Octopus aiming to shake up the salary sacrifice market

Octopus Electric Vehicles is promising to shake up the salary sacrifice market with the launch of its new electric car leasing service, Electric Dreams.

So far, 15 companies are already live on the Electric Dreams scheme, including Huel and Purplebricks, making it available to 1,491 employees across the UK. 

Interest is reportedly high, although the number of cars currently funded is still low – about 30 – with the scheme having only just launched.

However, Fiona Howarth, chief executive officer at Octopus Electric Vehicles, believes it can bring something new to the market.

She told Fleet News: “We want to make a big difference and we want to help a lot of people get into electric cars. If we’re not doing it in high volumes, we’re not doing it right.”

There is no risk fleet target for the fledgling business, but Howarth would expect to be knocking on the door of the FN50, with 500-plus cars being funded, within the next couple of years.

The company, which launched in 2018, has been acting as a broker for several leasing companies, allowing it to bundle other services the wider business offered, such as energy and charging infrastructure.

It originally launched its Go Green Car scheme, in May 2020, a salary sacrifice product provided through LeasePlan. However, being a broker was making it difficult for Octopus to really develop its offering further, according to Howarth.

“I feel we can bring something new to the market by challenging some of the existing models and the way things have traditionally been done,” she said.

“My ambition is to make it as easy as possible for individuals and businesses to make that switch to electric.”

In order to do that, she says it is important to understand where those “pain points” are for customers and then to find solutions for them.

“The obvious one is just having dedicated experts that understand the vehicles and know about charging,” explained Howarth.

That helped shaped its initial offering to customers but, as Octopus’s understanding of the market developed, Howarth recognised that funding methods, such as salary sacrifice, were “not straightforward”.

“They’re relatively challenging for some businesses to deliver and that complexity comes from there being two levels of service,” she said.

“You’ve got the B2B (business-to-business) part and then the employee themselves, and what we found was providers were taking a tech approach to it.”

For Howarth, there was not the level of customer focus, which she says is part of the DNA at Octopus.

Octopus Energy has more than 50,000 Trust Pilot reviews with a score of 4.8 out of five. “It’s phenomenally high,” said Howarth.

“Cars are complicated, and leasing is not straightforward. We found it challenging to bring that Octopus side into the leasing company when we’ve been partnering with other organisations.”

The move away from broker to leasing company, Howarth explains, will allow Octopus to control the whole process. Partners including Close Brothers and Lloyd Latchford will provide financing and insurance services respectively.

Electric Dreams is being made available to all businesses, but particularly those with fewer than 1,000 employees which may struggle to access similar schemes.

Octopus Electric Vehicles will continue to offer business contract hire leasing packages as a broker.

Howarth concluded: “We are thrilled to see so many customers offering our service to their employees already and the signs are that many more will sign-up in 2021.”