EVs: a tough sell?
With petrol and diesel prices seemingly hitting all time record highs on a monthly basis some fleets are seriously considering electric vehicles as an alternative for certain users.
It might still be early days for EVs, but as choice and availability from the mainstream players – notably Nissan, Renault and Peugeot – improves, it might be time to consider when a plug-in can become a cost effective fleet option for both your business and your staff.
Clearly EVs, in their current guise, will not suit everyone. They are expensive to acquire, have a sub-100 mile range and the recharging infrastructure is in its infancy. Furthermore, thanks to the recent Budget, drivers will face a 15% BiK charge for EVs from April 2015 even if vehicles are sourced before this date; a short sighted ruling every bit as perplexing as VAT on hot pasties.
While some of the big utility companies and local authorities are among the early adopters, having spotted short-hop niches for EVs, which also tick their environmental responsibility boxes, where does this leave the SME fleet?
For EVs to gain traction in the UK dealers need to be talking to their fleet customers.
Gearing up to sell and service EVs does require a level of investment from dealers and many believe fleets will be the best market to initially target, Neville Briggs, managing director at Pinewood told me.
Some manufacturers are thinking small and local rather than big and national when it comes to establishing an EV market. Nissan in particular is preparing its dealer network for UK production of the LEAF from next year. This will mean better
availability and cheaper specification levels. Jim Wright, Nissan’s UK managing director, reckoned his dealers are being encouraged to talk to their local fleet customers not necessarily about the green benefits, but the potential wholelife cost savings, they can achieve through going electric.
Central to this wholelife cost argument for EVs is not just the price of electricity but the low cost of servicing and maintenance.
Independent fleet consultant Professor Colin Tourick agrees that dealers have a key role to play in showing the tangible benefits of EVs and need to ask fleet managers how individual vehicles will be used to ascertain their suitability.
‘Dealers have an essential role in getting the first generation of EVs onto the road. Whilst most drivers like the flexibility of being able to take their car on a long trip, the fact is that most cars drive less than 80 miles a day. Dealers need to help their customers identify those low-mileage vehicles that could be swapped for EVs, particularly those operating in city centres that have congestion charging and where vehicle charging points are available,’ he said.
Tourick argues that dealers have a consultative role to play to help fleets calculate where it is economically viable to change to an EV or stick with something more traditional.
‘Some EVs are incredibly expensive, even after the Government subsidy, but they are becoming less expensive and the economic case against EVs will soon be much less clear cut,’ he said.
Curiously though, it may be a human factor which determines the desirability of EVs.
‘Currently, a major impetus for offering this kind of vehicle on a fleet choice list is that they allow driver taxation to be minimised, but rating all vehicles below 95g/km at a standard rate of 15% removes that incentive to a large degree,’ argues Gary Killeen, fleet services commercial leader at GE Capital UK.
No matter how good a dealer's fleet proposition is there is still a sizeable stumbling block; company car drivers facing a BIK liability on something which is currently exempt. Now that is a tough sell.