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594 – SMEs reject the electric business car

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15 June 2011

I KNOW I’ve written about this before, but electric cars just aren’t suitable for small businesses and SME firms at the moment.

Yes, idealogically, they are sound – who wouldn’t want to have zero tailpipe emissions? But there are still too many operational question marks, let alone acquisition costs, to be overcome before they become a viable option for any small business.

Except, perhaps, for a few entrepreneurial types who might see the marketing benefit of a branded electric smart car, I grant you.

Perhaps I should put forward a case for electric cars (or EVs as they are referred to) first. Take the Nissan Leaf, which will be built here in the UK (although not yet). It qualifies for 0% benefit in kind company car tax at present.

It also qualifies for 100% first year capital allowances. So the Nissan Leaf, like any other electric car, is highly tax efficient at the moment.

And, according to Nissan, it costs around £2 for an overnight charge which will take you 110 miles. Which sounds very good value in the light of current fuel costs. But…

…And you could hear this but coming some miles off…

…But the sheer unknowns of its operation, how many miles you can travel before it runs out of charge, and the cost all gang up to make it a limited – make that severely limited – choice for small businesses. As the recent survey by MIB Data Solutions discovered: SMEs quite rightly know about EVs, but didn’t see any point in running them as company cars in the near future – see our news story SMEs reject idea of running electric vehicles as business cars.

Here’s a good reason why: Concept Vehicle Leasing has the new Nissan Leaf electric car on for a contract hire lease rental of £399.99 a month on a three year/30,000 mile contract hire lease. For exactly the same monthly outlay and time/mileage period you can have the new Audi A6 2.0 TDI SE, which has a range of 823 miles on a tank.

(You might also want to check out our reader offer from Audi Fleet, which has the same car for £399 a month.)

Frankly, I’d know where my money would go.

Electric cars will play a part in the future of business mobility, of that I am sure. They are also a great driving experience. I’ve recently driven the smart fortwo coupe EV – and it was terrific fun (see blog 582 – Test driving an electric smart car).

When I attended the recent BMW Conference (blog 592 – BMW Corporate event at the MINI Oxford plant), one of the presentations was by Dr Julian Weber, BMW’s e-mobility manager on the MINI electric field trial in the UK.

There were two points that I thought were interesting: many of the participants didn’t want to hand the car back because they had enjoyed the experience so much – several offered to buy the car, although that wasn’t permissible.

The second, that participants chosen for the field trial had to have a garage so the car could be recharged. Looking at a map of London, I could only see one that lived inside the greater London area. In other words, the practicality of recharging was rightly seen as an issue.

I spoke to Julian about this afterwards. We had a lively discussion – whether an electric car was suitable for cities at all if you need a garage to charge the thing up – but I leave you with one interesting point Dr Weber made to me which might give you a clue as to when electric cars become a more practical business proposition.

“I think that fuel stations would be perfect for a fast charging station that would take, say, 10 minutes to recharge the battery. I really think that would be more practical than trying to find a charging point.”

I hope Mr Weber has made his views known to London’s mayor, Boris Johnson, who is committed to the installation of 1300 electric charging points by 2013.

Although seeing as the Mayor has scaled back his intention to provide over 25,000 points, perhaps Mr Weber has made his views known after all.

Editor’s Blog on electric car survey among SME car fleets

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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