UK-based Octopus Electric Vehicles (Octopus EV) secured a new £550 million debt securitization facility from Lloyds Bank for electrification initiatives. According to AZCleanTech, this amount essentially increased the company’s total electric vehicle funding to £1.2 billion.
New funding details
Octopus plans to utilize the new fund for its flagship electric vehicle Salary Sacrifice program.
The company offers clients an all-in-one service, including the provision of a new vehicle, charger, and discounted energy tariff.
That said, Lloyds Bank’s backing is indeed a significant support for the company’s efforts in helping drivers shift away from traditional internal combustion engine-powered vehicles.
“We’re delighted to be partnering with Lloyds to supercharge the transition, with an additional £550m to help drivers switch from old school gas guzzlers to a cleaner alternative.”
Octopus Electric Vehicles CEO
Octopus’ Salary Sacrifice program
Octopus formally launched the electric vehicle Salary Sacrifice program in April 2021. It primarily aims to aid drivers to save 30-40% every month on brand-new EVs. Apart from that, the program helps drivers save on tax as the employer leases the car and offers it as an employee benefit.
Remarkably, the company has now registered over 4,000 companies to its Salary Sacrifice program. Its partners include household British firms such as Dyson, McLaren, and Innocent Drinks.
The Salary Sacrifice program also generated over 300 new green jobs across offices in Brighton, London, Manchester, and Weybridge.
More impressively, Octopus now has more than 85 EV model options from 28 different brands. Its fleet has also topped £450m in value, FleetNews reported.
Inclusions
As mentioned, the employer leases the electric vehicle model. Meanwhile, employees pay for the car with 30-40% of their gross salary.
Apart from the EV, Octopus also provides the following inclusions under the Salary Sacrifice program:
- Free home charger for employees with off-street parking
- First 4,000 miles free via Intelligent Octopus if clients charge at home or through Electroverse credit if they don’t
- Insurance
- Servicing & maintenance
- Breakdown cover
“As more electric vehicles become available for consumers, private sector innovation plays an important role on the road to zero emission vehicles. That’s why it’s fantastic to see Octopus EV expand their flagship salary sacrifice scheme to help drivers with the upfront costs and easily make the change – with Government already committing to £2bn to support the transition to zero emission vehicles, today’s announcement shows the UK continues to make good progress on enabling people to buy the zero emission vehicles they want.”
Transport Secretary Mark Harper
Octopus’ Salary Sacrifice program is undoubtedly a smart strategy to encourage more people to switch to electric vehicles as it makes them more affordable and accessible. Given that the payment directly comes from employees’ gross pay, it also reduces their income tax and national insurance payments. With all that said, it is unsurprising that Octopus’s electric vehicle fleet continues to expand.
