There’s no getting away from the shift to electric vehicles. Ian Richardson, managing director, 360 Media Group, assesses the landscape and offers some advice on how to make the transition as painless as possible

Fleet attitudes to electric cars have changed in the last 12 months and traditional barriers are diminishing

With 2030 now a deadline for the end of the sale of petrol and diesel cars, the transition to electric cars is on the brink of rapid acceleration. There were 190,000 battery electric cars across the country last year, accounting for about 11.6% of total sales. A number of the UK’s largest fleets have already made commitments on sustainability grounds to electrify their vehicles by 2030, if not earlier, but now every fleet decision-maker knows that the switch to plug-in cars is no more than two replacement cycles away.

The pace of transition is set to increase exponentially, with the battery electric vehicle market forecasted to comprise of around 25% of total new car sales by 2025 in the UK.

EV acceptance

Fleet attitudes to electric cars have changed in the last 12 months. Traditional barriers, such as range and a limited public charge point network, are diminishing as issues, leaving acquisition cost as the principal obstacle to wider adoption. Corporate social responsibility is now the main reason for adopting electric vehicles.

With 74% of car fleets having an average annual mileage of between 5,000 to 15,000 miles – and just 49% conducting journeys exceeding one hundred miles – the range capabilities of most electric cars, meet the needs of most fleets.

In the face of Covid-19’s squeeze on the economy, fleets face apparently conflicting objectives for the next 12 months: with 58% planning to cut costs and reduce emissions with around half of fleets having a formal emissions reduction target in place.

With 70% of fleets planning to invest in electric cars during 2022, and 68% of fleets expecting to order electric vans, the direction of travel is clear.

Interestingly the intent to order PHEVs has dipped to just 43% for 2022, down from 69% last year. Cost savings lie at the heart of fleet PHEV adoption plans, so it is vital for fleets to impose charging discipline that ensures drivers plug in their cars. Fuel card and anecdotal evidence indicates that many drivers fail to plug in their PHEVs, given the cars’ limited ranges.

The fleet supply chain

The shift to electrification is placing demands on leasing companies to be flexible. Fleets are undecided on future contract lengths; with electric vehicles deemed to be capable to run on longer cycles due to less moving parts increasing reliability, coupled with low maintenance costs making five-year terms viable. However, 47% of fleets currently lease their company cars for just three years and, with the recent trend of perk car drivers migrating to cash allowance, a jump from three to five years is a risk.

Conversely 59% of fleets expect cash allowance takers to opt back into the company car scheme due to the benefits of electric vehicles.

As a result, fleets expect their leasing company to work in tandem with them on their electrification journey and there are three services required by fleets: funding for charging hardware; increased administrative support and flexible terms, and the ability to switch vehicles.

Expectations are high and, with admin and advice at the top of the priority list, fleets are seeking expert advice and consultancy on the transition to EVs. With just 40% of fleets expecting to make electric vehicles available to all employees eligible for a company car, fleets would value support in producing an EV readiness report to identify drivers ready to switch to EVs and require access to accurate data to fulfil emissions and carbon reporting as they are becoming more prevalent.

With the Electric Vehicle Homecharge Scheme changing on 31 March, over 50% of fleets would like the cost of the domestic charger bundled into the monthly rental payment. There are other services that fleets are interested in to aid the transition to electric vehicles, with 74% of fleets receptive to EV charging payment reimbursement solutions.

However, as the transition to electric gathers pace, 55% of lease fleets warn that they are ready to seek a new provider to find the services they want.

Setting out a fleet policy

A successful EV policy involves placing the right person in the right vehicle at the right time. Drivers (and their managers, if necessary) should sign the policy to acknowledge that they are aware of the range limits of the EV they intend to order. Another key element is to make is a decision on how much to reimburse EV drivers for business miles. In most instances, HMRC’s official AER rate of 5p per mile no longer covers the actual cost of electricity, even for drivers with home chargers who can take advantage of low-cost domestic energy tariffs.

