Buying An EV As A Business Vehicle
The vaunted company car – or just a car for getting around. Saving on overheads is a must for business, no matter what you do or how you do it. Is buying an electric vehicle (EV) one of those ways to save? Though EVs (as of 2024) have a higher sticker price than their internal combustion engine (ICE) counterparts, there are many advantages to going green than ever before – and that’s saving your cash and capital for something else. Here’s a guide to buying an EV as your next business vehicle and a business case to pitch to the higher ups.
Types of EVs
First off, let’s get a handle on the types of EVs that one can buy. The broad categories are battery electric vehicles (BEVs) that run on electricity alone. The next category is a hybrid (HEV) which uses a small petrol motor to top up a battery and runs on both. A plug-in hybrid (PHEV) uses the same technology except it can be charged by an external power source. Hydrogen fuel cell (HFC) vehicles also exist but are not mainstream as of yet.
Tax incentives galore
As of 2024, BEVs and PHEVs are considered zero-emission vehicles by the government. This means they are exempt from Fringe Benefits Tax, if you provide a company car to an employee for private use. It is subject to conditions, such as having paid Luxury Car Tax and if the car is “held and used” on or after 1 July 2022. There are many more caveats and rules (of course!) which you can read at the ATO website here.
Green loans and subsidies
One of the tips for finding a new car that’s an EV is applying for a green loan. Zero or low emissions cars may be eligible for green car loans. These loans may offer lower or discounted interest rates compared to buying an ICE vehicle, a waiver on certain fees and charges, or a mixture of both. Some states and territories around the country may also offer incentives such as reduced registration costs, stamp duty discounts, cashback schemes, and more. Check your state’s revenue office to see what you’re eligible for.
Cheaper to run and maintain
Whether you choose to go full electric or hybrid, EVs are cheaper to run and maintain than ICE vehicles. BEVs use fewer moving parts and require less maintenance, up to 70% cheaper in most use cases. As for regular use, assuming you are using your own power source, driving an EV can save between $1,320 and $3,070 every year on average compared with ICE vehicles – and the savings climb even higher if you use solar power to “fuel” your EV. Hybrid cars will still take petrol to run, but far less than any given ICE vehicle.
By running the numbers, buying an EV may incur a larger upfront cost compared to a petrol or diesel car, but could end up being cheaper to run by comparison – as well as save you on tax. Remember to talk to your accountant or financial controller before deciding.
