As the UK government continues to push for greener initiatives, electric cars have become increasingly popular. The main attraction for both employers and employees is the EV salary sacrifice scheme.

By participating in an EV salary sacrifice scheme, both employers and employees can enjoy cost savings and contribute to environmental sustainability along the way! This article will delve into the specifics of how these schemes operate, the financial advantages they offer, and the broader positive impacts on sustainability.

We will provide a comprehensive overview of the mechanics behind EV salary sacrifice schemes and discuss the various ways in which they benefit both employees and employers, ultimately supporting the transition to a greener future in the UK.

What is an EV Salary Sacrifice Scheme?

An EV salary sacrifice scheme is a flexible financial arrangement that permits employees to lease an EV through their employer. The key feature of this scheme is that the leasing cost is deducted directly from the employee’s gross salary before tax and National Insurance contributions are applied. By reducing the taxable income, employees can benefit from substantial savings on both tax and National Insurance payments. This arrangement not only makes EVs more affordable for employees but also aligns with governmental incentives to reduce carbon emissions.

For employers, implementing an EV salary sacrifice scheme can lead to cost efficiencies as well. The reduction in National Insurance contributions on the employee’s reduced gross salary can offset some of the costs associated with administering the scheme. Additionally, such programmes can enhance the overall benefits package offered by the employer, making the company more attractive to prospective and current employees.

Benefits for Employees

1. Tax and National Insurance Savings

By opting for an EV salary sacrifice scheme, employees can benefit from reduced tax and National Insurance contributions. Since the lease payments are made from the gross salary, the taxable income decreases, resulting in substantial savings.

2. Access to Premium EVs

Leading salary sacrifice car schemes often provide access to high-end electric vehicles that might be otherwise unaffordable. Employees can enjoy the latest EV models with advanced features, contributing to a more enjoyable and environmentally friendly driving experience.

3. Lower Running Costs

Electric vehicles typically have lower running costs compared to traditional petrol or diesel cars. With savings on fuel, reduced maintenance costs, and exemptions from certain charges (such as London’s Congestion Charge), employees can enjoy significant long-term financial benefits.

4. Environmental Impact

Driving an electric vehicle reduces the carbon footprint and supports the UK’s goal of achieving net-zero emissions by 2050. Employees can take pride in contributing to a cleaner environment.

Benefits for Employers

1. Attract and Retain Talent

Offering an EV salary sacrifice scheme can enhance an employer’s benefits package, making it more attractive to potential recruits. It also helps in retaining current employees by providing them with valuable and cost-effective benefits.

2. Cost Neutrality

For employers, EV salary sacrifice schemes are often cost-neutral. The savings on National Insurance contributions can offset the administrative costs of running the scheme, making it an economically viable option.

3. Corporate Social Responsibility (CSR)

Implementing an EV salary sacrifice scheme demonstrates a commitment to sustainability and corporate social responsibility. This can improve the company’s public image and align with broader environmental goals.

4. Employee Well-being

Providing employees with a cost-effective means to drive electric vehicles can contribute to their overall well-being. With lower running costs and the convenience of driving a new EV, employees may experience reduced financial stress and increased job satisfaction.

How to Implement an EV Salary Sacrifice Scheme

1. Assess Feasibility

Evaluate whether an EV salary sacrifice scheme is feasible for your organisation. Consider the number of interested employees, potential cost savings, and administrative requirements.

2. Choose a Provider

Select a reputable provider that offers a range of electric vehicles and comprehensive support services. Ensure they can handle the administrative tasks and provide a seamless experience for both the employer and employees.

3. Communicate the Benefits

Educate your employees about the advantages of the scheme. Highlight the financial savings, environmental impact, and access to premium EV models. Provide clear guidance on how they can participate in the programme.

4. Monitor and Review

Regularly review the scheme’s performance to ensure it continues to meet the needs of your employees and the organisation. Gather feedback and make adjustments as necessary to enhance the programme’s effectiveness.

