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THE BMW GROUP GUIDE TO ALTERNATIVE FUELS. BMW Group Fleet & Business Sales CLICK ESC TO EXIT. Home. Introduction. Government grants and incentives. Benefit-in-kind tax. Practical considerations. Alternative fuel vehicle comparisons.

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Page 1: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

THE BMW GROUP GUIDETO ALTERNATIVE FUELS.

BMW Group Fleet & Business Sales

CLICK ESC TO EXIT.

Home. Introduction. Government grantsand incentives.

Benefit-in-kindtax.

Practicalconsiderations.

Alternative fuel vehicle comparisons.

Page 2: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

There are now many alternatively fuelled vehicles with different systems for efficient running, including traditional hybrids, pure electric, electric range extender, plug-in hybrids and hydrogen fuel cell cars.

Each has its own advantages and disadvantages, with all generally classed as low-emission vehicles. Choosing the right vehicles for your business can offer significant savings and also enable a more efficient fleet.

This BMW Guide to Alternative Fuels explains what complementary mobility technologies are available, how they work and the differences between them, as well as the benefits they could bring to your fleet.

INTRODUCTION.

BMW Group Fleet & Business Sales

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Home. Introduction. Government grantsand incentives.

Benefit-in-kindtax.

Practicalconsiderations.

Alternative fuel vehicle comparisons.

Page 3: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

GOVERNMENT GRANTS AND INCENTIVES.

BMW Group Fleet & Business Sales

LOW-EMISSION VEHICLES

Government grants and incentives Grants up to a maximum of 35%, or £3,500, are available for Government-approved low-emission cars with CO2 emissions of less than 50g/km and a zero emission range of over 70 miles.

Grants are also available for motorcycles, mopeds, vans, taxis and large vans and trucks (see panel, right). For more information and details of Government-approved vehicles that are eligible for the grants, CLICK HERE.

The grants are administered by the Office for Low Emission Vehicles (OLEV), and the process of application is managed by the vehicle manufacturer and its retailer network rather than the purchaser.

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Cars – cars with CO2 emissions of less than 50g/km, zero emission range of 70 miles and a minimum top speed of 60mph receive a maximum grant of £3,500.

Motorcycles – motorcycles with no CO2 emissions and a range of at least 31 miles between charges receive a maximum grant of £1,500.

Mopeds – mopeds or scooters with no CO2 emissions and a range of at least 19 miles between charges receive a maximum grant of £1,500.

Vans – vans with CO2 emissions less than 75g/km and a zero-emission range of at least 10 miles receive a maximum grant of £8,000.

Taxis – purpose-built taxis with CO2 emissions of less than 50g/km and a zero emission range of at least 70 miles receive a maximum grant of 20%, or £7,500.

Large vans and trucks – vehicles with CO2 emissions of at least 50% less than the equivalent conventional Euro VI vehicle with the same carrying capacity, and a zero emission range of at least 10 miles, receive a maximum grant of 20%, £8,000.

You can find out more about low-emission vehicles on the Go Ultra Low website, CLICK HERE

Electric Vehicle Homecharge Scheme (EVHS)

The Electric Vehicle Homecharge Scheme (EVHS) provides grant funding of up to 75% of the cost of installing an electric vehicle chargepoint at a domestic property across the UK.

In line with the Government’s ‘Road to Zero’ strategy, electric vehicle chargepoints must use ‘smart’ charging technology with the ability to be remotely accessed and capable of receiving, interpreting and reacting to a signal.

Smart charging can avoid costly upgrades to the electricity network that may be required if electric cars cumulatively create peaks in demand. It can also help keep costs down for consumers who can benefit from off-peak charging.

Further information on the Electric Vehicle Homecharge Scheme can be accessed CLICK HERE.

Page 4: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

BENEFIT-IN-KIND TAX.

BMW Group Fleet & Business Sales

Benefit-in-kind (BIK) tax

From April 2020, a new two-tier company car benefit-in-kind (BIK) tax system is introduced – one for those driving a company car registered before 6 April 6 2020, and one for those driving a company car registered after 6 April 2020 (see tables, below right).

The appropriate percentages for BIK tax depend on the car’s CO2 emissions and its zero emission range.

From 6 April 2020, company car drivers choosing a pure electric car with zero tailpipe emissions will pay no BIK tax at all. The rates will then rise to 1% for the 2021/22 tax year and 2% for the 2022/23 tax year.

From 6 April 2020, the 0% BIK tax rate will also apply to new cars with CO2 emissions of 1-50g/km and a zero emission range of over 130 miles.

