Fleet Evolution has blamed Chancellor Rachel Reeves’ Autumn Budget for a 43% rise in returned electric and hybrid vehicles, citing increased redundancies following changes to employer NIC and Minimum Wage thresholds.
Midlands-based salary sacrifice and fleet management provider Fleet Evolution has reported its highest ever level of returned vehicles due to staff redundancies, directly linking the surge to tax and wage policy changes introduced in the Autumn Budget.
Andrew Leech, founder of Fleet Evolution and head of Mercia Fleet Management, said: “The pigeons are clearly coming home to roost. Following on from Rachel Reeves’ misguided first Budget, which she said would not affect ‘working people’, we have seen record levels of returned vehicles due to redundancies of working people.”
Leech said that April saw a 43% increase in returned electric and hybrid vehicles compared to previous months – the sharpest spike since the company launched in 2012. He attributed the rise to employer cost pressures following the rise in employer National Insurance Contributions from 13.8% to 15.0%, a lower NIC threshold, and increases to the National Minimum Wage, all of which came into effect last month.
“It did not take a rocket scientist to realise that far from having no effect on working people, the Budget changes would have a profound effect on recruitment and retention of employees,” he added.
Leech confirmed that Fleet Evolution’s client companies would not face penalties or additional costs due to the redundancies, noting: “We are the only salary sacrifice provider in the UK which has a no-quibble returns policy and provide leaver protection on all our vehicles. So, staff can hand them back without fear or favour and without burdening their employers with additional costs.”
Despite the increase in returns, the company said vehicles were being quickly redeployed via its short-term subscription service, Subscribe Electric, operated by sister company Mercia Fleet Management. Leech said there had been “plenty of short-term demand” as businesses avoid long-term lease commitments amid ongoing economic uncertainty.
He added: “Businesses are realising that one way of mitigating the effect of these increases and exerting greater control over costs is to flexibly introduce electric cars on subscription rather than long-term leases. As such, we are seeing a marked lift-off in the number of cars provided by this service.”
Subscribe Electric offers a range of EVs with all-in monthly pricing including servicing, breakdown, tyres, and insurance. Only electricity needs to be added separately.
“Short term EVs can be highly attractive from a cost point of view at a time of rising costs for most businesses following the Budget. And because of their zero carbon emissions, they can also play a role in helping businesses meet their corporate sustainability targets at the same time,” Leech said.
