Curtis Hutchinson: Preparing for the EV surge
Electric cars currently account for a tiny proportion of fleet vehicles but that is changing with improvement in affordability and infrastructure.
The race towards electrification is speeding up. With regulatory pressures rising on petrol and diesel-engined cars, fleets are increasingly assessing the business case for battery electric vehicles (BEVs).
Last year nearly two million BEVs and plug-in hybrids (PHEVs) were sold globally, with Deloitte forecasting a 950% rise by 2030 to 21 million units, with BEVs accounting for 70%.
BEVs are now the fastest-growing segment of the new car market, with the Society of Motor Manufacturers and Traders reporting 70.6% year-on-year growth in July.
Although the figures are still low, with just 14,246 units sold in the first seven months of the year, demand for BEVs is growing at a much faster rate than hybrids, still by far away the biggest selling alternatively fuelled vehicles, and are looking set to overtake plug-in hybrids, which have been in decline since the removal of the government grant.
An increasing choice of BEVs, from a growing number of brands, is helping to power the growth and extended battery ranges are making adoption more feasible for more users. The removal of Benefit-in-Kind tax for zero-emission vehicles in the 2020/2021 tax year will also help boost adoption amongst some user-choosers.
The main sticking point appears to be the perceived paucity of recharging points. Yet, research by Nissan indicates there are now almost 1,000 more public places to charge EVs than there are fuel stations in the UK – 9,300 EV charging locations compared to 8,400 fuel stations. Furthermore, almost all UK motorway service stations now have charging points, the majority with a rapid charge option.
BP Chargemaster, the UK’s biggest recharging network provider with over 6,500 public charge points, estimates the market for BEVs will grow from around 200,000 currently on our roads to over six million in 10 years’ time. To help facilitate this growth it has commenced the roll-out of the first of 400 ultra-fast rechargers on BP forecourts, a move which could prove to be a gamechanger, with users able to recharge over a leisurely coffee break.
However, a new survey from Venson Automotive Solutions, the fleet management specialist, has shown the message is not getting through to all company car drivers, with 69% expressing concern over the recharging infrastructure.
The survey also showed range anxiety is still an issue, with 57% of drivers saying it was a barrier to consideration, despite most new BEVs now capable of clocking 100 miles and some models (including the Audi E-Tron and Tesla Model 3) good for over 200 miles.
“With charging and battery range concerns abated, BEV fleets should now be far more appealing to businesses,” says Alison Bell, marketing director at Venson Automotive Solutions.
LeasePlan has been vocal in its support of BEV adoption but recognises that hurdles still need to be jumped. For businesses of any size, one of the biggest conundrums is reconciling policies aimed at reducing their carbon footprint with the higher upfront costs of BEVs. However, Matthew Walters, head of consultancy and customer data services at LeasePlan UK, suggests they consider the bigger picture.
“BEVs are still more expensive to purchase than traditionally fuelled vehicles but it’s important to factor in the longer-term savings that BEVs offer, rather than taking the vehicle cost at face value.
“If you’re considering going electric, make sure to research the government subsidies that are available to buyers. Your business could be able to receive up to £8,000 off the purchase price of an eligible electric van and £3,500 off an eligible electric car,” he says.
The total cost of running a BEV can also help tip the balance for businesses.
“In terms of fuel savings, on average, £2-£4 in electricity costs provides the same range as £13-£16 of petrol but BEVs don’t just save businesses from mounting fuel costs, they can provide vast savings in indirect costs such as tax, servicing and MOTs.
“Over five years, just one electric car can save over £6,000 in vehicle tax and fuel. Additionally, as BEVs have fewer parts, theoretically they should be more reliable and not require as many expensive trips to the mechanic.”
With the business case for electrification becoming increasingly compelling, Walters suggests small measured steps can achieve buy-in.
“If BEVs are the future of your fleet, start internally and provide them to senior managers as well as including BEVs in your car policy. You could even consider switching your shared vehicles to ease your drivers into the change.”
Over five years, just one electric car can save over £6,000 in vehicle tax and fuel.