EGEB: UK EV leasing grows by 91% due to new tax incentive

• Since the British government introduced an EV tax incentive in April, company car leases are booming.
• European Parliament votes in favor of the EU to cut emissions by 60% by 2030 against 1990 levels.
• Redaptive, which makes commercial and industrial buildings more energy-efficient, gets a cash injection.
• Arcadia Power is committed to making clean energy work for the planet and your bank account — all without changing your utility company. Sign up to receive your $20 Amazon Gift Card.

UK EV lease boom

The number of UK drivers opting to lease an electric vehicle has almost doubled in the first six months of 2020 since a new tax incentive was introduced, according to EV specialists Octopus Electric Vehicles. The growth in EV leasing has contributed to an increase in total EV registrations of 157% so far this year, as ICE car sales slump by an average of 52%.

On April 6, 2020, the UK government eliminated Benefit in Kind (BIK) tax for drivers using an EV, instantly making leasing an EV through workplace salary sacrifice schemes — that is, company cars and related benefits — incredibly attractive. Previously, 16% BIK tax was applied to the vehicle, but now those who lease an EV via salary sacrifice pay for it completely tax-free. In contrast, ICE vehicles are still subject to an average of 27% BIK tax when using salary sacrifice.

Workplace salary sacrifice schemes enable employees to pay for vehicles from their gross salary, saving on both national insurance and income tax.

For example, a higher-rate taxpayer can currently lease a Tesla Model 3 Standard Range Plus for 48 months for an average of £342 a month with zero upfront cost, including insurance, servicing and maintenance, and tire replacement. A similar ICE car, such as an Audi A4 TFSI, would cost around £395 per month on a personal lease for the car only.

Fiona Howarth, CEO of Octopus Electric Vehicles, which runs the Go Green Car Scheme for participating companies, told Electrek:

EVs already make environmental and financial sense, and the many benefits of driving electric speak for themselves. They are fantastic to drive, are good for the planet, and have far cheaper running costs than petrol and diesel equivalents. Leasing an EV through our salary sacrifice scheme maximizes savings for drivers. With no upfront costs, generous tax benefits and an ever-expanding range of EVs on offer, it’s no surprise we have seen such strong uptake.

EU: 60% cut by 2030?

The European Parliament has today voted in favor of a legally binding target for the European Union to cut emissions by 60% by 2030 against 1990 levels. The EU’s current 2030 goal is a 40% emissions cut.

Parliament will need to agree to the target with EU member countries, and they are currently split over how ambitious it should be.

Experts say a 55% cut by 2030 is the minimum needed to meet the Paris Agreement by 2050. Reuters explains:

A 60% target is unlikely to secure support from EU countries. But Parliament backing a more ambitious aim could make it harder for countries to water down the target in the ensuing negotiations.

Roughly half of the EU’s 27 member countries have said they support an emissions cut of ‘at least 55%’ by 2030.

Heads of government are expected to decide the member states’ negotiating position at a summit in either October or December, in a process which requires unanimous support from the 27 countries.

Energy-efficient buildings

Making buildings more energy efficient makes good financial sense — just follow the money for proof. San Francisco-based Redaptive, which provides energy-efficiency retrofit programs without upfront capital and uses directly measured building data for commercial and industrial customers, has closed $156.5 million in funding led by global fund manager CarVal Investors.

Redaptive will use the funding to expand its energy-efficiency offerings in order to meet growing demand from existing and new customers.

To date, Redaptive has enabled more than $380 million in sustainability projects and a total energy reduction of 1.1 billion kilowatt-hours, which is equivalent to approximately 778,000 metric tons of CO2 or 1.8 million barrels of oil consumed.

Arvin Vohra, CEO of Redaptive, told Electrek:

As many states and major companies turn their focus to ambitious climate action goals, corporate demand is rising for energy-efficiency services including the replacement of lighting, air conditioning, and other energy-intensive systems to reduce energy use and related emissions.

With this funding round, we plan to expand our offerings so we can help more companies reduce energy use and carbon emissions at their commercial and industrial buildings while also saving money on their utility bills. It’s a win-win for our customers and the environment.

US Vice President Joe Biden’s green plan includes an upgrade of 4 million buildings over four years to meet the highest energy efficiency standards. If he wins the 2020 presidential election and that’s implemented, the services of Redaptive and companies like it will be in very high demand.