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Cars registered before 6 April 2020:

CO2 Electric BIK tax BIK tax BIK taxemissions range 2020/21 2021/22 2022/23(g/km) (miles) (%) (%) (%)

0 N/A 0 1 21-50 Over 130 2 2 21-50 70-129 5 5 51-50 40-69 8 8 81-50 30-39 12 12 121-50 Less than 30 14 14 14

Cars registered from 6 April 2020:

CO2 Electric BIK tax BIK tax BIK taxemissions range 2020/21 2021/22 2022/23(g/km) (miles) (%) (%) (%)

0 N/A 0 1 21-50 Over 130 0 1 21-50 70-129 3 4 51-50 40-69 6 7 81-50 30-39 10 11 121-50 Less than 30 12 13 14

BIK tax bands for low-emission cars

Page 5: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

BMW Group Fleet & Business Sales

Fuel dutyFuel duty is paid on each litre of road fuel purchased (or per kilogram in the case of gases). Therefore the fuel efficiency of a vehicle, the way a vehicle is driven and the distance driven will determine the total amount of duty paid. Electricity is not subject to fuel duty, so battery electric vehicles are duty-exempt.

Government Advisory Fuel Reimbursement Rates (AFR)AFR petrol reimbursement rates apply to petrol hybrids and AFR diesel reimbursement applies to diesel hybrids. There is no HMRC-set AFR equivalent for electric vehicles because electricity is not considered a fuel for the purposes of Fuel Benefit Charge (FBC) legislation.

Fuel Benefit Charge (FBC)As electricity is not considered a fuel, there is currently no fuel benefit charge. This means that if an employer allows an employee with a company or personally owned car to top up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work, this does not constitute a fuel benefit and no tax is payable.

In general terms, a benefit-in-kind is liable for tax and National Insurance contributions. If, however, the employer considers the benefit to be a ‘trivial benefit’, the employer can apply to HMRC for agreement to exclude the benefit from reporting grounds.

Enhanced capital allowances (ECA)Eligibility for enhanced capital allowances (ECA) for cars is based on CO2 emissions. If a car emits 50g/km or less of CO2 it qualifies for a 100% first-year capital allowance (FYA) until 31 March 2021, but the vehicle must be a new registration, not second-hand or used in any way.

Leased cars are not eligible for the 100% FYA.

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PRACTICAL CONSIDERATIONS.

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Page 6: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

PRACTICAL CONSIDERATIONS (continued).

BMW Group Fleet & Business Sales

Vehicle Excise Duty (VED)VED exemption in 2019/20 is only for zero-emission cars with a list price of £40,000 or less, with an exception made for those with zero emissions costing over £40,000. All cars costing over £40,000 attract an additional £320 a year for five years from the second year. For details of applicable VED rates, see the table (right).

VATVehicles are subject to standard levels of VAT (20%) regardless of their emissions of CO2 , but electricity has varying treatment.

Electricity that is supplied for domestic, non-business and charity use attracts 5% VAT, while electricity that is supplied for business use is subject to standard VAT at 20%.

Petrol, diesel and hydrogen are considered to be road fuels and therefore also attract the standard level of 20% VAT while electricity that is used to recharge a wholly battery-electric vehicle (BEV) or plug-in hybrid vehicle (PHEV) at home attracts VAT at 5%.

Electricity for low-emission vehicles that are recharged at work attract 20% VAT. Hydrogen used to refuel fuel cell electric vehicles (FCEV) also attracts VAT at 20%.

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2019/20 (from 1 April 2019)

VED CO2 First First Standard Standard Band emissions year year rate Yr2 on rate Yr2 on (g/km) rate (£) rate (diesels) (£)* (under £40,000) (£) (over £40,000) (£)**

A 0 0 0 0 320

B 1-50 10 25 145 465

C 51-75 25 110 145 465

D 76-90 110 130 145 465

E 91-100 130 150 145 465

F 101-110 150 170 145 465

G 111-130 170 210 145 465

H 131-150 210 530 145 465

I 151-170 530 855 145 465

J 171-190 855 1,280 145 465

K 191-225 1,280 1,815 145 465

L 226-255 1,815 2,135 145 465

M Over 255 2,135 2,135 145 465

* Applies to diesel vehicles that do not meet the Real Driving Emissions Step 2 (RDE2) standard. ** All cars with a list price over £40,000 are liable to a £320 supplement for five years following the first year rate, after which the rate reverts to the standard £145 a year. For cars with zero emissions the rate reverts to £0 after five years. Alternative fuel vehicles receive a £10 annual reduction. 2019/20 rates apply from 1 April 2019

Page 7: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

ALTERNATIVE FUEL VEHICLE COMPARISONS.

BMW Group Fleet & Business Sales

DRIVELINE

DESCRIPTION

GOVERNMENT GRANTELIGIBILITY

BIK TAX IMPLICATIONS

LONDON CONGESTION CHARGE ELIGIBILITY

REFUELLING

FUELLINGAVAILABILITY

ADVANTAGES

DISADVANTAGES

SUMMARY

PLUG-IN HYBRID (PHEV) Eg BMW 530e (Parallel Hybrid)

A petrol or diesel engine works with a battery powered electric motor. Both power units can be used together or individually, and the combustion engine can charge the battery.

