Electric & Hybrid Vehicle Leasing?

GKL Leasing provides key information for current and prospective electric or plug-in-hybrid vehicle drivers and owners. This article is a Summary of some of the key points such drivers and owners may need to consider. by Mark Biggs

Current Volumes

Before getting into some of the detail we thought it would be worth recapping on the size of the UK market. Electric and hybrid cars are slowly gaining in popularity but still command a small share of overall car registrations:

	Q1 2019	Q1 2018	Change %	Full Year 2018	Full Year 2017	Change %
Battery electric	5,982	3,894	+53.6%	15,474	13,597	+13.8%
Plug-in-hybrids	8,582	10,267	-16.4%	44,437	35,585	+24.9%
Hybrids	26,258	21,444	+22.4%	81,323	67,676	+20.2%
Total electric and alternative fuels	40,822	35,605	+14.7%	141,234	116,858	+20.9%
Petrol	468,415	442,237	+5.9%	1,475,712	1,357,782	+8.9%
Diesel	191,784	240,646	-20.3%	750,165	1,065,942	-29.6%
Total registrations	701,021	718,488	-2.4%	2,367,111	2,540,582	-6.8%

Electric and AFV share	5.8%	5.0%		6.0%	4.6%

Source: SMMT (insignificant differences in total registrations due to small revisions in electric and AFV volumes)

As can be seen there has been a steady rise in market share of electric and hybrid vehicles but the overall market share is still only around 6%.

Pro’s and Con’s

There are many well-known benefits of running electric or hybrid cars:

Significantly lower environmental impact
Lower running costs
Lower taxation

However, there are disadvantages too:

Higher acquisition costs
Generally still fairly short ranges
Immature second-hand car market resulting in less certainty of resale values, although this risk can be avoided by entering into contract hire arrangements, such as those offered by GKL Leasing

We illustrate some of these in the following table, using data from Nissan UK’s website. This is for illustrative purposes only and before deciding on the appropriate vehicle for you or your company you should make your own calculations and forecasts and discuss your specific requirements with GKL Leasing or other provider.

The most popular selling pure electric car is the Nissan Leaf, with around 19,000 registrations in 2018. So how does this car stack up against the current competition

Vehicle	Nissan Leaf 5dr N-Connecta 40KW	Toyota Corolla 1.8 Hybrid 122 Design CVT 5dr	Ford Focus 1.0 125 ST Line Nav Ecoboost 5dr
Seats	5	5	5
Top Speed	90	111	124
Acceleration 0-62	7.9	10.9	10
Transmission	1 speed auto	CVT Auto	6 speed manual
Fuel Consuption at worst WLTP		55.3 mpg	44.1 mpg
Range	up to 168 miles
CO2	0	86	107
Full Maintenance Business Contract hire Rental inc road fund licence*	£375.70	£266.89	£262.72
Monthly Estimated Cost of Energy/Fuel based on 10000 miles per year	£28.00	£83.15	£104.26
P11D Value	£32,740.00	£26,220.00	£22,050.00
Company Car BIK 2019/2020 20%/40%	£1048/£2095	£1130/£2259	1085.04/2169.96
*All figures based on 3 payments followed by 35 over 3 years including full maintenance and tyres on 10000 miles per year.
The above rentals are plus VAT @ the current rate.


Fuel monthly cost calculation 10000/MPG x 4.56 x £1.21p /12
Electricty Cost 10000/range x battery capacity x 0.14p /12

This table is for indicative purposes only. Individual readers should consult their tax advisors on the appropriate tax treatment for their fleet.

This table indicates that the overall cost of an electric car as pricing stands today is likely to be more than a broadly equivalent petrol car. This is due to the fact that the higher acquisition cost of the electric car. However, a number of companies and individuals are still choosing the electric or hybrid option because the financial details are not the principal factor in their decision making.

Vehicle Choices

If you are interested in looking at all-electric or hybrid options GKL Leasing will be pleased to discuss these with you. A number of manufacturers now offer such vehicles with a wide range of sizes, specifications and prices available. Here are some of the more popular models:

Mitsubishi Outlander

Nissan Leaf

Hyundai Ioniq BEV and PHEV

BMW i3

Mercedes E300D E

Tesla Model S

Renault Zoe

VW Golf GTE and E Golf

Kia Niro BEV and PHEV

Charging- Infrastructure and Connectors

A principal concern of would-be electric car users is the charging infrastructure. So what are your options?

