It’s pretty difficult to ignore the clear environmental benefits of green technology but a complete move from conventional carbon fuel fleet vehicles to fully electric can seem like a quantum leap.
Most people understand that there are cost savings to be had moving from carbon fuel to EV technology, particularly if you can install a homecharging unit and also generate your own electricity using solar panels or wind power. Of course, let’s not forget about the environment! But there are also huge benefits for business if you scale this up to a business fleet.
Going green with your fleet
The environmental argument to move to electric technology is without question – the highest proportion of the UK’s harmful emissions are generated by transport and, the UK government is phasing out the purchase of new carbon fuel vehicles by 2030, brought forward from 2040 so the writing is definitely on the wall. So, what are the tangible benefits to the business other than a warm feeling that you are helping the planet?
- Significantly reduced fuel costs for the fleet – compare £4 per mile fully electric to £14 per mile over a 100-mile journey for carbon fuel vehicles
- Electricity is not classified as transport fuel and has a lower rate of VAT
- Lower maintenance bills as Electric Vehicles are simpler with less mechanical and moving parts compared to a traditional carbon fuel combustion engine
- Positive driver rewards of lower benefit in kind taxation, electric cars quality for a lower rate of tax under a salary sacrifice scheme
- Electric cars are exempt from the Congestion Charge in London and also the fees attached to Ultra-Low Emission zones in inner cities which are on the increase, a significant repeated expense for businesses whose fleet operates in urban areas with lots of short journeys in and out of these areas
Assessing the current fleet
Changing fleet vehicles in one go from carbon fuel to electric technology might involve taking a deep breath but in order to feel fully confident and informed, the best place to start is with an assessment of the current cars and vans and the type of journeys they undertake.
One of the biggest concerns about EVs is their range, not a problem if your business vehicles undertake lots of short journeys, but certainly a concern amongst employees who regularly drive long distance.
Begin with an in-depth analysis of your current motor movements including length of journey times and how frequently the vehicles are used – this will involve an assessment of each driver/employee and whether their current fleet vehicle usage could be comfortably performed in an EV. Other factors to consider will include:-
- The speed of re-charging an EV and accessibility to charge points, whether you plan to have charge points on site or at the employees’ home, or both. It may be the case that some of the fleet vehicles can be fully electric whereas others may need to be hybrid technology, a plug-in electric vehicle or PHEV
- Employee entitlements may alter if you are considering company car benefits rather than a pure commercial fleet of say delivery vans or light goods vehicles. Fleet grades are often based around rental bands so it might be worth considering a Whole Life Value over the entire leasing period. The Whole Life Cost considers all the costs factors involved in the lease lifecycle of a fleet car rather than just the base rental cost and this makes comparing different cars more accurate. If the Whole Life Cost of an EV is still looking excessive for the driver grade, then some fleet management companies offer what is described as a ‘blended solution’ which balances the Whole Life Cost against the benefit in kind driver savings – this can get around the problem of high EV purchase/lease costs relative to the staff grading structure
- Are you intending to support staff with the installation of an EV charger at their home? They will need off-street parking and not every staff member will live in a property which has this. There is a grant available to help with the costs of installation called the OLEV grant or the Electric Vehicle Homecharge Scheme but there are criteria which need to be satisfied in order to claim some funds towards the installation cost. This is typically up to 75% and limited to £350 as against a total installation of charge of somewhere between £800 and £1,000
- Installing EVs at work will encourage uptake amongst the staff if you run a fleet of company cars and is essential if your business relies on vans or light goods vehicles. The government offers a similar scheme to domestic installation called the Workplace Charging Scheme which offers employers up to 75% of the purchase and installation cost subject to a maximum of £350 per socket with a total installation permitted of up to 40 sockets at any workplace
- Businesses will need to have a conversation with their local Distribution Network Operator to determine how much electricity supply will be required on site and what the current capacity is as an upgrade could be needed
Timing your switch to electric vehicles
The easiest and cleanest point is when leases come up for renewal; this has the added benefit of introducing the technology more slowly, allowing both the business and their staff to get used to the change and fix any teething problems in a gradual rollout.
Planning ahead is crucial as there are some quite long lead in times on EVs currently. There are plenty of fleet management companies ready and willing to help with the switch to new technology from the initial current fleet assessment right through to the delivery of new cars so it could also be time to shop around and make sure you are using the best in the market for your needs.
It is important to keep staff informed and on board with the new changes and also worth considering the switch as a vein of rich positive publicity for your business.