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Fuel Cost Savings
Electricity is significantly cheaper than diesel per mile driven. At off peak rates of 8 to 12p per kWh, an electric van costs around 3 to 5p per kilometre. The same journey in a diesel van costs 12 to 20p per kilometre.
For a fleet running 10,000 miles per vehicle per year, the fuel savings alone add up to thousands per vehicle annually. Smart charging during off peak hours reduces costs further. Overnight depot charging at cheaper rates delivers the lowest possible running costs.
Maintenance Cost Savings
Electric vehicles eliminate oil changes, exhaust repairs and many of the wear items that drive diesel maintenance bills. A diesel fleet vehicle typically costs £2,000 to £4,000 per year in maintenance. Electric vehicles reduce that by 30 to 40%.
Regenerative braking extends brake pad life significantly. Fewer moving parts means fewer breakdowns. Fleet downtime drops and workshop bills shrink.
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Tax and Financial Advantages
The Benefit in Kind tax rate for battery electric company cars is 4% for 2026/27, rising one point a year to 5% in 2027/28. That still compares to up to 37% for diesel vehicles. A basic rate driver with a £40,000 EV pays roughly £320 per year in BIK tax. The same value diesel could cost over £4,000.
Businesses also benefit from 100% first year capital allowances on new electric vehicles and chargepoint equipment. EVs now pay standard road tax since April 2025, £10 in year one for new registrations then the standard rate, so the road tax gap has narrowed, but the fuel and maintenance gaps have not. For fleets operating in London, electric vehicles avoid the £12.50 per day ULEZ charge that applies to older diesel vehicles.
