Thought Leadership

Electrifying your customers

Charles Maddren from Great American Lease & Loan Insurance Services looks at solutions for the asset finance sector as carbon emission targets drive opportunities for electric vehicle and construction project funders.

With the COP26 Climate Summit taking place in Glasgow this month, there is renewed urgency for the transition towards a carbon neutral world. 

The UK government has set stretching targets for reducing emissions by 2030 to align with net zero, with Prime Minister Boris Johnson claiming “The UK will be home to pioneering businesses, new technologies and green innovation as we make progress to net zero emissions”1.

Christine Lagarde, President of the European Central Bank, has acknowledged that “Substantial investment is likely to be required to underpin the energy transition. Meeting that challenge requires contributions from both the public and private sector” 2.

Like many other sectors of the economy, the finance and leasing industry is treating environmental change as a serious issue. The boom in emerging technologies and construction of underlying infrastructure required to support these, opens up great opportunities for our sector.

Electric Vehicles

One area that offers enormous potential for vehicle funders is the rapidly growing number of electric vehicles (EVs). Global sales of EVs rose dramatically in the first half of 2021, leading to an expected 6.4 million EVs on the road in 2021, a growth of 98% over 2020, according to ev-volumes.com3.

The uptake in EVs is the result of a carrot and stick approach. A fast-expanding range of vehicles and radically improved battery technology, making range anxiety a thing of the past, is driving customer interest. On the other hand the effect of the 95g CO2 mandate is encouraging manufacturers to speed up their transition to electric. Jaguar for example plans to sell only electric cars from 2025, and Volvo from 2030. Others are following suit. Add to this the UK government’s dramatically reduced Benefit in Kind tax rate of just 1 or 2%, compared to as much a 37% payable on petrol or diesel vehicles, and it’s easy to see why EV adoption is taking off.

The future of aviation is strictly tied to several factors

Salary Sacrifice

One big lever encouraging the transition to EVs in the UK and some European countries is the salary sacrifice initiative. An EV salary sacrifice scheme lets an employee pay for an electric car via monthly deductions from their gross salary – that is before tax and other contributions are deducted.

The future of aviation is strictly tied to several factors

Benefits of electric car salary sacrifice

There are some great advantages to electric car salary sacrifice. Employees can access a new electric car which could otherwise be unaffordable, thanks to savings on income tax and National Insurance contributions. In addition, they will see savings on fuel costs, take advantage of low Benefit in Kind rates compared to petrol and diesel cars, and can feel good about their substantially lower carbon footprint. 

At the same time there are significant benefits for employers, who are able to offer an enhanced benefits package to their staff, improving employee recruitment and retention, as well as making savings on Class 1A National Insurance contributions. This solution also boosts their Corporate Social Responsibility credentials and supports employees who want to go green.

Risks to the employer

Whilst there are many benefits to pursuing a salary sacrifice programme, it is not without risk to the employer. Under a salary sacrifice scheme, it is the employer who signs the lease agreement, and will have to pay any early termination charges in a range of circumstances including the employee’s resignation, maternity or paternity leave, accident or sickness, loss of driving licence on medical grounds, expatriation to a company office in another country, and the like.

The future of aviation is strictly tied to several factors

The Solution

Great American’s Early Termination Insurance covers early termination charges caused by these circumstances, de-risking salary sacrifice for employers.  Working with the leasing company or broker we create a bespoke coverage responding to the needs of their client, the employer.

Infrastructure funding

The revolution in newly emerging technologies will require the development of a substantial infrastructure to support it. Whether that’s the installation of electric vehicle charging units or the building of the forecourts and motorway service stations of the future, there will be infrastructure related risks which can be protected by using Great American’s Funder Led/Owner Controlled Single Project Construction Insurance product. Great American is able to structure contract works coverage as well as insurance for Contractors’ Plant & Equipment for funder led construction projects of all sizes, through its Construction & Engineering team, and available through GREATpolicy, its online portal for insurance brokers and MGAs.

The future of aviation is strictly tied to several factors

Support and long-term relationships for lessors

The experienced underwriting teams at Great American bring a wealth of specialised industry knowledge to support vehicle, equipment and construction funders, building long term relationships which deliver the right solutions for you and your clients.


  2. According to the European Commission, achieving the Paris Agreement targets requires up to €260 billion of additional investment per year. Source: Speech by Christine Lagarde, President of the ECB, at the launch of the COP 26 Private Finance Agenda
  3. Source: Global EV Sales for 2021 H1 by Roalnd Irle, EV-Volumes:

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