02 Jun Is it time to future proof your fleet?
The electrification of all or part of a company car fleet is an inevitable consequence of climate change, consumer demand and government directive.
With transport being considered a major contributor to climate change, corporate fleets are key targets of governments trying to reduce greenhouse gas emissions and get the EU back on track to meet the zero emissions target of 2050
Electrification will happen. For the company car fleet operator it is only a question of when. Should adoption of electric vehicles happen over the next 3 years to take advantage of government interventions in the form of grants and favourable BiK rates, or does purchase price and the practicalities of range and charging infrastructure mean electrification is a more medium term objective?
Government incentives to choose electric remain attractive, although as grants are reduced these tactical interventions appear short-lived. It is highly likely that the push policy of financial support currently employed by governments will slowly disappear as consumer demand and restrictive legislation takes over. Inner-city bans on internal combustion engines as well as pledges to electrify the industry will make it increasingly challenging for large fleet operators to operate without introducing at least some EV’s.
Vocal pressure groups such as ev100, part of The Climate Group, are actively recruiting major companies to their electrification campaigns, with many success stories from the likes of IKEA and Deutsche Post.
Although businesses are facing significant macro pressures to adopt EV’s, the handbrakes to change are still quite forcibly applied in many companies. The challenge for governments and pressures groups is to educate and incentivise powerfully enough that these handbrakes can be released. Perceived cost is a major hurdle as the ticket price of EV’s relative to their equivalent ICE is consistently higher. However, a well-managed fleet will observe Total Cost of Ownership [TCO] and major studies suggest that EV’s may in fact operate with an average TCO that is better than their ICE counterpart.
Introducing EV’s to a company car fleet is not simple and does require planning and policy development to ensure seamless integration. Range anxiety amongst drivers needs to be addressed, whilst a charging policy and infrastructure needs to be considered; anticipating the Health and Safety implications of tasks like charging from home.
Up until the start of the Coronaviris pandemic the charge of the electric vehicle was accelerating. But what now for the EV? We have written about how we don’t expect the popularity of EV’s to suffer any short-term damage due to the pandemic, as although there is now a sharp focus on costs, the TCO’s of EV’s appear favourable.
The appetite for EV’s from the sector also appears strong. The 2nd Fleet Europe survey on the worldwide impact of Covid-19 on fleet and mobility shows an improving situation about fleet electrification. The position of Fleet buyers toward the electrification of their fleet is in fact suggesting a net positive, as although 18% suggest a reduction in electrification in 6months, 26% suggest an increase. [the balance saying no change]. The outlook of fleet suppliers toward electrification of the fleets they supply is also changing, as only 50% say it will slow down, compared to 66% suggested this in the first survey during March/April.
Electrification should be on the agenda of every company car fleet operator. But whilst the decision to flip the switch is still a choice, it will depend on a number of factors that need to be carefully considered. To help, Fleetworx have created this ebook that will help operators of company car fleets debate if now is the right time to lead the charge.Back to Blogs Back to Case Studies List