The latent demand for electric company cars is frankly massive, especially with the current 0% Benefit-in-Kind (BIK) tax rate in place, but there’s always been something stopping the market from taking off. But now the Tesla Model 3 might be heralding the change we all want to see and bringing electric vehicles (EVs) into the mainstream.

BIK rates have been getting steadily higher over the last ten years but electric cars have a 0% banding at present (meaning the employee pays nothing in tax), making them a very attractive choice. Compare this with an average BMW 3 Series (we'll use a BMW 320d SE Auto Saloon as a comparison). This is going to cost the employee £4,360 in tax per year in 2020/21.  That's a BIG difference.

But any car has to meet at least three criteria to really make a mark in the company car market. It’s got to be affordable for the employer, it has to be practical for the user, and it’s got to look the part.

And if you last considered EVs a year or more ago you might have concluded there was nothing that fitted the bill. The really desirable ones like the Tesla Model S and the Jaguar I-Pace are just too expensive for anyone outside the boardroom, but the rest just don’t have that ‘executive’ feel you get with a BMW or an Audi – think of the Renault Zoe or Nissan Leaf*.

But the Tesla Model 3 is changing everything and if you haven’t looked into it yet, now’s the time to do it. Across Europe in 2019 the Model 3 racked-up 22,000 sales. Its closest electric rival, the Renault Zoe, achieved less than 5,000. So what’s the Model 3 got that the others haven’t?

For the UK Company Car market, that’s pretty straightforward.

      -->  A decent range between charges
      -->  Fast charging
      -->  A desirable badge
      -->  Thousands saved on BIK
      -->  The right price-point
      -->  And the kudos of driving electric

And there’s no doubt who Tesla are going after with the Model 3 – it’s the BMW 3 Series. They even share the same name!  They are still a little more expensive than the starting price of a 3 Series with the Tesla Model 3 starting at £42,000 against £32,000 for the diesel 3 Series SE. But if you can afford to upgrade from BMW’s base-specification SE model, or you want to add lots of options, then you can easily add £10k to the price without really thinking about it.

It’s a similar story for lease costs. You can probably pick up a business lease on 3 Series SE for around £400 per month (3 years, 15k miles pa), with the Tesla Model 3 coming in at around £100 more, at about £500.

But it’s when you start accounting for the fuel that it all starts to make sense. Because if you’re driving 15,000 miles per year then this is costing upwards of £130 per month in the BMW. The Tesla, if you charge at home, is probably no more than £30.

So that £100 difference in lease costs is totally wiped out in fuel savings. And then of course there’s the BIK savings for the employee – a whopping £4,360 per year.

That’s cost dealt with, but what about range anxiety?

Tesla say the Model 3 can achieve 348 miles between charges, which might translate into a more realistic 300 miles in the real world, and if you’re on a long journey you can get an 80% charge on the motorway after about 30 minutes charge-time.

So it might be that 2020 is the year of the electric company car. Expect the German rivals to react swiftly and competitively with their own junior-executive models in the not-too-distant future but even with just the Model 3 holding the fort, it’s time you looked again at electric company cars.