Conclusion

The EV salary sacrifice scheme offers a win-win situation for both employers and employees in the UK. With significant financial savings, access to premium vehicles, and a positive environmental impact, it’s an attractive option for forward-thinking organisations. By implementing such a scheme, employers can demonstrate their commitment to sustainability and employee well-being, while employees can enjoy the benefits of driving an electric vehicle at a reduced cost.

Adopting an EV salary sacrifice scheme is a step towards a greener, more sustainable future for everyone.

Salman Safdar, subject matter expert at Ansible Motion

The automotive and motorsport industries have long been driven by the relentless pursuit of performance, efficiency and innovation and as these sectors evolve, so do the tools and technologies that support them.

Among these, Driver-in-the-Loop (DIL) simulation stands out as a transformative force, offering unprecedented opportunities for development, testing and optimisation. From motorsport through to broader automotive OEM applications, the integration of advanced simulation tools is undoubtedly accelerating progress and redefining the boundaries of what’s possible.

At the heart of all effective simulation is the interaction between humans and technology. High-fidelity simulators provide drivers with realistic feedback that closely matches what they would experience in the real world – an approach that’s vital for optimising performance and gaining that all-important competitive edge.

The ability to simulate multiple racing cars and series underscores the versatility of modern simulators. By allowing extensive and varied test programs to be conducted in a controlled environment, teams can make quick setup changes, explore various chassis configurations, and understand track conditions without the expense and time constraints of on-track testing. This not only strengthens the collaboration between drivers and engineers but also enhances the overall development process.

Only recently, topflight motorsport teams Penske Autosport and Honda Racing Corporation USA (HRC) announced their respective investments in DIL simulation – with HRC upgrading its simulator in time for this year’s Indianapolis 500.

Capable of replicating the current Dallara-Honda Indy car, Acura ARX-06 hybrid GTP machine and a variety of Honda and Acura concept racing vehicles, Ben Schmitt, head of the Vehicle Performance Group at HRC US explains in the firm’s official press release: “The new simulator is superior in every way to our original DIL simulator. The vehicle physics models have continued to evolve from the original simulator, including the tyre models, and our data acquisition capabilities are exponentially higher than previously. The new motion platform, cockpit and vision systems create a vehicle dynamics experience for the drivers that is our closest recreation yet of real-world conditions.”

Realism is also key for those competing in the FIA ABB Formula E Championship – providing a data-rich environment where drivers can learn track layouts, optimise energy management strategies, and experiment with different race scenarios.

When it comes to gaining a competitive edge – on and off the track – engineers and drivers are looking for tools they can trust, and DIL offers the ability to replay and analyse multiple scenarios repeatedly, via a truly immersive experience that mirrors real-world conditions. However, engineers also need the capability to connect with a vehicle’s onboard powertrain ECUs via Hardware-in-the-Loop (HIL) and Software-in-the-Loop (SIL) systems – integration which facilitates the validation of critical components such as torque maps and electro-mechanical driver controls, ensuring that both the hardware and software are finely tuned before hitting the track.

One of the standout features of contemporary simulation environments is their ability to integrate with other advanced tools such as engineering-grade visual simulation environments – crucial for teams that need to adapt quickly to changing conditions. For example, there’s no need to wait for a real rainstorm because weather variations can be conjured up with the touch of a button; multiple tyres can be driven in rapid succession; a virtual racetrack can even be set up to loop one particularly critical track segment continuously.

While motorsport often leads in adopting cutting-edge technologies, the benefits of simulation extend well beyond the circuit. Automotive manufacturers are increasingly leveraging simulation to enhance vehicle development processes, reduce costs, shorten development cycles and reduce the environmental impacts inherent in the traditional build-and-test approach.

As the automotive and motorsport industries continue to evolve, the role of simulation will only become more critical thanks to its ability to provide a controlled, repeatable, and data-rich testing environment that is flexible as well as sustainable.

