Why choose an eco-van for your business?
Thinking of switching your van to electric? We've pulled together everything you need to know to help make your decision a little easier.
For van drivers and fleet owners, upgrading vehicles can be a big deal. It requires planning, research, and a large investment – which is why choosing the right model is essential. But how do you pick the right electric van or hybrid van for your business? Here's everything you need to help you make the right choice.
Electric vans use battery packs that can often be charged from a standard domestic plug socket or a dedicated vehicle terminal. A lot of electric vans are now capable of travelling nearly 200 miles on a single charge, which means they're better suited to local deliveries, unless overnight charging is available.
Hybrid vans are an alternative to electric vans, combining a petrol engine with an electric motor. So if you're wanting to travel longer distances at faster speeds, this could be a good option.
The UK Government is trying to make the decision a little easier as it accelerates efforts to lower the UK's carbon emissions and make our air cleaner. While that might mean your current van will soon start costing your business more, it also gives you an opportunity to cut costs and future-proof your fleet.
The 2030 petrol and diesel vehicle ban
At the end 2020, the Government announced that new petrol and diesel cars and vans would be banned from sale in the UK from 2030.
There's an exemption for new hybrid vehicles, which can be sold between 2030 and 2035, if they can drive a "significant distance" with zero emissions. In an update published in July 2021, the Government said the sale of used petrol and diesel cars and vans on the second-hand market will still be permitted, and vehicles already registered will continue to be driven.
London Congestion Charge for low emission vans
If you're driving a van in London, the Congestion Charge can seriously cost your business, especially if you have a fleet of drivers. In July 2021, the Government announced that London's 'temporary' £15 Congestion Charge, that was introduced during the coronavirus pandemic, would become permanent. But there are ways to avoid the charge – if you have a van with London Congestion Charge exemption.
If your van meets the Euro 6 emission standard – it emits no more than 75g/km of CO2 and can travel 20 miles without emitting carbon emissions, it qualifies for a cleaner vehicle discount and you'll only have to pay an annual £10 registration fee. If you drove in London every day in an older van, it would cost you almost £3,000 a year.
But from 25 October 2021, the cleaner vehicle discount will change so that only battery electric or hydrogen fuel cell vehicles are eligible. Then from December 2025, the discount will be discontinued and all vehicle owners will need to pay to enter the Congestion Charge zone during charging hours. You can check the CO2 emissions of your van on your V5C document. You can keep up to date on the latest discounts and exemptions on Transport for London's website.
Low Emission Zones (LEZ)
Another thing to think about when traveling in London is the Low Emission Zone or LEZ, which operates to encourage drivers with heavy diesel vehicles driving in the Capital to use cleaner vehicles. The LEZ covers most of Greater London and applies 24 hours a day, every day of the year. The charge applies to vans that don't meet the Euro 3 diesel standard – you can check whether this applies to you on Transport for London's website.
Clean Air Zones (CAZ)
To improve air quality some cities are introducing Clean Air Zones. If you're a van driver, traveling in these areas may incur a charge unless you meet the minimum emission standards.
Ultra Low Emission Zone (ULEZ)
The Ultra Low Emission Zone (ULEZ) came into force on 8 April 2019 and covers vehicles entering or being driven in London's existing Congestion Charge Zone. Inside this zone, petrol vans that don't meet the Euro 4 standards, have to pay a daily charge – that's vans registered with the DVLA from January 2006. For diesel van drivers, vehicles must meet Euro 6 standards, which generally applies to vans sold from September 2016.
From October 2021, the ULEZ is expanding from central London and you'll have to register to pay a daily charge, or risk a £160 fine if you enter the zone in a vehicle that doesn't meet the standards. Cameras capture your number plate automatically and check vehicle databases to find out whether you're liable for a charge. You can check if your vehicle meets the ULEZ standards and search the ULEZ expansion area on Transport for London's website.
If you travel in London and its surrounding areas a lot, a van that ticks those environmental boxes could save a lot of money for your business.
Diesel tax for vans
While there's no single tax called 'diesel tax', it's now used as a catch-all term when discussing emissions charges and parking surcharges for diesel vehicles in city centres. And as we've discussed, these charges mainly affect drivers using older diesel vehicles, sold before the end of 2016.
