Switching to electric vehicles: What do businesses need to bear in mind?

Matthew Walters, Head of Consultancy and Customer Data Services LeasePlan UK, highlights 6 considerations businesses need to factor in when switching to electric vehicles

There is an increasingly urgent need to reduce our carbon footprint, especially with the automotive industry contributing to 20% of the EU’s carbon dioxide (CO₂) emissions, and 14% of the globe’s total CO₂ emissions. It’s important that we continue to take action, from consumers through to SMEs to larger-scale corporations, who rely on road transportation for the day-to-day running of their businesses.

Change is happening with the larger corporates; well-known brands including IKEA Group, Unilever and HP Inc joined LeasePlan as founding members of EV100: the global initiative committed to accelerating the transition to electric vehicles (EVs) and making electric transport the new normal by 2030. And with the nation currently ranking third in Europe for the number of electric vehicles (EVs) on its roads, electricity is becoming a more viable option for motorists and businesses alike.

Putting this into practice as a business owner though can seem a little overwhelming, especially if you’re managing a fleet. In addition, many business owners see electric vehicles and company fleets as separate entities, when actually, the two should be intertwined. With a large majority of vehicles on the road, it’s the ideal place to start for those looking to reduce their emissions.

In fact, small measured steps, for example, changing a select number of vehicles each year, will help to ensure a smooth transition.

1. Cost

Electric vehicles are still more expensive to purchase than traditionally fueled vehicles, but it’s important to factor in the longer-term savings that electric vehicles offer, rather than taking the vehicle value at face value.

Firstly, if you’re considering going electric, make sure to research the government subsidies that are available to buyers. You or 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.  If you want to know which vehicles are covered, take a look here.

Secondly, in terms of fuel savings, on average, £2-£4 in electricity costs provides the same range as £13-£16 of petrol but EVs 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 electric vehicles have fewer parts, theoretically they should be more reliable and not require as many expensive trips to the mechanic. Whilst your annual service could be up to £300 cheaper, you might have to find a specialist garage.

2. Availability

In the last few years, manufacturers have been producing more EV models – but there still aren’t enough to fully meet the demands of company fleets. However, manufacturers are increasingly focusing on developing more environmentally friendly vehicles, as government policies are becoming firmer towards emission heavy industries and sectors.

Whilst Britain has a long way to go until it catches up with the progress made in Norway, where 53% of all newly registered vehicles are electric, it’s not a bold statement anymore to predict that EVs will soon be dominating our roads and motorways. 

3. Range

The range that EVs are capable of has often dominated the conversation in converting to emission-free engines, however, they are developing quickly. Whilst they can still be impacted by cold weather, some EVs are now able to travel 180 miles on a full charge, a figure that is constantly improving. However, vehicle reliant businesses which make long or numerous journeys each day need to consider access to charging points.

4. Charging

Fleets no longer need to feel hindered by the lack of charging points across the UK, however, journeys will still need to be planned ahead of time to ensure access to a charging point if necessary.

New locations are added into the grid each day, and can easily be found on apps, or even Google Maps. Whilst the number of locations with charging points across the UK has continued to rise, there are several different providers running public charging schemes – all of which require registration. This means you may have to sign up with more than one provider to pay when you charge.

In addition, if you’re providing your drivers with electric vehicles, you will also need to consider home charging points. There are further government grants available of up to £500 for these, meaning setting one up at the office or depot is affordable.

5. Clean Air Zones (CAZ)

These zones are set to become the norm across the UK, with several towns and cities primed to begin the schemes in the near future. This means if you manage a fleet of vehicles, be that two vans or 30 cars, your drivers could be facing expensive fees each day on popular routes through city centres.

Electric vehicles are exempt from these charges, which cost £12.50 a day per vehicle in London. So, if a vehicle is driving through the heart of London for example, it will incur the CAZ cost, as well as the £11.50 daily congestion charge. Assuming your fleet is driving through the zone Monday to Friday each week of the year and the vehicle doesn’t meet Euro 6 diesel or Euro 4 petrol rules, it could set your company back an annual cost of £6,240 in charges.

6. Suitability

Whilst the industry is constantly evolving and maturing, it’s important to assess whether the models currently available are in fact a viable option for your whole fleet. Therefore, it’s vital to research the individual needs of the drivers, looking at current routes and driving activity to ensure the switch doesn’t impact your business and its services.

For example, this data can identify new routes that incorporate charging points, and even work out if the average mileage will be possible with current range constrictions. Using this data will allow you to identify which vehicles can realistically be changed for an EV. Whilst it may not be appropriate for all your vehicles, with the development of new technology, this won’t always be the case, so it’s worth reviewing this every few years if you can.

It’s becoming increasingly important for business owners to be mindful of changing attitudes towards the environment. Showing willing and change has the potential to have your business viewed more favourably by potential clients, which is always good for the bottom line. After all, many will be looking to work with or buy from organisations that share the same values as them.

Ultimately, businesses need to be championing changes which contribute to a greener society, as the Climate Change Agreement recommended that businesses be held partially responsible for ensuring the UK is able to reduce its carbon levels by 80% before 2050. To do this, businesses will need to, if they haven’t started already, integrate sustainability plans companywide to begin futureproofing their fleets.

If electric vehicles are the future of your fleet, start internally and provide them to senior managers as well as including EVs in your car policy. You could even consider switching your shared vehicles to ease your drivers into the change.