Whether it’s mastering the intricacies of a demanding street circuit or refining the dynamics of a new road car, simulation offers unparalleled opportunities to innovate and excel. As we look to the future, the seamless integration of these tools will undoubtedly expedite progress and set new standards for excellence in both motorsport and automotive development.

Rolf Bienert, Managing and Technical Director, OpenADR Alliance

Last year, what was the Department for Business, Energy & Industrial Strategy and Ofgem published its Electric Vehicle Smart Charging Action plans to unlock the power of electric vehicle (EV) charging. Owners would have the opportunity to charge their vehicles while powering their homes with excess electricity stored in their car.

Known as vehicle to grid (V2G) or vehicle to everything (V2X), it is the communication between a vehicle and another entity. This could be the transfer of electricity stored in an EV to the home, the grid, or to other destinations. V2X requires bi-directional energy flow from the charger to the vehicle and bi- or unidirectional flow from the charger to the destination, depending on how it is being used.

While there are V2X pilots already out there, it’s considered an emerging technology. The Government is backing it with its V2X Innovation Programme with the aim of addressing barriers to enabling energy flexibility from EV charging. Phase 1 will support development of V2X bi-directional charging prototype hardware, software or business models, while phase 2 will support small scale V2X demonstrations.

The programme is part of the Flexibility Innovation Programme which looks to enable large-scale widespread electricity system flexibility through smart, flexible, secure, and accessible technologies – and will fund innovation across a range of key smart energy applications.

As part of the initiative, the Government will also fund Demand Side Response (DSR) projects activated through both the Innovation Programme and its Interoperable Demand Side Response Programme (IDSR) designed to support innovation and design of IDSR systems. DSR and energy flexibility is becoming increasingly important as demand for energy grows.

The EV potential

EVs offer a potential energy resource, especially at peak times when the electricity grid is under pressure. Designed to power cars weighing two tonnes or more, EV batteries are large, especially when compared to other potential energy resources.

While a typical solar system for the home is around 10kWh, electric car batteries range from 30kWh or more. A Jaguar i-Pace is 85kWh while the Tesla model S has a 100kWh battery, which offers a much larger resource. This means that a fully powered EV could support an average home for several days.

But to make this a reality the technology needs to be in place first to ensure there is a stable, reliable and secure supply of power. Most EV charging systems are already connected via apps and control platforms with pre-set systems, so easy to access and easy to use. But, owners will need to factor in possible additional hardware costs, including invertors for charging and discharging the power.

The vehicle owner must also have control over what they want to do. For example, how much of the charge from the car battery they want to make available to the grid and how much they want to leave in the vehicle.

The concept of bi-directional charging means that vehicles need to be designed with bi-directional power flow in mind and Electric Vehicle Supply Equipment will have to be upgraded as Electric Vehicle Power Exchange Equipment (EVPE).

Critical success factors

Open standards will be also critical to the success of this opportunity, and to ensure the charging infrastructure for V2X and V2G use cases is fit for purpose.

There are also lifecycle implications for the battery that need to be addressed as bi-directional charging can lead to degradation and shortening of battery life. Typically EVs are sold with an eight-year battery life, but this depends on the model, so drivers might be reluctant to add extra wear and tear, or pay for new batteries before time.

There is also the question of power quality. With more and more high-powered invertors pushing power into the grid, it could lead to questions about power quality that is not up to standard, and that may require periodic grid code adjustments.

But before this becomes reality, it has to be something that EV owners want. The industry is looking to educate users about the benefits and opportunities of V2X, but is it enough? We need a unified message, from automotive companies and OEMs, to government, and a concerted effort to promote new smart energy initiatives.

While plans are not yet agreed with regards to a ban on the sale on new petrol and diesel vehicles, figures from the IEA show that by 2035, one in four vehicles on the road will be electric. So, it’s time to raise awareness the opportunities of these programs.

With trials already happening in the UK, US, and other markets, I’m optimistic that it could become a disruptor market for this technology.