Octopus Electric Vehicles was already a new branch for the company, which has built its business and reputation on the supply of green energy. Its new leasing service, called ‘Electric Dreams’, is designed to expand the ability of businesses to offer EVs leased through salary sacrifice – an increasingly popular option for company car ownership.
Most of us are familiar with the cycle-to-work scheme where it’s possible to buy a nice bike, tax-free, through salary sacrifice. This is what Electric Dreams is capitalising on, and when combined with Benefit in Kind rates absolutely scraping the floor for the foreseeable future, it’s a way of getting more people into EVs in a very affordable way.
For this tax year (2021-22) the BiK rate on an EV is just one per cent, and it will only go up to two per cent for the following three years. This means that once you take this and the pre-tax nature of salary sacrifice, the average saving over a three-year leasing deal is £14,445, which is a lot.
According to Fiona Howarth, CEO of Octopus Electric Vehicles, there is a pent-up demand for schemes like Electric Dreams: “Businesses and employees across the UK are searching for ways to do their bit for the environment. We have seen a seven-fold jump in salary sacrifice enquiries in the last year. If businesses in the UK introduce a scheme like this, they have the power to significantly reduce transport emissions across the UK by 2030.”
Octopus has structured the scheme so that it is simple to set up, with cars, charge points and energy tariffs handled by its experts thereby supporting businesses throughout the entire process. Something that is particularly important is the availability of Electric Dreams to smaller employers. Given that across the UK most people are employed by SMEs, it has been a huge area that has been under-served by EV-focussed company car schemes.
Complete food company, Huel, is one of the first companies to trial the scheme. James McMaster of the firm said: “We’re not the sort of company that would go with a traditional car scheme. Being able to offer something that promotes cleaner transport has been a real benefit to helping our team live our mission of a more sustainable world – they are amazed at what a brilliant deal this is.”
Octopus was one of the first energy companies in the UK to offer private leasing so it stands to reason that it would expand into providing for businesses, too. EDF is another energy supplier that offers a full end-to-end personal and business leasing service, through which it’s possible to get a car, charger and energy tariff from one place.
In the past, leasing a car from an energy company would have seemed like a mad idea, but with EVs new ownership models are being embraced and fundamentally, leasing through an energy firm makes sense. Whilst both Octopus and EDF are early to the party, we think that this is the start of a more widespread trend.