There are three options available to charge electric cars. These are: home charging, work place charging (not available to all electric car drivers) and public charging.

Home Charging

A standard three-pin domestic plug socket can be used to charge the majority of electric cars and new electric cars will come with a standard Electric Vehicle Supply Equipment (EVSE) charging cable. It is usually recommended to install an EV charging wallbox and this should be fitted by someone appropriately trained. Grants are available to fund up to 75% of the cost of a charging wallbox and its installation up to a maximum of £500. Grants will usually reduce the cost of installing a home charging point to around £300 to £400, depending on whether a 3kW (slower charging) or 7kW (faster charging) unit is selected.

Workplace Charging

A number of employers provide charge points at work. This can be an essential facility for employers running electric or plug-in hybrid vehicles in their fleets. Government grants are available to have charge points installed under the Workplace Charging Scheme. Such grants provide 75% of the total cost of installation up to a maximum of £500 per socket, and for a maximum of 20 sockets.

Public Charging

There are a number of public charging point networks. Zap-map lists these at

https://www.zap-map.com/charge-points/public-charging-point-networks/

These charging networks facilitate journeys that are longer than the typical ranges of any electric car and can be used to plan longer routes. A number of electric cars also have sat navs that identify public charging points and can direct drivers to charging points within their range. Users will need to check the financial charging structures of networks they plan to use. Some are free.

Zap-map regularly gives updates on the total number of charge points available in the UK at

https://www.zap-map.com/statistics/#region

As at 13 April 2019 this showed 21,597 connectors at 7,824 locations. Of these 4,826 were rapid with the majority of the rest being fast.

The charge point infrastructure is being continually expanded. For example, the UK’s largest Rapid charging hub has recently been opened at the Milton Keynes Coachway, just off the M1. This is operated by BP Chargemaster and is available through the Polar Network. BP Chargemaster will also begin installing ultra-rapid 150kW electric vehicle (EV) charge points in the UK. These charge points are expected to provide up to 100 miles of driving range from a ten minute charge, much faster than the current standard 50kW charge points. This will start with a trial site in July, and a network is expected to be established by the end of 2019.

Details of grants available to support the rollout of EV infrastructure can be found at: https://www.gov.uk/government/collections/government-grants-for-low-emission-vehicles

In addition to the charge point options, EV drivers also need to be aware of the different charging types. There are three main charging types: rapid, fast, and slow. These represent the power outputs, measured in kilowatts (kW), and therefore the charging speeds available to charge an EV.

Rapid chargers are one of two types – AC or DC (Alternating or Direct Current). Current Rapid AC chargers are rated at 43kW, while most Rapid DC units are at least 50kW. Both will charge the majority of EVs to 80% in around 30-60 minutes, depending on battery capacity. Tesla Superchargers are also Rapid DC and charge at around 120 kW. Rapid AC devices use a tethered Type 2 connector, and Rapid DC chargers are fitted with a CCS, CHAdeMO or Tesla Type 2.

Fast chargers include those which provide power from 7kW to 22kW, which typically fully charge an EV in 3-4 hours. Common fast connectors are a tethered Type 1 or a Type 2 socket (via a connector cable supplied with the vehicle).

Slow units (up to 3kW) are best used for overnight charging and usually take between 6 and 12 hours for a pure electric vehicle, or 2-4 hours for a plug-in hybrid. EVs charge on slow devices using a cable which connects the vehicle to a 3-pin or Type 2 socket. Although as range increases in the vehicles so do the potential charge times. This is an important consideration when futureproofing your charging investment.

More information on the different connector types and speeds can be found at

https://www.zap-map.com/charge-points/connectors-speeds/

Conclusion

In summary, electric and hybrid cars are becoming more popular but are still a small part of the overall UK car market. Although it is still the fastest growing. With new product this year from most manufacturers and 200 mile plus ranges this will only accelerate thing further.

Currently from a purely financial perspective the initial costs of acquiring and operating electric cars are likely to be higher than petrol or diesel cars that are broadly equivalent, but many users are still choosing them for their favorable environmental performance, specific travel requirements and long term low running costs. The infrastructure in support of electric cars is improving all the time, as are the ranges of electric cars, and websites such as Zap-Map contain lots of helpful information to assist electric car drivers make choices and plan their routes.