The Government needs to make its signals clear on electric company cars in the Autumn Budget, according to FleetCheck.

FleetCheck has urged Labour not to announce rapid future increases in BiK taxation on company car EVs

The fleet software specialist said concerns were rising that fleet taxes and policies surrounding EVs could be ramped up after the Chancellor warned that next month’s Budget would involve “difficult decisions”.

Peter Golding, managing director at FleetCheck, said it would be premature for the Chancellor to assume that the fleet EV market was now mature and that more revenue could be “clawed back”.

He’s urged the Government not to use the Budget to announce rapid future increases in Benefit-in-Kind (BiK) taxation on electric company cars.

“We currently have BiK tables though to 2027/28 and it would be fair to describe the rises they detail as careful. Rates are clearly being kept low to encourage further electric car adoption over time.

“What we don’t want to see is a sudden jump in future BiK because that would affect company car choices being made today, given typical replacement cycles. This could especially discourage electric car adoption at a point in time when there is already an underlying trend developing towards plug-in hybrids among some drivers.”

Golding said that concerns had been heightened following the cut to the Advisory Electric Rate, used to reimburse company car EV drivers for business travel, from 1 September.

“The recent reduction in the Advisory Electric Rate (AER) was worrying, especially when the energy price cap is increasing.

“There’s always been a strong argument that AER rates are too low and reducing them further in this way sends out a potentially discouraging message to anyone thinking of choosing an electric company car. Our hope is that it is not a sign of things to come.”

FleetCheck stressed that while company car fleet electrification so far has progressed relatively rapidly, this was due to ‘low hanging fruit’ and the next phase could be more difficult.

“It would be a mistake to look at the progress made in fleet car electrification to date and assume that the trend will continue at the same rate. Drivers who haven’t chosen an electric car so far are those who, for example, have no drive on which to install a charger and therefore no easy access to low-cost charging.

“In order to bring those drivers on board, the Government needs to not just keep BiK low, but also ensure that AER rates match electricity prices effectively, and that the installation of on-street charging is properly funded.

“Everything needs to be aligned and the signals in favour of EV adoption need to be clear in order for the market to continue to respond positively. We very much hope to see this happen on 30 October.”

The Association of Fleet Professionals (AFP) has also urged the Government to maintain an incremental approach on BiK rates to support widespread fleet electrification.

Speaking following the arrival of the new government, the AFP said an announcement on extended company car Benefit-in-Kind (BiK) taxation tables should be “among the first fleet jobs” for Labour to give insight past the 2027/28 tax year.

But as with FleetCheck, it’s warned that large increases in BiK rates for EVs could prove counterproductive to adoption as fleets tackle more difficult applications for EV rollout.

Paul Hollick said: “We’re now working our way through these trickier applications, notably where drivers don’t have charging available at their home or nearby, something that won’t be resolved properly until on-street charging infrastructure becomes widespread across the country. For these employees, low Benefit-in-Kind taxation is an important incentive to offset inconvenience.”

The AFP also recently published its list of five ‘easy wins’ for Labour that would cost little or nothing, and provide a wide range of benefits for the fleet sector. Alongside a realistic target for the ICE ban, the industry body has called for action on areas including EV labelling and education, and a standardised battery state of health check.