With a fuel duty rise expected in this week’s budget, a survey by Centrica finds businesses on course to move to cleaner cars and vans

This article is more than 6 months old

This article is more than 6 months old

British companies are expected to spend more than £12bn switching their fossil fuel vehicles for clean electric versions over the next two years.

A survey found that nearly half of UK businesses are planning to invest in chargeable cars and vans in advance of the government’s ban on sales of new internal combustion engine vehicles by 2035.

The Treasury is expected to accelerate the trend in this week’s budget by signalling an end to a decade of freezes on fuel duty for millions of drivers, as part of plans to meet tougher climate laws.

Sales of electric vehicles are climbing quickly but official figures show that they still accounted for only 2% of new car registrations last year.

The uptake of low-emissions driving is a key pillar of the government’s plans for cutting carbon emissions to virtually zero by 2050 to end the UK’s contribution to the climate crisis.

Cars make up slightly less than a fifth of the UK’s total carbon footprint, a proportion that has risen in recent years in part thanks to the popularity of energy-hungry SUVs.

Businesses having confidence in electric vehicles is crucial to end the UK’s contribution to climate change Rachel Maclean, transport minister

Rachel Maclean, the transport minister, said: “It is encouraging to see UK businesses investing in electric vehicles and embracing greener technology to decarbonise our transport network.

“Businesses having confidence in electric vehicles is crucial to end the UK’s contribution to climate change and improve air quality for all.”

More than a third of companies say the government’s looming ban on petrol and diesel cars has made them bring forward plans to shift to clean driving, according to a survey by the owner of British Gas. The same proportion of companies told Centrica that access to ultra-low emissions driving zones was also a factor in their decision.

Alan Barlow, managing director at Centrica’s business solutions division, said: “There is clear recognition among UK businesses of the increasingly important operational role electric vehicles can play in meeting decarbonisation goals. But concern is still widespread over how to finance this change, particularly for those with large petrol and diesel fleets.”

More than two-thirds of companies said they were discouraged from investing in electric vehicles by the cost of new cars and vans, and concerns over a spike in their energy bills.

Barlow said companies intending to switch to electric vehicles would be able to limit their bills by investing in solar panels and battery packs, or smart software that automatically charges vehicles at night, when energy prices are at their lowest.