UK Business Spotlight 13th November

Business Spotlight 13th November

As part of our ongoing mission to support UK businesses with innovation and funding, our business spotlight section contains news and resources which your company may find useful.

Bentley Goes Electric

Business spotlight Bentley

Bentley, a luxury carmaker, known for their epic 12-cylinder engines, has ambitiously planned to make only electric vehicles by 2030. The UK car manufacturer has promised to stop making fossil fuel cars and to be completely carbon neutral by this date. The strategy has been named Beyond 100, and it aims to be the “global leader in sustainable luxury mobility.”

Bentley will begin by discontinuing the traditional internal combustion engine vehicles, and switch to hybrids. They aim to make their first fully battery electric run car by 2025. 

Bentley has taken the lead in the car manufacturing world with this decision. Asie from Jaguar Land Rover, no other company has promised to go fully electric on such a limited timescale. 

The promise to be “end-to-end carbon neutral” is a bold move. The production of electric cars requires considerable amounts of energy, so achieving a carbon neutral aim will be tricky. As Bentley is famous for their large engines, and thus infamous for their immense carbon dioxide emissions, this target really is a significant change for the Bentley manufacturing process. 

In the current economic climate, Bentley believes that this environmental switch will make them “financially resilient and recession proof.’ Figures published at the end of October showed that car sales have fallen 1.6%, on course for the weakest month of sales since 1982. On the other hand, electric car sales did the opposite, tripling since the beginning of 2020. 

Adrian Hallmark, Bentley’s Chief Executive, explains the paradigmatic shift: 

“Since 1919, Bentley has defined luxury grand touring. Being at the forefront of progress is part of our DNA; the original Bentley boys were pioneers and leaders. Now, as we look Beyond100, we will continue to lead by reinventing the company and becoming the world’s benchmark luxury car business.”

As well as this innovative move towards electric travel, Bentley has also pledged to make their factories plastic free by 2030. In addition, they’re focusing on workforce diversity, aiming to raise the proportion of women and ethnic minorities in their staff from 20% to 30%.

Following the Volkswagen “dieselgate scandal” of 2015, carmakers are facing steep fines if they do not reduce emissions on their cars. The Environmental Protection Agency uncovered that VW engineers were installing cars with software to override the emissions test. Now, more than ever, car companies are being held accountable for their carbon dioxide emissions and impacts on the environment. 

Bentley’s Beyond100 is a timely and tactical shift.

Tax Incentives for Electric Cars

Electric cars were introduced to combat the issues high exhaust emissions were having on the environment. A surge of interest in electric cars occurred in the 2010s, alongside an international push to take climate change more seriously. Acknowledging the impact that CO2 emissions were having on the ozone layer, and thus climate change.

However, buying electric cars has now expanded further than social responsibility. The UK government has created tax incentives to push more buyers into opting for electric. The UK government, namingly the Office for Low Emission Vehicles, has announced a number of tax benefits when buying electric cars, or ultra low emission vehicles (ULEVS).

Fuel Duty – Fuel duty is only applied to combustible fuels, not to electricity. THerefore, all ULEVs are fuel duty free.

Vehicle Excise Duty (VED) – VED is vehicle tax for every vehicle on public roads. The Driver and Vehicle Licensing agency (DVLA) are responsible for collecting this tax. Zero emission vehicles are exempt from paying VED. Depending on the CO2 emissions, your VED rates rise ascending in price to coincide with emission output. For 1-50g/km of CO2 emissions, your first year rate is £10, whereas those with over 256g/km have a first year rate of £2070. 

Value Added Tax (VAT) – electricity for ULEVs will attract a VAT of 5%. This is much lower than the road fuel VAT, which is 20%. 

The above tax benefits apply to all. For businesses, whose vehicles make up over half of those on the road in the UK, there are even more tax incentives from the government. These include Enhanced Capital Allowances (ECAs), Workplace electric vehicles charging tax exemption – Benefit in Kind, Van Benefit Charge, and many more. 

Making the decision to move to electric really is a good decision if you’re looking to buy a new car. This graph from EDF shows the difference in Benefit in Kind between the e-golf and the Golf GT:

Tax Incentives for electric cars

Mileage has often been an issue for people considering buying electric. While these cars run smoothly, their ranges are short. This has put many off purchasing, as long distance journeys must accommodate charging spots. However, EDF explains that, as these mileage ranges increase with the production of more cars, ‘electric cars are better equipped than ever to deal with the needs of most.’

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