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The Benefits of Using Electric Vehicles as Company Cars

The Benefits of Using Electric Vehicles as Company Cars

Company cars are an expensive investment, but they’re also a perk that’s highly valued by key members of the team. If you’re thinking about providing employees with a vehicle through your company then it’s important that you think carefully about the most tax-efficient and cost-effective way to do so.

Personal use of a company vehicle is considered to be a taxable fringe benefit by the Internal Revenue Service (IRS), which means you must consider the tax implications before you make a purchase. In the same way as an employee’s wages, employers have to calculate and withhold the income tax, Medicare tax and Social Security tax due. This is not based on the actual cost of the vehicle but on the amount an employee would have to pay to lease the equivalent vehicle.

 Why Should Your Company Consider an Electric Vehicle?

While the purchase price of electric cars is often higher than equivalent gas models, the federal government and a number of states offer tax incentives, such as tax credits, that can lower the upfront cost of plug-in vehicles.

Currently, the IRS tax credit on electric cars ranges from $2,500 to $7,500, which can make a significant dent in the purchase price. The size of the tax credit you will receive depends on both the size of the vehicle and the battery capacity. You can find out more about the available tax credits for electric cars here.

In addition to tax efficiency, there are also benefits associated with the boost to your business’s green credentials. With environmental issues more important than ever for today’s consumers, you can steal a march on the competition by aligning your business with the concerns of your clients and customers and showing the ethical side of your business.

 Which Electric Vehicles Make the Best Company Cars?

  1. Nissan Leaf – Cost: $29,990 | Range: 151 miles

The Nissan Leaf was one of the first mass-produced electric cars sold in America, with the 2018 model offering more power, a longer range, and a lower price tag than previous incarnations. Although the purchase price might be more than an equivalent gas-powered car, the tax credits you’ll receive plus the savings on insurance, maintenance, and fuel costs can be significant.

The Nissan Leaf is one of the best electric cars in terms of its range and can travel 151 miles on a single charge. It can also be fast-charged at any CHAdeMo-compatible charger, so your team can get back on the road fast. If the Nissan Leaf’s bland styling is a turnoff, there are a number of other electric and hybrid vehicles that provide a low-cost company car option.

  1. Volkswagen e-Golf – Cost: $30,495 | Range 125 miles

Although the Volkswagen e-Golf lacks the battery range of the Nissan Leaf, the styling makes it a much more desirable option for many small business owners. As well as its sleek looks, the e-Golf retains the handling of its gasoline-powered equivalent. The electric motor also delivers an impressive 134-horsepower, providing the type of performance few other mid-range electric vehicles can match.

In terms of its EPA efficiency, the e-Golf delivers an impressive 126 miles per gallon equivalent (MPGe) in the city and 111 MPGe on the highway, making it an energy efficient alternative to conventional company cars.

  1. Tesla Model X – Cost $74,500 | Range 259 miles

If you’re looking for an electric car for yourself or one of your top performers, then the Tesla Model X is certainly worth your consideration. Although the acceleration of 0 to 60 mph in less than 3 seconds is not necessary for business use, the range of 237 miles to 295 miles on a single charge makes it well-suited to those who cover significant daily mileage.

Delivering EPA efficiency ratings of 91 MPGe in the city and 95 MPGe on the highway, you can be sure the Model X not only looks the part but will paint your business in the best possible light.

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by Irma Hunkeler // Irma Hunkeler works for ReSignal, a digital marketing agency. Her work allows her to get in touch and collaborate with experts across different industries including travel, retail, recruitment, technology and charitable institutions.

Opinions expressed by contributors are their own.