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How much does an (electric) company car really cost?

10 March 2022 Karolien Van Herpe Employers
From list price to Total Cost of Ownership

Starting in 2026, new commercial vehicles must be carbon emission free. Will that take a big bite into companies' budgets? You won't know until you do some calculations. Although the average purchase price of electric company cars is half of that of an internal combustion engine car - according to an analysis by Acerta - the real cost shifts in favour of electric cars. So don't be led by the list value of a company car, but look at the real cost with the 'Total Cost of Ownership'.

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List price is not a guide

Companies are often put off by the list price of commercial vehicles. An analysis by Acerta shows that the average list price for electric company cars is €51500, while that of a fossil fuel car is around €34500. However, the list price is not the only factor to take into account. It's best to look at the Total Cost of Ownership, to identify the full cost of the company vehicle.

TCO provides basis for comparison

The TCO considers the purchase price, taxes, insurance costs, consumption, fuel and/or charging costs and tax deductibility. This gives you a clear insight into the annual cost price of a company car, and allows you to compare different company car models on an objective basis. In addition, the TCO for electric commercial vehicles is shifting toward the TCO for cars with internal combustion engines. And that's a positive sign for the greening of mobility.

Calculate company car's TCO

Are you looking to add to your company fleet? Calculate the TCO and you'll save a lot of budget in the long run by choosing the right company car(s). We give you an example of a TCO calculation below, comparing an electric company car with a fossil fuel company car.

  Diesel Electric
Catalogue price 26241,59 euro 39842,78 euro
CO2 emissions (g/km) 99 0
Leasing rate (excl. VAT) 6071,52 euro 8358,48 euro
Fuel costs/charging costs 1440,00 euro 600,00 euro
CO2 contribution (per year) 380,52 euro 330,48 euro
Insurance costs 121,32 euro 162,60 euro
Corporation tax non-deductible costs 1503,38 euro -
Non-deductible VAT 771,96 euro 864,36 euro
TCO per year 10288,70 euro 10315,92 euro

Figure: Example of Total Cost of Ownership

Tip: In your car policy, it is best to state car budgets based on TCO, not lease rates. That way you'll be ready for the switch to electric cars and be completely future proof.

Green fleet, a matter of time

The greening of the vehicle fleet has already started, but companies still have some time to make the switch. The law surrounding the tax greening of mobility has been published, and imposes that all new commercial vehicles must be carbon emission free from 2026.

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Written by Karolien Van Herpe

Senior Legal Consultant Legal & Reward

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