The UK’s van population is growing quickly as consumer habits change, and government incentives can help further the business case for fleets. Here’s what you need to know.
Although most of the automotive industry will probably look back on 2020 as a year to forget, the market for commercial vehicles is incredibly buoyant. A 46.1% rise in online retail spending last year has contributed to record van registrations for the first five months of 2021. That’s on top of the UK’s licensed van population almost doubling, to 4.2m vehicles, since the turn of the Millennium.
Electrification is happening, but slowly. There were only 15,000 hybrid and electric vans on UK roads at the end of 2020, but the capability and variety of new models is improving, and there’s a package of support measures in place for organisations making the switch.
What funding is available for electric vans?
Administered by the Office for Zero Emission Vehicles (OZEV, formerly OLEV), the Plug-in Van Grant offers discounts to offset the extra cost of an electric van. This covers up to 35% of the cost for vehicles emitting less than 50g/km CO2 and with an electric range in excess of 60 miles. Maximum funding levels are based on gross vehicle weight (GVW).
- Small vans (under 2,500kg GVW) qualify for up to £3,000
- Large vans (2,500-3,500kg GVW) qualify for up to £6,000
OZEV also provides grant funding for vehicles with a GVW over 3,500kg, covering up to 20% (or £16,000) of the purchase price. Eligibility requires a 60-mile electric range with CO2 emissions which are half that of a Euro 6 compliant combustion engine equivalent. Fleets can claim up to ten times, and the maximum funding level will be reduced to £6,000 after the grant has funded 250 vehicles.
How much funding is available for electric vehicle charging points?
Organisations deploying electric vans can claim up to 75% (capped at £350 per outlet) of the cost of charging equipment and installation through OZEV’s Workplace Charging Scheme. Drivers charging at home could also be eligible for the Electric Vehicle Homecharge Scheme, which provides similar support for domestic installations.
For more information about chargepoint grants, see the following guides:
How can electric vans reduce whole-life costs?
- Fuel: Electric vans could offer significant reductions in fuel costs for fleet operators. Brochure data for the Renault Kangoo E-Tech suggests running costs of 4.2p mile, even if it was charged on a flat-rate energy tariff. The equivalent diesel Kangoo would cost 11.8p per mile, based on average forecourt prices for May 2021.
- Maintenance: Electric motors have fewer service items while regenerative braking reduces wear on the mechanical brakes. Both result in reduced running costs; a five-year, 66,000-mile service plan for the Kangoo E-Tech electric van costs £750, compared to £1,075 for the diesel version.
- Tax: Fully electric vans (with a gross vehicle weight of less than 3,500kg) are exempt from paying vehicle excise duty (VED), which is currently £275 per year. As of 6th April 2021, drivers also do not have to pay the Van Benefit Charge for an electric van, even if they are permitted to use it for private journeys.
- Clean air zones: From 25 October 2021, only fully electric and hydrogen vehicles (0g/km CO2 emissions) will be exempt from the London Congestion Charge. Although most incoming clean air zones use Euro 6 emissions compliance as a cut-off point for diesel engines, going electric is likely to be a safer option for future-proofing your fleet. To find out more about clean air zones, click here.
What are the practical considerations for an electric van?
- Range: Improvements in battery technology are delivering longer ranges for new electric vans, while reducing the weight and cost compromises. Many new models also feature rapid charging, restoring most of the range in under an hour. However, even the longest-range models travel less than 200 miles on a full charge, and might not be suitable for inter-urban duty cycles as a result.
- Weight: Electric vans are often heavier than their diesel counterparts, and some exceed the 3,500kg GVW limit for light commercial vehicles. Licencing rules in the UK were changed in 2019, enabling electric vehicles with a GVW up to 4.25 tonnes to be driven on a standard Category B licence, avoiding the need for additional qualifications and reducing administrative burdens for fleets.
- Payload and towing: Most electric vans have the same size cargo area as a combustion engine model, but the additional weight of the battery can affect payload and towing capacity. Some examples* are provided below:
|Peugeot Partner LWB 1.6 BlueHDI||2,320kg||1,000kg||950kg|
|Peugeot e-Partner LWB 50kWh||2,396kg||750kg||750kg|
|Vauxhall Vivaro L2 1.5 Turbo D||3,100kg||1,458kg||1,800kg|
|Vauxhall Vivaro-e L2 75kWh||3,055kg||1,002kg||1,000kg|
|Citroën Relay L3H2 BlueHDI 140||3,500kg||1,495kg||3,000kg|
|Citroën ë-Relay L3H2 70kWh||3,500kg||740kg||N/A|
* Panel vans in equivalent trim levels. Data provided by manufacturers.
 Office for National Statistics. (2021). Retail sales, Great Britain.[online] Available at: https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/december2020[Accessed 23 Jun. 2021].
 SMMT. (2021). Van market reaches new heights with best May on record for registrations.[online] Available at: https://www.smmt.co.uk/2021/06/van-market-reaches-new-heights-with-best-may-on-record-for-registrations/[Accessed 23 Jun. 2021].
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 HM Revenue & Customs. (2020). Income Tax changes to the van benefit charge from 6 April 2021.[online] Available at: https://www.gov.uk/government/publications/income-tax-changes-to-the-van-benefit-charge-from-6-april-2021/income-tax-changes-to-the-van-benefit-charge-from-6-april-2021[Accessed 23 Jun. 2021].
 Transport for London (n.d.). Discounts and exemptions.[online] Available at: https://tfl.gov.uk/modes/driving/congestion-charge/discounts-and-exemptions[Accessed 23 Jun. 2021].
 GOV.UK. (n.d.). Changes to licence requirements for alternatively fuelled vehicles.[online] Available at: https://www.gov.uk/government/publications/changes-to-licence-requirements-for-alternatively-fuelled-vehicles[Accessed 23 Jun. 2021].