Comment: The future’s green: fleet electrification opportunity post-COVID-19
Lauren Pamma, electrification propositions lead at Lex Autolease, discusses the role electric vehicles can play in businesses’ green recovery plans, and the advantages they offer for fleets.
COVID-19 brought much of the world to a standstill. As factories, schools, offices and shops closed their doors, people in the UK were urged to avoid all non-essential travel, which saw air pollution levels drop significantly.
As restrictions on movement are eased and things start to move back to a new normal, now is the perfect time for businesses to review their fleet policies.
Not only can we continue to enjoy the clean air that’s been a noticeable silver lining of lockdown; a green recovery can deliver real cost savings for businesses too.
A line in the sand post-coronavirus
The government has made clear its intention to ‘build back, better’ following the impact of the coronavirus outbreak. As part of this, there is a clear opportunity to accelerate the progress that’s already been made in terms of cleaning up our roads.
To go back to business as usual would be a missed opportunity, and somewhat short-sighted, given how much the world has changed in recent months.
While social distancing measures are in place, the use of public transport is currently being discouraged in favour of private, sustainable alternatives. For those who can’t walk or cycle to wherever they need to be, an EV is the next logical consideration, especially as drivers can ‘refuel’ at home, without needing to interact with others at the petrol pump.
At the same time, with people likely to cover fewer miles as there is a shift to more flexible working patterns, EVs could become more practical, for more people. Under these circumstances, the often-cited barriers to adoption around range anxiety and access to charging infrastructure will become less of an issue.
The business case for EVs
It’s been encouraging to see that during lockdown our fleet customers have been looking at their policies to identify how and where EVs can be introduced, now and as part of their long-term strategy.
We know that improving cashflow is an immediate concern for many businesses in these challenging times, to which making fleet investments might seem contradictory, but EVs can be a money saver in the long run.
While the upfront cost of an EV can be higher than a petrol or diesel alternative, fleet managers need to take into consideration the whole life cost saving – fuel and Vehicle Excise Duty (VED) savings will be realised from day one.
As well as lower fuel and National Insurance costs that save money from an employer’s perspective, EVs come with a whole host of in-life benefits such as unrestricted access to low-emission zones and low Benefit-in-Kind – currently zero percent for 2020/21 tax year.
Start small, rather than not at all
The key thing to remember is that there is no ‘one size fits all’ approach to fuel types anymore. If you wait until your whole fleet is ready to move into EVs, you might be waiting a long time and you risk missing out on the benefits of starting sooner.
While EVs are fast becoming viable for most drivers, the technology is still relatively new and it’s worth building advocacy in your driver population. That’s why we suggest starting the transition with lower mileage users operating in and around urban areas – whose existing usage patterns will be hardly affected (if at all) by moving into an EV.
They can then help increase awareness and understanding amongst other drivers and support the business case for further investment.
A favourable environment for EV adoption
The direction of travel on EVs in this country is clear – we were the first major economy to set our net zero emissions target in law, pledging to eradicate our net contribution to climate change by 2050.
With this in mind, the UK needs to ensure it’s an appealing market for manufacturers in order to secure product supply, which goes hand-in-hand with incentivising uptake on a mass-market scale.
Fleets have always played a key role as the pioneers of new technologies, and with relatively short, regular replacement cycles, they also feed the second-hand market with more environmentally-friendly models.
We need to see continued support for the initiatives that are already in place to incentivise EV adoption. This means maintaining five-year visibility of Benefit-in-Kind tables, the continuation of plug-in grants and EV’s continued exemption from the VED surcharge.
At the same time, charging infrastructure investment must continue, at scale – which can also feed into the government’s ambition to create new, green jobs in the wake of the pandemic.
The UK’s EV market is still in its infancy and can be easily disrupted. We have an opportunity to use the challenges we’ve faced this year as a force for good, as long as fleets, leasing providers and policy makers work together and seize this moment on the Road to Zero.