WHEN it comes to fleet decarbonisation and sustainability, many fleet operators are looking to electric vehicles (EVs) to reduce carbon emissions and support net zero. As a result, EVs now account for 3.1% of the UK’s vehicle parc, with a total of 1.1m electric cars now in use on UK roads – a figure rising by more than 50% over the last year.
Emma Loveday, Senior Fleet Consultant at Volkswagen Financial Services (VWFS) Fleet, discusses the considerations businesses need to make to understand the true impact of EVs for their fleet, and how fleet operators can design an effective transition strategy that supports decarbonisation.
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Considering driver and vehicle operations
When looking to switch to EVs, fleet operators need to first consider individual driving patterns and how these match with a vehicle’s electric range capabilities. Although many fleets typically operate with batches of uniform vehicles, individual driver operating profiles – in terms of daily mileage patterns and journey types – can vary significantly.
Gathering this information can give fleet operators insight into how easy – or challenging – it would be to switch individual drivers or vehicles to EVs. From this, they can then begin to prioritise those that are most suited to an EV and so should be transitioned first.
You may identify drivers who are a top priority for EV transition, but their vehicles aren’t close to the end of their current replacement cycle. In these instances, it’s worth thinking about how you could redistribute existing vehicles within the fleet to put these drivers at the top of the list for a new vehicle. This will help to ensure your EV transition isn’t delayed or impacted by lengthy replacement schedules.
Impact of location and source of power
Broadly, the sustainability impact of EVs is well recognised – with EVs having zero tailpipe emissions and producing up to 50% less CO2 over their lifespan. However, the true sustainability impact of switching to EVs for any given fleet or vehicle can depend on a number of factors – namely the locations they operate in and their primary source of power. For example, in areas benefiting from higher renewable energy usage, EVs can save up to 70% on CO2 emissions when compared with ICE vehicles.
This means that switching to EVs can be even more sustainable for certain fleets, depending on where their drivers are operating and the source of their power. Across the UK, access to renewable sources of energy can vary significantly. Looking at where drivers are located, and whether or not the area where they’ll charge their vehicle benefits from renewable energy, can help fleet operators to understand how sustainable making the switch to EVs will actually be.
Fleet operators should consider how they can improve access to clean and renewable energy sources for EV charging when developing their transition and sustainability strategies. For example, this could include installing solar panels to power workplace chargers. It may also include incentivising the adoption of sustainable solutions for home charge points, where possible. Alongside this, businesses also need to consider their charging strategies to ensure drivers are using these sustainable charging solutions – over and above those available on the public charging network, for example.
Understanding true cost
One of the key barriers for EV transition for many fleets is initial cost, as the monthly lease for EVs is typically higher than that of an equivalent ICE vehicle. However, fleet operators need to shift focus away from monthly lease costs and towards whole life cost (WLC) to understand the longer-term cost impact of switching to EVs.
Although the monthly lease cost is clearly a significant portion of the overall cost of running a vehicle, there are other costs involved such as servicing and maintenance, business fuel (or charging) and Class 1A NIC (where applicable). These costs can all vary depending on the vehicle powertrain.
Even though higher purchase prices typically lead to higher finance costs, EVs are often significantly cheaper to run. While the focus is often placed on fuel cost comparison between EVs and ICEs, EVs also offer employers significant savings on Class 1A NIC contributions.
Another consideration is that EVs typically have much lower maintenance costs than ICE vehicles. These costs often won’t increase significantly after four years or 80,000 miles in the same way that ICE vehicle maintenance costs will – particularly for commercial vehicles. This means that fleet operators can also consider extending replacement cycles for EVs to lower monthly lease costs, which in many cases can make the transition to EVs more cost comparable or even cheaper.
Developing an effective transition strategy
When powering up fleets to reach net zero, fleet operators need an effective transition strategy. This should outline the key stages and individual elements that will ultimately help them to achieve an electric fleet.
This will typically include:
- Assessments – driver and vehicle profiling and infrastructure assessments
- Pilots – identifying EV volunteers, trialling different vehicles and installing required infrastructure
- Reviews – assessing the impact of EVs, building a replacement roadmap and reviewing infrastructure requirements
- Rollout – assessing individual vehicle replacements, reviewing electrification barriers and scaling up
VWFS Fleet offers a number of free tools to support fleets transitioning to EVs and help businesses to understand the true sustainability impact of making the switch for their individual fleet.
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