No. Only Government-approved cars with CO2 emissions of less than 50g/km and a zero emission range of at least 70 miles qualify for the grant. CLICK HERE for a list of Government-approved grant-eligible vehicles.

Drivers of cars with CO2 emissions of 0-50g/km are liable for BIK tax at 16% (20% for diesels) in 2019/20.

A new two-tier BIK tax system applies from 6 April 2020 with different rules for cars already registered at that date, and new cars registered from 6 April 2020. Depending on CO2 emissions, PHEVs will benefit from reduced BIK tax rates from April 2020. Click the benefit-in-kind tax tab above for details.

Only vehicles that meet Euro VI standards (petrol and diesel), emit no more than 75g/km of CO2 and have a minimum 20-mile zero emission range qualify for the 100% cleaner vehicle discount. Taxis and Private Hire Vehicles are exempt from the charge if actively licensed with London Taxi and Private Hire (TPH). To find out if your car qualifies for exemption or a discount, CLICK HERE.

Recharging or conventional refuelling – the combustion engine drives the car and also charges the battery.

Widespread, as PHEVs can top up with fuel or recharge using a domestic supply or the charging network.

Capable of electric running for longer than a traditional hybrid. BIK tax advantages available, particularly from 6 April 2020 for both new and existing registrations, and eligible for reduced rates of VED. Drivetrain eliminates ‘range anxiety’, while engine and electric motor together offer strong acceleration.

No longer eligible for the Government low-emission car grant unless the PHEV can travel with zero emissions for more than 70 miles, and the relatively small BIK tax advantage in 2019/20 will improve from 6 April 2020. Fuel cost savings may take longer to realise than with a battery electric vehicle (BEV).

Likely to become popular again as BIK tax rules change in April 2020. Established choice for fleet operators and drivers. Much improved battery technology gives more zero emission electric mileage, with better performance available from the combination of plug-in charge and conventional fuel.

BATTERY ELECTRIC VEHICLE (BEV) Eg BMW i3

A car which carries a battery to power an electric motor that drives the wheels. It is charged by plugging it into an electricity supply.

Yes. BEVs with zero CO2 emissions qualify for the maximum grant of £3,500, subject to approval.

Drivers of cars with CO2 emissions of 0-50g/km are liable for BIK tax at 16% (20% for diesels) in 2019/20.

A new two-tier BIK tax system applies from 6 April 2020 with different rules for cars already registered at that date and new cars registered from 6 April 2020. As all BEVs are classed as zero emission, they will benefit from the 0% BIK tax rate from April 2020. Click the benefit-in-kind tax tab above for details.

BEVs are classified with zero CO2 emissions and so qualify for Transport for London’s 100% cleaner vehicle discount.

Recharging only.

Growing. There are around 16,000 UK public charging points in 10,000 locations, of which some 2,500 are rapid chargers. Tax advantages available, particularly from 6 April 2020 for new and existing registrations.

Near silent running and smooth acceleration with a near-linear torque delivery from 0mph. Much-improved battery life and fast-charging capability gives longer range at low cost. Electricity less expensive on a cost per mile basis than petrol or diesel, and EVs benefit the local environment with zero tailpipe emissions too.

Little BIK tax advantage in 2019/20, but will improve dramatically from 6 April 2020 for new and existing registrations. Longer journeys may require planning with access to rapid charging en route, and although sometimes infrequent, the charge point network is rapidly improving, especially in urban areas.

Range restrictions are becoming less of an issue with modern BEVs, and zero-rated BIK taxation from April 2020 is a major attraction. Low running costs and exemption from congestion charging, ULEZ and low emission zones. Strong performance and quiet running are other advantages.

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Page 8: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

ALTERNATIVE FUEL VEHICLE COMPARISONS (continued).

BMW Group Fleet & Business Sales

DRIVELINE

DESCRIPTION

GOVERNMENT GRANTELIGIBILITY

BIK TAX IMPLICATIONS

LONDON CONGESTION CHARGE ELIGIBILITY

REFUELLING

FUELLINGAVAILABILITY

ADVANTAGES

DISADVANTAGES

SUMMARY

ELECTRIC RANGE-EXTENDED VEHICLE (EREV) (Series Hybrid)

A vehicle driven by an electric motor, but also fitted with a small internal combustion engine which recharges the battery but does not drive the wheels.

Yes. EREVs with zero CO2 emissions qualify for the maximum grant of £3,500, subject to approval.

Drivers of cars with CO2 emissions of 0-50g/km are liable for BIK tax at 16% (20% for diesels) in 2019/20.

