Can I lease an electric van?

Electric van leasing: Is it possible? Is it realistic?

Firstly, thank you to our business leasing customer from Maidstone in Kent for sending photos of their new electric van which will be used by their joinery and construction business! Much of the work we do here at e-car lease is, by the very nature of our name, car-related. The considered growth of electric car procurement has come about for a number of practical and financial reasons - they drive better than combustion engines, they offer a better company car tax position for business and salary sacrifice customers, the Government has supported them with grants and the manufacturers have invested considerable sums of money into making these options functional and more affordable.

Add to that the effect of COVID: effectively the reduced commuting and car travelling has meant many customers are covering less than 10,000 on small stop/start journeys. This is where electric cars really shine, as they are the perfect solution for a personal or business customer covering low mileages. The lower costs on servicing/maintenance and significantly lower “fuel” costs just help hammer the argument home that the move towards electric cars is now a foregone and practical conclusion to the UK’s automotive demographic.

But what about electric vans? It may surprise some customers to discover that electric commercial vehicles have been freely available for many years and the e-car lease/e-van lease, team have been supplying electrified vans for many years. In some ways the existence of electric vans has flown under the radar for most SME’s in the UK and diesel is really the foremost choice for many drivers. Add to this the fact that company van taxation is very different, and you have very little incentive to move into an electric option. In some cases, you will have seen PR-type approaches from many big companies who want to appear “eco” and “green”. Some would often sit parked up and would not be used save for some media obligation.

Of course, this painted a fairly bleak future for the plug-in van. Looking into vans, these have often been considered a cost-effective and essential tool to businesses. For limited companies, the contact hire route allows 100% of the rental to be offset against tax and, providing you are VAT registered, 100% of the VAT. For a company van driver, a taxable benefit of circa £3500 applies - if you are a 20% tax payer this means £700 per year and £1400 if you are a 40% tax payer. What has perhaps thrown a counter to lease a new van post-April 2021, is the new “super-deduction” - see Government guidance. From 1 April 2021, the super deduction allows qualifying plan/machinery investments to offer 130% first-year relief.

Vans will be classed as a qualifying asset and so, for many businesses, will represent a great option from a taxation perspective. This may turn customers away from leasing and into purchasing for the short to medium term. For electric vans, the shift will involve some considerable cultural changes. The prospect of an “electric van” is somewhat unknown to many couriers and tradespeople. Some of this is down to a lack of advertising by manufacturers and the public sector but most of it is due to the focus on cars, as these represent a far more popular and easy win. The common issues with electric vans are:  

• They are expensive. Some of the new options are a considerable investment to many businesses. You will have seen prices in the range of £40,000-£70,000 for some of the medium to big vans. The corresponding monthly rentals are north of £600 plus Vat per month. For a smaller business this is unaffordable;

• Range is insufficient. Unlike cars, the range available with many vans falls well below the 300 mile mark. Because of the nature of a van i.e. it is carrying more weight and is less aerodynamic, the range available is somewhat less than a passenger alternative. Some of the commercial options will need charging every 70-100 miles, which for some drivers will mean an everyday obligation. For those drivers who have limited EV experience, this might be considered an onerous experience; and

• Lack of options. Again, the van-world sits behind cars and there is not quite the choice available for customers to consider.

The good news is that there is now more focus on commercial vehicles and the various stakeholders are working more closely to provide more finished and practical results to businesses in the UK. With lower running servicing and fuel costs plus the same fun in driving an EV, there are some great reasons to choose an EV. What might start to “swing the balance” will be the congestion and clean air zones being introduced to towns and cities across the UK (not just London!). If combustion engine commercials are charged daily for entering these zones, the costs will soon add up and the price disparity between a diesel and electric will achieve more equilibrium. But does the Government support electric vans? Yes. As you will see below, plugin grants are still available from the Government: Small vans These vehicles are less than 2,500 kilograms (kg) gross vehicle weight, have CO2 emissions of less than 50g/km and can travel at least 96km (60 miles) without any emissions at all:

• Maxus eDeliver 3 (short wheel base variants)
• Nissan e-NV200
• Renault Kangoo ZE
• Renault Zoe Van

The grant will pay for 35% of the purchase price for small vans, up to a maximum of £3,000.

Large vans

These vehicles are between 2,500kg and 3,500kg gross vehicle weight, have CO2 emissions of less than 50g/km and can travel at least 96km (60 miles) without any emissions at all:

• BD Auto eTraffic
• BD Auto eDucato (3.5 tonnes)
• Citroen e-Dispatch
• LEVC VN5
• MAN eTGE
• Maxus eDeliver 3
• Maxus eDeliver 9
• Mercedes-Benz eVito
• Mercedes eSprinter
• Peugeot e-Expert
• Renault Master ZE
• Renault Trucks Master ZE
• Vauxhall Vivaro-e
• Volkswagen ABT e-Transporter
• LDV EV80

The grant will pay for 35% of the purchase price for these vehicles, up to a maximum of £6,000.

Volkswagen ABT eTRANSPORTER LWB 83kW 37.3kWh Van Auto

In terms of the electric van shown here, the Volkswagen ABT eTRANSPORTER LWB 83kW 37.3kWh Van Auto (Pure Electric Vehicle), this is based on the following configuration:

• Pure grey Solid Paint
• Double grid woven fabric - Titanium/Palladium black
• 16" steel wheel

As standard the vehicle includes a 56mph speed limiter, armrest for driver, 4-way manually adjustable driver’s seat, power adjustable and heated door mirrors, central locking system, rear parking sensor. Heat insulated windows, post-collision braking system, start/stop system, Bluetooth, cross wind assist, front assist with emergency braking, DAB radio, halogen headlights, air conditioning, leather-trimmed multifunction steering wheel. LED interior lightings, heated driver and passenger seats, 16” steel wheels and an immobiliser. In terms of additional options, consider adding the front sensors, second battery and the anti-theft alarm system. 

On the technical side, company can drivers can note the £41,365.00 list price and CO2 of 0g/km. The 37kWh lithium battery offers a WLTP range of 82 miles, 110ps and 0-62 times of 17 seconds. The payload is just over 1000kg. In terms of charging, a 7kW home charging unit should take around 5-6 hours to fully charge the vehicle and a rapid 50kW DC charge point should achieve 10-80% in around 40 minutes.