‘Flexing’ to electric vehicles via subscription could help introduce an element of control for fleets cost at an inflationary time while also helping slash rental costs for short-term staff, Mercia Fleet Management has said.

The study found 47% of companies plan to implement an EV sal-sac scheme in the first half of 2024 alone

The Autumn Budget is set to raise business costs in many areas, including the rise in employers’ National Insurance Contributions, the national minimum wage and national living wage from next April, plus the impact of rises in Vehicle Excise Duty (VED), including for electric vehicles.

One way of mitigating the effect of the increases and exerting greater control over costs could be to flexibly introduce EVs on subscription – especially for businesses with seasonal or contractual requirements – according to Mercia.

Research by the business, the fleet management division of EV salary sacrifice specialist Fleet Evolution, among clients in the professional services and construction sectors has found that company cars are often deployed for contracts of only three months to meet short-term or seasonal needs.

Andrew Leech, head of Mercia Fleet Management and founder of Fleet Evolution, said that for such fleets, EV subscriptions could prove far more cost effective.

“For clients with seasonal, short-term needs or new employees on probation, we have been able to reduce costs by up to 40% by putting in place three-month subscriptions for EVs.

“This has meant that the MG4, our most popular EV, can cost as little as £25 per day, while the Tesla Y on subscription could cost just £40 a day including insurance.”

Leech said that subscriptions could stop fleets with short-term staff from having to resort to expensive daily rental solutions, as he warned that a typical Tesla Model 3 from a conventional daily hire company can cost in the region of £2,000 per month.

And Leech said that subscriptions should be considered as an important part of a fleet strategy, especially to provide greater flexibility, at a time when the Budget has raised the cost thresholds for most businesses in the UK.

“The ability to ‘flex’ a fleet based on demand is vital in the current market for the very many businesses who face rising costs following the Budget. And these will become even more expensive due to initiatives such as the increases in VED on new product,” he said.

Mercia’s recently launched Subscribe Electric EV subscription service gives corporate customers a taste of going electric at affordable prices while meeting short-term business needs.

Subscribe Electric is available on most makes or models on the market. The comprehensive products includes servicing, breakdown, tyres and insurance costs; all that’s required is vehicle charging.

Andrew Leech added: “Short-term EVs can be highly attractive from a cost point of view at a time of rising costs for most businesses following the Budget. They can also play a role in helping businesses meet their corporate sustainability targets at the same time.

”We are increasingly talking to businesses that want to find ways of mitigating their costs, especially after what most believe was a bad Budget for business.”