A new two-tier BIK tax system applies from 6 April 2020 with different rules for cars already registered at that date and new cars registered from 6 April 2020. As all EREVs are classed as zero emission, they will benefit from the 0% BIK tax rate from April 2020. Click the benefit-in-kind tax tab above for details.

EREVs are classified with zero CO2 emissions and so qualify for Transport for London’s 100% cleaner vehicle discount.

Recharging and conventional refuelling.

Widespread as range-extended electric cars can top up with fuel at a filling station or recharge using a domestic supply or the charging network.

Less ‘range anxiety’ than a pure electric car as the combustion engine is refuelled conventionally to charge the battery. EREVs already registered will benefit from the April 2020 BIK tax changes. Power delivery remains smooth from the electric motor.

Much improved battery technology in pure electric cars has made EREVs less abundant. Fuel economy when the combustion engine is running can be disappointing, extra weight can compromise handling and fuel tanks for the range extender motor often tend to be small.

With improvements in battery technology and range benefiting pure electric cars, some manufacturers have moved away from the technology. But EREVs are classed as zero emission and cars already registered will be exempt from BIK tax from April 2020 and have no range anxiety issues.

FUEL CELL ELECTRIC VEHICLE (FCEV) Eg Toyota Mirai

A vehicle fuelled by hydrogen and oxygen in a fuel cell stack which generates electricity to drive the car using an electric motor.

Yes. With water vapour the only emission, hydrogen fuel cell vehicles are classed as producing no CO2 and so qualify for the maximum grant of £3,500, subject to approval.

Drivers of cars with CO2 emissions of 0-50g/km are liable for BIK tax at 16% (20% for diesels) in 2019/20.

A new two-tier BIK tax system applies from 6 April 2020 with different rules for cars already registered at that date, and new cars registered from 6 April 2020. As all FCEVs are classed as zero emission, they will benefit from the 0% BIK tax rate from April 2020. Click the benefit-in-kind tax tab above for details.

FCEVs are classified with zero CO2 emissions and so qualify for the Transport for London 100% cleaner vehicle discount.

Hydrogen refuelling only.

Very limited. There are very few hydrogen refuelling stations at present in the UK, with most located near London, and no established network yet.

Ultra-clean operation and silence on the road. Hydrogen is potentially abundant, and refuelling takes a similar time to petrol or diesel. Performance is similar to a conventional car with a range of around 300 miles before refuelling is needed.

Expensive to buy and, at present, impractical as there is no established refuelling network in the UK. Hydrogen requires large storage tanks in the car that impact on interior space.

In its infancy as a practical mobility solution but with potential. Infrastructure is needed to make it viable, but production and current purchase costs make it prohibitively expensive for most users.

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Home. Introduction. Government grantsand incentives.

Benefit-in-kindtax.

Practicalconsiderations.

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Page 9: THE BMW GROUP GUIDE · up the battery of their battery-electric vehicle (BEV), plug-in hybrid electric vehicle (PHEV) or electric range extender electric vehicle (E-REV) at work,

ALTERNATIVE FUEL VEHICLE COMPARISONS (continued).

BMW Group Fleet & Business Sales

DRIVELINE

DESCRIPTION

GOVERNMENT GRANTELIGIBILITY

BIK TAX IMPLICATIONS

LONDON CONGESTION CHARGE ELIGIBILITY

REFUELLING

FUELLING AVAILABILITY

ADVANTAGES

DISADVANTAGES

SUMMARY

TRADITIONAL HYBRID Eg Toyota Prius (Parallel Hybrid)

A vehicle with a combination of a petrol or diesel engine and an electric motor to reduce fuel consumption and emissions.

No. Only cars with CO2 emissions of less than 50g/km and a zero emission range of at least 70 miles qualify for the grant.

Traditional hybrids have reduced CO2 emissions, but are more in line with the best-performing petrol and diesel cars for BIK tax and fuel-efficiency.

Only vehicles that meet Euro VI standards (petrol and diesel), emit no more than 75g/km of CO2 and have a minimum 20-mile zero-emission range will qualify for the 100% cleaner vehicle discount. Taxis and Private Hire Vehicles are exempt from the charge if actively licensed with London Taxi and Private hire (TPH). To find out if your car qulifies for exemption or a discount, CLICK HERE

Traditional refuelling only.

Widespread, using the existing filling station network.

Can be less expensive to buy than an electric car or plug-in hybrid. Does not require plugging in, and is refuelled like a conventional car. Some manufacturers offer traditional hybrids and the technology is now well understood after over 20 years on the market.

Electric assistance to the combustion engine makes it attractive in town and for short distances, while BIK tax can be reduced compared with conventional cars. Long-range motorway economy can be worse than for a conventionally powered non-hybrid that doesn’t carry a hybrid’s weight burden.

Traditional hybrids have been accepted as an alternative to diesel by some fleets, particularly those based in urban areas.

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