Tesla vehicles will be 42% cheaper for businesses and their employees with UK’s new tax rule, which will be active by April 2020. The new law refers to the UK’s Benefit-in-Kind (BIK) tax. According to the EV automaker, the UK’s BIK tax used to charge 16% for each company car that was a Tesla.
In 2019, the national UK Treasury exempted all zero-emission company vehicles from the BIK tax for the entire year. By April of this year, all Tesla cars will be charged 0% BIK rate. The reformed BIK tax rate makes company cars more affordable for both employees and the employers, provided that the vehicles are battery electric vehicles (BEVs) and highly-efficient plug-in hybrid electric vehicles (PHEVs).
As a BEV, Tesla stands to become one of the car manufacturers that will benefit from the new BIK Tax. According to Redditor u/LordAnubis12, a Tesla Model 3 would only cost £307 ($396.98) a month with a 48-month contract. In comparison, Tesla Model 3’s before the reformed BIK tax cost £530 ($685.34).
Change in UK's tax rule make Teslas 42% Cheaper for businesses - And all EVs far cheape from r/electricvehicles
With those numbers in mind, the new BIK rate makes Tesla company vehicles at least 42% cheaper from their old prices. Price parity for Tesla vehicles and maybe even all-electric vehicles in the UK would either be close or achieved.
Tesla has been dubbed the leader of the new EV revolution. Since Tesla stands at the forefront of the new EV wave, demand for its cars could dramatically increase after the new BIK tax rule change takes effect in April.
The CEO of Elmtronics and EV expert, Dan Martin, shared his thoughts on the UK’s BIK tax with Express: “The April 2020 car tax changes have been a welcome relief to company motorists with planned changes of zero percent Benefit in Kind payment for company car drivers with electric vehicles from the 5th of April, with an increase to just 1 percent from April 2021,” he said.
“Attitudes toward electric vehicles are changing fast. I’m confident we will see a renaissance of drivers reverting [back] to company cars to take advantage of the tax breaks, which will undoubtedly help with the overall country’s move toward electric mobility,” Martin explained further.
Martin has a valid point. The new BIK tax incentivizes the adoption of BEVs in the UK and infrastructure to support the burgeoning car market, too. This is also a win for Tesla and its resilient and determined CEO Elon Musk, who has always said the company’s goal was to bring about the advent of mainstream electric vehicles. Tesla’s mission from the very beginning was to push sustainable new-energy through the global auto industry, a sector that is one of the most significant contributors to CO2 emissions on Earth.
Featured Image Credit: TeslaFollow @PurplePanda88