What was the breakthrough moment?
I found a little-known HMRC-approved scheme where people could access electric vehicles through their employer and make quite extraordinary savings. I was like, ‘Wow! How did I not know about this?’ I thought this has got to be a business we can build and scale pretty quickly.
I think people often think going green must mean a major lifestyle change, or major compromises –but the cars are incredible and through the scheme, they’re really affordable.
How does the HMRC scheme make electric cars so much more affordable?
I was reading a Tesla brochure and saw the small print about salary sacrifice. My experience with salary sacrifice was either pensions or cycle-to-work schemes and I thought, ‘Surely not’. But I did more digging and realised it was possible to access an electric vehicle through your company.
HMRC reduced the benefit-in-kind tax for electric vehicles to0 per cent in April 2020, so you could halve the monthly cost of getting an electric vehicle. Effectively, you sacrifice a small proportion of your salary in return for the car, and make income tax and National Insurance savings on the salary you sacrifice too.
The other benefit is that your business takes on the lease and pays the underlying rate plus VAT. The business can then recoverthe VAT and pass on the VAT saving to employees. It’s a triple saving –VAT, income tax and National Insurance. That’s the headline proposition: that you can halve the cost of motoring.
Did you think it was too good to be true?
Yes! I spent ages double-checking, speaking to tax advisers, accountants, lawyers, going through it in detail.
We all had other things on our mind in April 2020 with the pandemic, and I don’t think everyone’s primary concern was, ‘I wonder if we can get an electric vehicle’. HR departments were thinking about remote working and keeping the ship afloat. It just wasn’t wasn’t top of anyone’s mind.
We would have launched earlier, but the industry basically crashed for a year; no-one was buying vehicles. Now there’s a buoyant market due to pent-up demand and we’re seeing a much bigger share of electric vehicles.
Has that sense of environmental responsibility survived the pandemic?
Yes, everyone is more conscious about their consumption. Businesses are definitely turning their attention to what they can do to reduce their carbon footprint. And consumers see advertising for electric vehicles everywhere. The ecosystem is maturing, you see lots of Tesla Model 3s on the road now. That’s a very recent phenomenon.
There’s a sense of normalisation – that people like you, your friends, family members or work colleagues can get an electric vehicle. The quality of cars on offer is so much stronger. I think there’s at least ten models that have a range of over 300 miles. The average driver does about 142 miles a week, so basically you need to charge your car twice a month.
The big concern people have is range anxiety, so for most trips people make, it’s not a concern. Of course, there’s more planning needed for longer trips, but it’s eminently doable and you don’t need to have a home charging point; they are obviously great, but not essential.
What about the social purpose of the business, like subsidising EVs for charities and social enterprises?
When we launched, we asked what kind of business we wanted to build. Businesses can, and should, be a force for good. We want everyone – employees, customers, suppliers – to have a great experience and think we’re a great company to deal with.
One of those ways of walking the talk is by becoming a B Corp, asking an external auditor to come in every year to do a thorough appraisal of the business. They score us, publish that score, and we can’t do anything to influence that. But the beauty of that is accountability. We did it because we just thought this is a great way of formalising what we want to do and building trust.
We want to provide the right tools, advice, and service for people to make the right decision for them. So, we thought the best way of doing that is to say, ‘This is what an independent auditor said about our business – and this is where we need to improve.’
In terms of the charity piece, we pledged to give away 10 per cent of our profits. That might involve things like subsidising electric vehicles for charities because we think they might otherwise struggle to make the transition.
We also want to support causes like Asthma UK’s clean air campaign. We didn’t realise air pollution is a health emergency and a trigger for fatal asthma attacks. That’s a lovely fit with what we’re doing, and when people take out their electric vehicle, they will feel better about their drive because they know they’re not contributing to air pollution.
How will loveelectric stay ahead of the game?
First, it’s super important to be in a niche, and dedicate your time and energy to providing a great solution to that niche. Our niche is salary sacrifice programmes for employers, and we’re looking primarily at SMEs with 50-500 staff; that’s our sweet spot. It’s an underserved market.
There are tons of car leasing brokers, but hardly any doing what we do. Some offer it as a bolt-on service to standard leasing, but don’t necessarily have in-house tech, so they’re quite limited in providing agile solutions. We built from the ground up and believe we deliver the best service in the market for this niche – and this small niche can deliver big revenues.
What are the big trends that are supporting your business?
The switch to electric comes into full force by 2030, so we’re ahead of the game. The second thing is the big shift from people purchasing cars in physical locations to online. It’s one of the last industries to go digital. We’d like to challenge the likes of Autotrader and carwow, the established digital marketplaces, by building a trusted brand.
What kind of business sectors are embracing what you’re doing?
The strongest demand is from the premium end of the market – Tesla, Polestar, Porsche, Jaguar – and tends to be from directors of SMEs.
It’s fairly industry-agnostic. We’re finding a lot of inquiries from professional services consultancies, advertising and digital marketing agencies, but it’s a broad church. We’re seeing most demand from higher earners, who are going to make the biggest savings on what would otherwise be really expensive cars. The savings are extraordinary, and that price proposition is so attractive.
Are you looking at other areas where you can apply this business model?
Where we see the opportunity longer term is providing a full mobility solution. So, not just electric cars but the full suite of electric vehicles, whether that’s electric bikes or scooters – providing a range of choices via one consolidated platform. That’s something we will be exploring in maybe 18 months’ time.
How do you reflect on your time at Money Dashboard and how are you finding being a non-exec director rather than chief executive?
I look back with great pride at what the team achieved because the business was a pioneer in open banking. We were basically asking people to trust us with their online banking credentials, to log in and scrape their data against the wishes of their bank. It was a bold thing to do but we had the view that it was the customer’s data and if they wanted the data in another application, why shouldn’t they be able to do that?
Thankfully, the regulators agreed with that viewpoint, and that led to the creation of open banking – but what we underestimated was just how slow and time-consuming the transition would be. Against that market landscape, what the team achieved against much better-funded competitors was incredible.
In terms of moving into the non-exec role, it’s been great to step back and provide some support to the exec team, share some experience from the past and take on more of a coaching role.
This article first appeared in the October 2021 edition of The Scotsman’s Fintech Focus supplement. A digital version can be viewed here.