Fuel savings and running costs: how EVs can cut your business expenses
Whether you’re operating one van or managing a fleet of light commercial vehicles, switching to EVs can offer long-term savings and operational efficiency. In this article, we’ll take a look at how electric vehicles can significantly reduce business expenses in the UK, from fuel and maintenance savings to government incentives.
Breakdown:
1. Lower EV fuel costs
Fuel prices in the UK have been consistently high in recent years, with petrol and diesel averaging well above £1.50 per litre. By contrast, electric charging can work out considerably cheaper per mile depending on where you fill up.
According to the AA’s monthly EV Recharge Report, the average price for domestic electricity was just 25p/kWh in February 2025. This is the cost to charge an electric van on your driveway at home. With many electric vans capable of achieving 2.5 miles per kWh, that equates to just 10p per mile.
At the time of writing this guide (April 2025), the average price for a litre of diesel was 141.69p according to the RAC’s Fuel Watch initiative. With the best diesel vans able to achieve 40mpg, that equates to a running cost of 16p per mile.
With the range of an electric van more than capable of getting you back to base each day, you shouldn’t need to recharge during your daily operation – but naturally there will be times when you may need to top up while on the road. As this will be a quicker charge (for example, during your lunch break), it’s more expensive than domestic electricity – the February 2025 average was 74p/kWh for a rapid charge. However, there are still savings to be had. For example, Instavolt offers an off-peak tariff of just 54p per kWh when you start a charging session using its app between 8pm and 7am – so it definitely pays to shop around.
Charging up your van at home or at your depot will always work out cheaper in the long run, though you have to factor in the cost to install the hardware – chargers and solar panels/wind turbines – in the first instance.
Using the figures above, let’s consider a delivery van covering 2,000 miles per month:
- Diesel van (16p/mile): £320/month
- Electric van (10p/mile): £200/month
- Savings: £120/month, or £1,440/year
When scaled across a fleet, that difference becomes substantial. For a fleet of 10 vehicles, that equates to an annual saving of £14,400 – purely on fuel.
2. Lower maintenance costs
If you’ve been operating diesel vans, the chances are you’ll be all too familiar with expensive maintenance and service bills. That’s because vehicles with an internal combustion engine require regular oil changes, filter replacements, clutch maintenance and more.
By contrast, electric vans have fewer moving parts – there’s no propshaft, for example – and the motors are sealed units that power the wheels directly. As a result, zero-emission vans generally require far less upkeep, so will spend less time in the garage and more time out on the road where they belong – earning you money.
If you’re upgrading from an old diesel to a new electric van, you’ll also benefit from the latest advanced driver assistance systems. Modern EVs are equipped with safety features such as autonomous emergency braking, adaptive cruise control and lane departure warnings. While not strictly maintenance items, this technology can reduce the chance of your van being involved in a costly accident.
A 2022 study from the RAC Foundation found that EVs could be 30–50% cheaper to maintain over their lifetime compared to conventional vehicles. Regenerative braking reduces wear on brake pads, and with no oil there is no need for oil changes or exhaust repairs. For businesses that translates to lower service bills, fewer trips to garages and less downtime, benefitting your bottom line and your customers.
3. Financial incentives
The UK government offers a range of incentives to support businesses adopting electric vehicles, making the upfront investment more appealing. Incentives fall into one of two categories: acquisition and operation.
Acquisition benefits include the plug-in van grant and capital allowances, while operational incentives include the workplace charging scheme and clean air zone exemptions.
- Grants for vans: eligible small vans can receive up to £2,500 off the purchase price through the plug-in van grant, while for larger vans it’s as much as £5,000.
- 100% first-year allowance (FYA): if you purchase a brand-new electric van for your limited company, you can deduct the full cost of a new electric van from your corporation tax bill. This capital allowance can be claimed if the van is purchased outright by your company, or via a hire purchase agreement.
- Benefit-in-kind tax advantages: benefit-in-kind (BIK) tax is calculated based on a vehicle’s list price, its CO2 emissions and its fuel type. For electric vans, the charge is zero. For the 2025/26 and 2026/27 tax years, an employee who pays 20% tax and drives a diesel van will be hit with an £804/year charge, and an additional £153.80 per year if the fuel benefit charge applies.
- Workplace charging scheme (WCS): this is open to businesses, charities, public-sector organisations and small accommodation businesses. The WCS covers up to 75% of the cost of installing EV charge points at their sites, capped at a maximum of £350 per socket, and 40 sockets across all sites per applicant.
- Clean air zone exemptions: Several cities across the UK have introduced clean air zones, including London, Bristol, Manchester, Liverpool, Portsmouth, Sheffield, Birmingham, Leicester and Oxford. Driving an electric van is a surefire way to ensure you don’t have to pay the charge to drive in these zones – for example, it’s free to drive an EV into central Oxford, whereas Oxfordshire Council charges up to £10 per day for diesel vans to drive into the zero emission zone, and this fee doubles to £20/day from August 2025[1]. The London Congestion Charge is £12.50 per day, but electric vans are exempt until December 2025.
These financial benefits make the switch even more cost-effective for UK businesses.
Conclusion
EVs may carry a higher upfront cost than petrol or diesel vehicles, but the total cost of ownership (TCO) – factoring in lower fuel costs and less-frequent servicing requirements – can make EVs significantly cheaper over their lifespan. A 2023 report from the Energy Saving Trust indicated that, in many cases, EVs become more cost-effective than diesel alternatives within three to five years of ownership.
Electric vehicles, therefore, aren’t just about saving the planet – they’re about saving money, too. Many UK businesses know that the real cost lies in doing nothing, as volatile fuel prices, maintenance costs and regulatory risks all erode profits over time.
Now is the time to assess your vehicle strategy, as with the right approach, your business can not only reduce its environmental impact, but also drive meaningful financial savings.
For more information, check out our step-by-step fleet transition guide to swap your diesel vans for electric vehicles.
[1] Source: https://www.oxfordshire.gov.uk/transport-and-travel/oxford-zero-emission-zone-zez/charges-oxfords-zez
