Salary sacrifice boosts electric vehicle take-up

Six out of 10 employees (62%) who plan to get an electric vehicle as their next car say a key incentive is the benefits available through a salary sacrifice scheme, according to new research.

Tusker’s annual EV Driver Survey found that 40% of the survey’s respondents said they plan to get an EV the next time they change cars, with only 10% intending to drive a petrol car.

Nearly 6,000 UK employees took part in the 2024 survey, comprising 4,300 employed driving licence holders, and 1,300 EV drivers and 300 petrol car drivers in schemes provided by Tusker.

Kit Wisdom, managing director at Tusker, said: “It’s undeniable that company car and salary sacrifice schemes are playing a major part in supporting EV take-up. Industry data shows that recent growth in EV market share could not have been achieved without the significant benefits linked to salary sacrifice.

“These results underline that incentives have played a critical role in supporting the uptake of EVs to date – and it’s vital that the government ensures that the incentives remain stable and strong enough to encourage more consumers and businesses to switch.

“The research in our report bears this out – drivers say the schemes’ tax advantages are one of the main reasons they plan to go electric or have already done so. We’ve also found that one of the biggest barriers to adoption of EVs is the perceived high purchase cost. This does not concern employees who choose an EV through a workplace salary sacrifice scheme as they aren’t required to pay for their car upfront.”

Data published earlier this year by the British Vehicle Rental and Leasing Association (BVRLA) found that take-up of salary sacrifice car schemes rose by 47% in the final three months of 2023 compared with the same period in 2022, with 84% of employees opting for an EV.

This compared to 66% of private contract hire agreements for petrol vehicles, with EVs representing only 16%.

The electric vehicle take-up research also found that alongside tax savings benefits, 60% of employees said that cheaper running costs are a key consideration in choosing an EV. Fifty-two per cent also said that environmental benefits are a key reason to switch from a petrol or diesel car.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Email

This field is for validation purposes and should be left unchanged.

Δ

Reward, compensation and benefits opportunities

Browse all comp and benefits jobs