70% of fleets are planning to invest in EVs during 2022

Source: EV Index, 360 Media Group

In particular, the official rate underestimates the true energy cost for electric vans. Specialist fuel management companies, such as TMC, can help fleets establish a fair and accurate mileage reimbursement policy, based on the actual cost of the charging used.

Another part of the policy should be around charging. Key points to consider here are whether or not to allow drivers to plug-in their cars at high-cost, ultra-fast motorway chargers. Other considerations are around charging PHEVs and who pays for workplace charging.

An EV Fleet Policy document from 360mediagroupltd.com might be useful.

EV homework

The speed of evolution in EV adoption makes it challenging for fleets to top-up their knowledge, but accessing learnings from early EV adopters makes it possible to act quickly.

TCO is the primary driver for adopting electric vehicles among many fleets, however, just 21% are confident in achieving cost savings on BEVs vs. ICE cars.
Some 39% of fleets are extremely confident in their knowledge of electric vehicles, however, recent feedback shows that dealers are not explaining the detail of the electric car in relation to charging times, battery type and range (or range optimisation).

Fleets were asked to rate their knowledge on EV charging infrastructure, with the overall score just 6/10. This is likely to be a barrier as the market shifts from early adopter to early majority.

Fully Charged

Five top tips to plug the charging knowledge gaps

Charging tips

There is a clear hierarchy to cost effective charging. The cheapest is home charging, followed by workplace charging. If drivers have to pay to use public chargers, then slow, kerbside chargers and destination chargers at supermarkets, gyms and hotels are typically cheaper than faster motorway charging stations.

Competitive charging tariffs

Employees who home charge their EVs need to focus on the pence per kilowatt hour of their domestic energy tariffs. These rates can vary substantially, with a growing number of energy providers offering specialist EV tariffs that offer cheap overnight rates for recharging batteries.

Public charging solutions

About 30-40% of EV drivers will not have off-street parking where they can install a home charger. These drivers will need to plug in their vehicles either at work or at a public charging station. Electricity tariffs for public charging also vary wildly, so it pays to identify the cheapest public charging stations, in the same way drivers should choose to refuel with petrol or diesel at the cheapest pump prices. These decisions all contribute to the whole-life cost savings of EVs.

When to recharge

EV batteries perform best with regular charging top-ups from about 20-80% of capacity, rather than near 0-100%, so encourage drivers to take advantage of all recharging opportunities, even if their vehicle is only going to be plugged in for an hour or so. EV batteries are typically covered by long warranties and battery degradation is minimal – perhaps 15% after five or six years – so it is not an issue for fleet drivers.

Journey planning

Drivers of EVs need to pay more attention to journey planning, plotting where they may need to recharge their EV on an app, such as Zap-Map or their vehicle manufacturer’s own app. This avoids range panic as the batteries run low. Having a Plan A, B and C takes care of situations such as a charger being occupied or out of service.

A Range of Opportunities

Range anxiety is a very real phenomenon. However, when looking in detail, it often need not be, plus there are measures that can be taken to reduce and even eliminate it.

Do not drain batteries unnecessarily

EV drivers need to be conscious of significant drains on the battery, such as heating. Using an app to pre-set the desired in-vehicle temperature, or to pre-warm heated seats and steering wheels, while an EV is plugged into a charger saves the power in the battery for propulsion. Likewise, using air conditioning sparingly while driving will extend range.

Save weight

The lighter a vehicle, the better when it comes to maximising range, so drivers need to avoid carrying unnecessary cargo in an EV.

Fit specialist EV tyres

Specialist EV tyres are designed to deal with the extra weight (due to the battery pack) and instant torque of an EV. These tyres also roll more quietly, so drivers reap the benefits of a silent motor; and they have a low rolling resistance to maximise range. Drivers should be urged to check tyre pressures regularly; under-inflated tyres can have a negative impact on vehicle range.

Realistic winter range

Inform drivers that cold weather drains battery performance – in winter expect to achieve about 70% of an EV’s summer range. Official WLTP figures for maximum vehicle range are typically optimistic, and not based on freezing temperatures