With all the hype in the press this week about the UK’s commitment to become net CO2 neutral by 2050 I have started thinking forward to how the future will look and what I can do as an individual to contribute towards the nations goal. A great opportunity is presented by the launch of the Tesla Model 3 which will be available from 1st July 2019 onwards. It combines reasonable price with great range and fantastic performance.
Tesla Model 3
The range of the new Model 3 is 329 miles and there is already talk of a 400 mile range version by 2020, the Model 3’s speed is amazing with a top speed of 162mph and an amazing 0-60 time of 3.2seconds for the performance model.
The Model 3 launched in the US in 2016 as the affordable alternative to the Model S, with prices having dropped to make it the most affordable Tesla.
A four-door sedan, the Model 3 launched with a range of options, but that’s been refined to just three that are currently available. Ranges are based on combined figures. Autopilot is standard, but the full self-driving upgrade is $10,000/£6,800.
Benefit in Kind and electric cars from 2020/21
Also the Government has made a very helpful change to the Benefit in Kind rules so from 2020/21 tax year the BIK on a Tesla is only 2%. Based on a list price of £48.590 for the top end model that with a few extras, this all points to a likely tax charge of around £1,000 or £200 at 20% and £400 at 40%. This is a fanastic opportunity for the tax conscious amongst us, as you not only get tax relief for the purchase price of the car with capital allowances claimed by your employer or business, but insurance, servicing and electric usage can all be claimed through your business as well. There is no fuel benefit as electricity is not classed as a road fuel!
Therefore this is a great opportunity not to be missed to shift personal expenses into your business, gain tax relief for the purchase of a personal car and to help the environment all at the same time.
I can see that sales of the Test Model 3 in the UK will go well and business users will find this option very popular particular as at the current time it is so attractive from a personal tax benefit in kind point of view.
Driving a lot of miles
The fact that I drive a lot of miles each week as a Portfolio FD has put me off buying an electric car up and until now, but with the range now increasing to closer to 300 miles per charge and the fact that motorway services increasingly have charging infratstructure in place, this makes the whole option attractive and worthwhile. Few journeys are out of range given that I would normally take a break of 30 minutes anyway with a journey over two hours, and 30 mins is significant as that is enough to charge up for another 170 miles of range.
I am also keen to have a Tesla Powerwall at home together with solar panels so I can move along and help the country become carbon neutral, as can be seen there is nothing more helpful as a tax incentive that appeals to us accountants and gives us that extra nudge we all need to help the environment. The powerwall draws economy 7 electricty at night when it is cheaper and uses it to avoid using peak time electricity which is much more expensive, and if you have solar panels also the energy to at least partially charge you car can be free.
Other Tesla models
Tesla’s Model X is the “soccer mom’s” answer to the electric car. It’s an SUV-style EV capable of seating seven people, but owes a lot of its design to the Model S, especially with that interior display.
It uniquely features rear Falcon Wing doors (think the Delorean in Back to the Future) that, along with the huge touchscreen inside, will make all your kids think you bought a car from the future. There are two models, but three different seating configurations – you can choose 5 (included), 6 ($6,500 extra), or 7 ($3,500 extra). Autopilot is included, the full self-driving upgrade option is $10,000/£6,800.
The Model S is very much an executive saloon, with similar long and low design lines as you might find on a Jaguar.
The Model S originally launched in 2012 and helped to put Tesla on the map as an automaker. Tesla has continued updating the Model S since its release, and the most recent model has a trio of versions: Long Range Plus; Plaid; and Plaid+. The Standard and Performance models were recently dropped.
While some earlier editions of the Model S offered rear-wheel drive, all the latest Model S operate in all-wheel drive (AWD). There was once a “Ludicrous mode” option for insane acceleration, but the terminology has been dropped – instead the Plaid+ offers sub-1.9s 0-62mph – with both Plaid-named models offering tri-motor propulsion (over the Long Range’s dual-motor).
All models offer Autopilot as standard – which brings a range of driver assistance – but there’s the option for the full self-driving upgrade at $10,000 (£6,800), which adds navigation to Autopilot, self-parking, Smart Summon, traffic light recognition and automatic city street driving (you’ll still need to be in control of the car at all times). Forthcoming for 2021 is automatic driving on city streets and Enhanced Summon – where your parked car will come find you in a car park.
Encouraging corporate fleets to switch to electric is a way we can save our clients tax bills and also do our bit to help reduce CO2 emissions. Increasingly electricity is being generated from renewable sources which the means that we are reducing our national reliance on fossil fuels.
Looking to the future I can see more incentives being required to get our vehicles changed over to electric power, but I also think its likely that the legislation to require all new car sales to only be of electric vehicles will also be brought forward and all new vehicle sales will then have to be electric, I suspect this date will be 2030 but we’ll see on that.
Its great that Telsa is leading the market on this change and I think it will not be long before we see all main manufactures following their leadership. On the electricity generation side, more and more energy is being generated by offshore wind and to a lesser degree solar power. Also coal fired power stations continue to close down such as the one near me in Ironbridge Telford. So step by step we are making the transition that is necessary to move away from fossil fuel.
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