Benefit in Kind (BiK) & EV’s – The European League Table

25 Apr Benefit in Kind (BiK) & EV’s – The European League Table

Goldman Sachs latest research expects electric vehicles (EV’s) to be half of global vehicle sales by 2035. They believe there will be no let-up in the EV industry’s expansion, fuelled by tightening environmental rules and the increasing sophistication of electrification technologies.

Although troubled by some concerning headwinds – the rising cost of electricity and battery components, inadequate charging infrastructures, a slowing demand from private consumers – GS expect technology innovation to supersede these forces in coming years.

In the march toward zero greenhouse gas emissions, transport stands alone as the one sector moving in the wrong direction, and worryingly it is the largest source of emissions (26%), with passenger cars contributing 44% of the sector.

So, there is considerable pressure on stakeholders to reduce the environmental impact of passenger cars, and company cars have a major role to play in the adoption of zero emission transport solutions.

As companies continue to adopt EV’s and integrate them into their fleet mix, one of the main influencers in driver take-up is the tax benefit they can enjoy.

We can talk about this with confidence as we have seen it have a major impact on EV driver take-up in one of our UK clients. This particular client wanted to introduce a pilot programme that would formulate a blueprint for a future Global fleet strategy that will only offer BEV cars across the majority of their global markets.

The pilot scheme, initially designed to provide insight into the operation of a busy sales force using battery electric vehicles, became such a resounding success that 40% of the UK fleet is now fully electric, with about 80% due to be electrified within the next 12 months.

The appeal of the scheme was such that a mass influx of employees who had previously opted out of the company car scheme, opted back in, enticed by the particularly favourable BiK rates for BEV’s in the UK.

Although this quite clearly demonstrates the influence personal taxation rates can have on BEV take-up, the challenge for fleet owners, however, is that taxation incentives are not uniformly applied across Europe. And we can see that there is indeed a broad correlation between taxation incentives and BEV uptake, as evidenced by the relative positioning of countries in the ebook The State of Vehicle Electrification – those countries with a higher tax burden rate less well in our readiness table.

To understand the tax burden for company car drivers and the benefit, or cost, of choosing a BEV, we have looked at the benefit-in-kind (BiK) tax burden for 22 countries across Europe. Calculating the BiK rate for a typical €40k, 130 g CO2/km internal combustion engine (ICE) vehicle against a €40k zero emission battery electric vehicle.

The ebook is an excellent resource to help fleet stakeholders understand the personal taxation landscape of Europe, important when anticipating the likely appeal of integrating BEV’s into your fleet profile.

Access the ebook, and other fleet and EV resources, here, and start planning your journey toward electrification.