Octopus Energy launches electric car leasing scheme

Clean energy company Octopus Energy has launched an electric vehicle leasing scheme.

The company has offered EV-specific energy tariffs for consumers and businesses for a number of years to help drivers to save money when recharging. Fiona Howarth, CEO of Octopus Energy’s electric vehicle offshoot, told Motoring Research the addition of a leasing scheme will make Octopus a one-stop shop for electric car drivers.

Howarth explained: “There are benefits in bringing our energy and technology experience to the leasing sector. It enables us to move more quickly and start a different way of thinking. It’s all about working with consumers as they get their car and we have a lot of experience of doing this from the energy side already.”

The intention behind the leasing division – called Electric Dreams – is to make switching to an EV as easy as possible, and Howarth added Octopus would have an advantage over a traditional leasing company when it comes to procuring EVs, too.

“We just focus on this one type of vehicle – EVs – and we can also pull together our knowledge about charging and green energy tariffs.”

As well as providing leasing for private motorists, the company is offering salary sacrifice schemes for businesses. Similar to a cycle-to-work scheme, a salary sacrifice allows employees to pay for an EV out of their gross salary. It can save thousands of pounds on both national insurance and income tax as they take advantage of preferential Benefit-in-Kind rates for EVs compared with petrol or diesel cars.

Huge savings possible

To illustrate its point, Octopus Energy claimed a 20 percent taxpayer can make a saving of £7,104 on a Peugeot e-2008 over four years compared with similar petrol or diesel vehicles. And a 40 percent taxpayer can save £13,920 on a Tesla Model 3 over four years.

Unlike a traditional company car scheme, salary sacrifice is open to all employees, but Howarth said the awareness of such schemes is low at the moment, adding that some firms are overwhelmed by the paperwork. “When businesses do want to put it into practice, they may find it is tricky and complicated, so we’re making it easy.”

If an employee leaves a business at short notice, a company car can be an expensive asset, but Octopus Energy will negate that risk. 

“We are giving them [employers] generous terms around early termination. If you leave the business and you return the car before the end of the contract, we will cover businesses, so it is a low-risk scenario,” Howarth explained.

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