Financial Changes in the Automotive Industry in an All-Electric Future

There is currently an enormous shift happening in the automotive industry with the electric car revolution accelerating following the announcement of a proposed 2040 ban on petrol and diesel vehicles. Whilst this is fantastic news and there are many great incentives to making the switch (including no road tax, lower running costs and Government grants), there is still a great deal of uncertainty about what the landscape will look like in the future.

The market for company cars will change greatly in the run-up to the 2040 ban. Inevitably, there will be financial changes to the UK automotive market that both businesses and individuals will need to consider when purchasing an electric car. This is because electric vehicles are vastly different to their petrol and diesel counterparts, so certain aspects of motoring will change. These are a few of the key aspects to consider:

New electric automobiles will come with a manufacturer warranty as normal, but there will also be a separate warranty for the battery. Once the car warranty expires, it is vital that businesses and individuals take out an extended car warranty (there are specialist providers for electric vehicles). This is because electric vehicles are much more complex and can cost a significant amount more to repair than a petrol or diesel car. Due to the battery warranty being separate, this should help to keep costs down (but you will always want the battery to be covered).

Insurance Premiums
In terms of insurance premiums for electric vehicles, this is still being worked out as the electric car revolution is in its infancy. To obtain cover, it is likely that you will have to use a specialist provider, but this should change in the coming years. Generally, these automobiles are less powerful than fuel-powered cars and, therefore, should be cheaper to insure. Additionally, many specialist insurers offer discounts on electric car insurance to boost their image in a time where huge numbers of motorists are making the switch.

A drop in leasing costs along with zero road tax and lower running costs, mean that making the switch now can be a smart move for any business looking for new company cars. There are still areas that are being ironed out, but the future certainly looks bright for green driving and businesses can benefit greatly from making the switch sooner rather than later. This is particularly true when you look at the excellent models currently available, the large ranges now available and the increasing number of charging points.

Join the discussion