The parking surcharge applies in some London boroughs, to discourage diesel drivers from travelling into the city centre. In some locations, it can be up to 50% on top of a standard parking charge.
If you're still not sure whether to switch to an eco-van, here are some advantages and disadvantages that may sway your decision.
Advantages of eco vans
- Hybrid vans are cheaper to run as they offer better fuel economy than traditional petrol and diesel vehicles.
- Electric vans are even cheaper to run, as electricity is cheaper than fuel, and in some cases, you can recharge your vehicle without paying the full 20% VAT on the electricity you use. According to This is Money, this reduces annual running costs by an average of 21%.
- Electric vehicles are currently exempt from vehicle excise duty (VED) and pay no fuel duty, although this could change in the future.
- Low-emission vehicles are exempt from congestion charges in London, and if your vehicle meets the LEZ and ULEZ standards, the savings add up. The Congestion Charge is £15 per vehicle, per day, and the ULEZ charge is £12.50 for vans up to and including 3.5 tonnes.
- According to Zap-Map, as of September 2021, there were more than 43,000 public electric vehicle charging points across more than 16,000 locations in the UK. So it's never been easier to charge on the go, reducing 'range anxiety', the stress of running out of electricity in a battery-powered vehicle. As the 2030 petrol and diesel ban gets closer, it's likely the resale value of non-electric vehicles will fall.
Disadvantages of eco vans
- Even with buying incentives from the Government, hybrid and electric vans can be expensive – they're likely to cost much more upfront than a petrol or diesel equivalent.
- The range of electric vans is still limited. For example, the Peugeot Partner L2 Electric quoted range is 106 miles, even when running at its most efficient. So some electric vans may only be suitable for local business, rather than long journeys.
- Charging can take a long time, which may not suit businesses that require their vans to be in constant use. For example, the Peugeot Partner Electric can rapid charge to 80% in 30 minutes, but using a regular 11kW charging point, most commonly used at workplaces, it could take as long as six hours to fully charge.
The government has outlined what classifies as Zero and Ultra Low Emission vehicles. So if you're looking to switch your van, this may be a good place to start.
Should you invest in an eco van?
Choosing whether to update your van or fleet is a big decision. Weighing up the costs and benefits is essential before you make a purchase. Consider your options, investigate whether the advantages of an electric van outweigh the extra initial outlay, and think about the longevity of your choice.
We asked leading expert on vans and the founder of the Transit Van Club, Peter Lee, for his advice on switching to an eco-friendly van. Here's what he had to say:
"Be wary of online reviews, unfortunately many of them can be fake or inaccurate. Buying an eco van is a serious financial commitment, whether it's new or second hand, so be sure to do your research before you commit to buying a low emissions vehicle. If you want to find good quality, impartial advice, I recommend checking the likes of Auto Express, Parkers or What Van. And read customer reviews for honest opinions.
Can I afford a new electric vehicle?
To encourage vehicle owners to go electric, the Government offers two grants to reduce the cost of making the switch.
The first is the plug-in car grant, which also applies to vans. The grant pays 35% of the purchase price for eligible, approved vehicles. It's capped at £3,000 for small vans and up to £6,000 for large vans. A list of low-emission vehicles eligible for a plug-in grant can be found on the Government website.
You don't have to do anything if you want to buy one of these vehicles. The dealer will include the value of the grant in the selling price. This way you pay them less money than the list price and the dealer applies for the grant from the Government directly, saving you the hassle of paperwork.
The second is the Electric Vehicle Homecharge Scheme (EVHS) to help people charge their electric vehicles at home. The Government pays 75% towards the cost of one chargepoint and its installation, with a cap of £350. If you use an authorised EVHS installer. Like the plug-in car grant, the installer checks that they qualify and then applies on the customers' behalf. Visit the Government website for a list of vehicles eligible for the Electric Vehicle Homecharge Scheme.
Business van insurance
Whatever kind of van you choose, you need to make sure you've got the right business van insurance in place. We can help. Take a look at our van insurance to find out how we can help you tailor a policy to your needs.