Company car drivers migrating to electric vehicles could see their total cost of ownership bill cut by 95%, while large fleets could also benefit from major savings too.

The Deloitte data says drivers can cut their TCO bill by 95% by switching to EVs, helped in no small part by the incoming 0% BiK rate on zero-emission vehicles

Showing the significant tax incentive of the incoming 0% company car tax rate on zero-emission vehicles – down from 16% currently – the new analysis by Deloitte sets out that a higher-rate 40% taxpayer receiving a diesel hatchback company car with a list price of £30,000 can currently expect to pay just over £18,000 in tax and fuel costs over a 48-month period. By comparison, for an equivalent electric vehicle, the total cost of ownership reduces to £916; a saving of 95%.

The research also suggests major savings for large fleets from such a switch, giving an example of how moving a 900-strong diesel or petrol fleet to electric could create savings in excess of £1.9m annually.

Michael Woodward, UK automotive lead at Deloitte, commented: “For those thinking about making the switch, the tax changes for company cars from 6 April 2020 are certainly a strong incentive.”

However, he added that with a surge in demand likely, the question remains whether both manufacturers and businesses are ready.

“Over the next three years, car manufacturers will need to review the scale of their production to accommodate growth and assess supply levels into the UK. Fleet sales will drive the majority of demand and manufacturers will be keen to prevent missing out on sales due to lack of supply.

“For many businesses, there are operational, employee and environmental benefits in transitioning to EVs. However, the suitability of electric must make sense before making the switch. For some, EVs will already be a viable option given their fleet journey patterns, and next steps may simply be building a robust policy and plan to support wider EV adoption. For others, long-distance travel demands or knowing how and where to charge EVs will need more consideration. Businesses upgrading from diesel or petrol fleets may also require investment for on-site charge points.”