Average mileage of 8.4 miles makes EVs and PHEVs suitable for business

Company Fleet 

The average trip undertaken by a car in 2019 was just 8.4 miles, according to the latest statistical data put together by the government in its National Travel Survey 2019 .

Average trip mileage has been declining since a peak in 2002, suggesting that electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) would be ideally suited for business use.

Focusing on business trips in the data, there were 28 business trips per person in 2019 covering 555 miles in total throughout the year. Of this mileage, 72% was in a car or van.

“While I accept that averages can conceal all sorts of differences, particularly dependent on the business sector, the direction of travel is clear,” says Gateway2Lease operations director, Rob Marshall, “and that is towards mileages reducing year on year, which will have been accelerated by the use of new technology during the COVID-19 lockdown. I think this presents a real opportunity for business and fleet operators to start considering a move towards an electrified vehicle choice for their next car.”

According to Marshall it's crucial not to look just at the monthly rental cost as this can have a deceptive effect on the whole life cost of the car (what you actually pay over the course of the lease in terms of fuel, maintenance, NIC, minus tax advantages).

“If we take the Citroen C5 Aircross PHEV in Flair trim and compare it with the RDE 2 compliant diesel version, the monthly gap in rentals is vast, the diesel being £170 a month cheaper. But the average monthly rental cost over the vehicle lease period is much closer - just £13 apart.”

Here is an illustration that we have put together based on the Citroen C5 SUV on a 3+33 profile at 10,000 miles a year, 50% of which are business miles:

CITROEN C5 AIRCROSS 1.6 Plug-in Hybrid Flair 5dr e-EAT8 Hatch 8sp	CITROEN C5 AIRCROSS 2.0 BlueHDi 225 180 Flair 5dr EAT8 Hatch 8sp
P11D value £35,325	P11D value £30,755
CO2 emissions 32 g/km	CO2 emissions 163 g/km
EV miles 31	EV miles n/a
Economy 166.2 mpg	Economy 47.3 mpg
Monthly rental £467	Monthly rental £297
True monthly rental cost £532	True monthly rental cost £519
Source: BCF Wessex / Gensen calculator

While the diesel still remains more competitive on total monthly rental costs - although the gap has narrowed considerably - we also need to consider the driver's position.

Here is an illustration based on the same cars in terms of benefit-in-kind taxation:

CITROEN C5 AIRCROSS 1.6 Plug-in Hybrid Flair 5dr e-EAT8 Hatch 8sp	CITROEN C5 AIRCROSS 2.0 BlueHDi 225 180 Flair 5dr EAT8 Hatch 8sp
Average monthly BIK @ 40% £130	Average monthly BIK @ 40% £369
Source: BCF Wessex / Gensen calculator

The difference in BIK is a significant feature, enough for the driver to sacrifice the difference in total rental (£13) and still be left better off by over £220 per month.

Marshall continues: “That's why it's important to look beyond the headline rates when it comes to evaluating business cars for your fleet, particularly now we have a taxation system that actively encourages drivers into fully electric or plug-in electric vehicles. I would suggest assessing each of your vehicles as they come up for replacement. And those directors outside the company car system should also consider actively opting back in for significant business and personal taxation savings.”

---

View our latest blog posts