Is an electric van worth it for a small business? An electric van is connected to a charging station.

Is an electric van worth it for a small business?

A white electric van is plugged into a charging point

The UK Government has ambitious plans to phase out the sale of all new petrol and diesel vans by 2035.

The good news is that we're now seeing increased investments in the development of commercial Electric Vehicles (EVs), and a comprehensive national charging infrastructure.

While the Government has announced an end to grants for electric cars, strong incentives remain in place for commercial electric vans. In fact, the money saved from subsidising electric cars is being used to extend the public EV charging infrastructure. This is welcome news for business owners thinking about switching to an electric work van.

So, what are the realities of owning an electric van for business? We'll take a look at the main concerns around ownership: affordability, running costs, range anxiety, and access to charging points.

Financial support to help you go electric

The focus on rolling out electric cars meant that there were significant price differences between electric cars and vans, which put many business owners off. However, this is now changing.

With more manufacturers producing commercial EVs, prices are beginning to fall. And the UK Government has subsidies to encourage business owners to go electric through the Plug-In Vehicle Grant. They vary depending on van size, and there are some limitations for larger trucks, but you could claim:

  • 35% of the cost (to a value of £2,500) of a small van (under 2,500kg)
  • 35% of the cost (to a value of £5,000) of a large van (between 2,500kg - 4,250kg)
  • 20% of the cost (to a value of £16,000) of a small truck (N2) (between 4,250kg - 12,000kg)
  • 20% of the cost (to a value of £25,000) of a large truck (N3) weighing over 12,000kg

    Figures correct as of June 2022.

How an electric van can take your business further

A close up of an electric van plugged into an on-street charging point.

Considering switching to an EV? There's good news if you're concerned about driving range.

As technology develops, electric van ranges are increasing, with some models reaching up to 200 miles on a single charge. And, as the government invests in expanding the public EV charging infrastructure, 'range anxiety' is becoming a thing of the past. You can see how many charge points are in your local area using this interactive Government map.

If you have a driveway, garage, or parking at your business, then you could look to install your own charge point. Grants are available if you want to do this. It's also worth exploring off-peak electricity tariffs, as many energy companies offer lower prices at night when demand on the grid is reduced. Another thing to consider is the number of off-peak hours available to charge your electric van.

Charging speed

One thing to look out for when considering an electric van is how quickly it can charge. If it's a low-capacity battery, you likely won't be able to use ultra-fast charging points, usually found at dealerships, motorway service stations, and supermarkets. The charging times of batteries can vary depending on the make and model, so it's important to find one that suits your needs as a business owner. You need to feel comfortable and in control when you're on the road.

Are electric vans worth it?

An electric vehicle drives through rolling hills in the countryside.

Electric van driving ranges are going up. And, even with energy price rises, electric vans can still be cheaper to 'fuel' compared to petrol or diesel vehicles, when charging at home - although it is probably worth looking at the different tariffs available.

Along with this, as more cities adopt Ultra Low Emission Zones (ULEZ), petrol and diesel drivers are having to pay to drive into city centres. With an electric van, this charge is waived. Road tax is currently free for those driving an electric vehicle, but the Government has announced that in 2025 electric vehicles will have to pay road tax.

These aren't the only savings you can make by switching to an electric van. Servicing can also be cheaper because electric vans don't have the same engine design. There are fewer moving parts, no manual clutch, gearbox, or transmission that can wear out, and no oil to change. Electric van motors recover energy when you let up the accelerator, resulting in longer-lasting brake pads and discs.

How much an electric van costs to buy will depend on numerous factors including, but not limited to, the make and model, whether it's new or second-hand, and the age or condition of the van.

A second-hand electric vehicle could be a viable option if your budget doesn't stretch as far. The good news is that, just like a brand-new model, used electric vehicles can be cheaper to run.

Electric vs diesel: which is better?

Diesel vans are less expensive to buy upfront. However, there can be an advantage to going electric: the running costs can be lower, which can make Electric Vans more affordable and cost-effective in the long run.

As mentioned previously, electric vans can be cheaper to 'fuel' than their diesel counterparts. The widespread availability of electricity, and the growing network of charging points across the UK, makes charging more accessible and easier to do.

Although cutting-edge technology and expensive batteries can drive EV prices up, the advantages of technical features could also outweigh the downside of the initial cost. For example, if you're driving across multiple locations for work as a busy tradesperson, with many EV models, you'll be able to locate your van if you can't remember where you've parked.

Another factor to consider is that all fully-electric vehicles are exempt from the London Congestion charge. Given that diesel vehicles won't be exempt, if you want to avoid the Congestion Charge, an electric van could be a smart choice.

Should you buy an electric van for your business?

Given the push towards Net Zero, and Government policy, it's not a matter of if, but when you'll need to consider an electric van. Especially as all petrol and diesel vans will cease production by 2035.

If you're starting out, or your business is just hitting its stride, then an EV van can offer you many advantages, whether new or second-hand.

Electricity can be ‘cheaper’ per mile compared to petrol or diesel, so although there’s the initial outlay to find when you’re buying an electric van, over time you could see lower running costs. Plus, fewer moving parts mean simpler servicing, and you can avoid charges like road tax and ULEZ costs.

Electric vans - the pros Electric vans - the cons
Can be cost-effective (electricity can be cheaper per mile compared to petrol or diesel) dependent on usage, environment, economic changes etc. Initial outlay
Purchase incentives such as the low-emission plug-in grant Uneven nationwide EV charging infrastructure
Continually improving range on van models Slow charging time for some vans
Improving public charging infrastructure Plan longer journeys around charge points
Currently exempt from road tax, fuel duty, vehicle excise duty Not as much choice right now - especially in the used van market
Standard car licence holders can drive electric vans weighing up to 4.25 tonnes. This is due to battery weight, and is known as the alternative fuel payload derogation. Reduced payloads. The weight of electric van batteries can be heavy, which can result in a reduced payload and range.

Check out our van insurance

Direct Line's comprehensive van insurance covers electric vans, including charging cables and home chargers, accidental damage, fire, and theft, plus cover for battery damage as a result of an insured incident. It also includes hotel expenses (up to £150 for the driver or £250 in total for everyone in the van) in the event your electric van can't be driven due to an accident or loss covered by your insurance arrangement.

Van Insurance

Updated: 03 May 2024