember most manufacturers typically warrant  their batteries’ performance, in the case of Nissan I believe it is 70% of original capacity after 8 years/100k miles. 

1961Nick

The BIK rate for BEVs was 1% last year & it's 2% this year (A BMW 440i is 37%). 

A company buying a BEV gets a 100% first year capital allowance (18% pa on the reducing balance for other vehicles) - that's around a £11K reduction in corporation tax for buying a TM3 LR. (You can also claim against the previous year's profit & get a refund if you're not using the full allowance this year.)

A company leasing a vehicle can charge 100% of the cost to P&L & also reclaim 50% of the Vat.

The latest batch of company car lease deals include an option for the driver (not the company) to purchase the vehicle at the end of the lease. In practice it's the same as a PCP with a balloon, but legally it's a lease because the lease company owns the vehicle throughout.

michaels

I did some calcs that Telsa/their customers shared in some way might be benefiting by about £1bn per year from the tax break and that would increase cumulatively each year so £1bn year 1, £2 bn year two etc.  Can't help thinking the money would have been better spent on a bung for them to build a UK giga factory.

1961Nick

michaels said:

I did some calcs that Telsa/their customers shared in some way might be benefiting by about £1bn per year from the tax break and that would increase cumulatively each year so £1bn year 1, £2 bn year two etc.  Can't help thinking the money would have been better spent on a bung for them to build a UK giga factory.

We might get one when Tesla get round to making the Model 2 or whatever it'll be called. They'd want a lot of domestic sales & the UK wouldn't disappoint if it was priced below £25K.