Buying EVs: What to consider?
The majority of fleet operators want to embrace a zero emission future, but the road to get there still has challenges and continuing confusion regarding the cost of ownership, infrastructure, journey planning, and driver education. Peter Eldridge, director of ICFM, gives food for thought for those considering the switch to electric vehicles
Making a case for an electric vehicle (EV) fleet continues to be something of a conundrum for UK fleet operators and in some ways this has an air of the inevitable about it given the broad range of business-critical factors involved.
The majority of fleet operators want to embrace a zero emission future, but the road to get there remains fraught with challenges and continuing confusion regarding the cost of ownership, infrastructure, journey planning, driver education etc.
It is no surprise that many fleet operators simply don’t know what to do for the best and that, of course, is no basis to move forwards strategically.
The first golden rule of any change process is clarity and the problem with the way that EV technology is being dealt with in the UK is that there continues to be a great deal of shifting sand surrounding the subject.
Let’s take a look at some of the key areas involved.
On a positive note, ‘range anxiety’ is progressively becoming yesterday’s news and in real terms, it is now perfectly feasible for fleet drivers to successfully fulfil their business and private journeys with an electric vehicle.
That said, ensuring that EV choices are finely tuned to a specific driver’s journey and mileage profile is critical, as there are still marked differences in the achievable ‘real world’ mileage ranges of available EVs. Providing drivers with information that helps them understand the range capabilities of their chosen EV and how to strike a good balance between energy efficiency and performance usage is a vital first step.
Getting the most from an EV
Continuing with the topic of driver awareness, let’s explore a few more key elements involved with educating drivers to ensure that they get the best from their EV.
Driving style has a significant impact and it is highly advisable to maintain steady speeds when driving an electric vehicle. ‘Gunning’ the vehicle will rapidly consume valuable battery performance and thus reduce ‘real world’ range.
Avoiding harsh braking also pays dividends in respect of extending battery charge, since it maximises the use of the regenerative braking system.
Improved anticipation when overtaking and braking and leaving enough space for routine driving manoeuvres is another key to maximising energy efficiency.
Many EVs are equipped with some form of economy mode that automatically chooses the most energy-efficient way to drive from A to B. Maximising the use of these systems will ensure that economy parameters are utilised and enhanced battery life promoted.
Encouraging drivers to adopt a frugal approach with the use of the vehicle’s climate control, in-car entertainment, satellite navigation and mobile phone charging systems, will also positively improve range capability. This is particularly important during periods when battery power is low.
Consider the charging infrastructure
The current charging infrastructure in real terms continues to be one of the more significant areas of uncertainty as far as the average fleet driver is concerned.
There is no question that the situation could be greatly improved if all motor manufacturers and charging point providers were to get together and deliver a more mature and joined up approach to universal plug-in compatibility, the variable charge point capabilities/timescales involved and the multitude of payment systems in place depending on the charge point provider.
Depending on the actual vehicle choice and battery kilowatt performance, a full recharge can take anywhere from circa 35 minutes to 13 hours and this is obviously an unacceptable variable. This is particularly relevant for the latest, high mileage range, manufacturer offerings, which equipped with larger 75-100kw batteries, but are left somewhat exposed as a result of the limited numbers of commensurate charging points available in the UK.
These dynamics are also driving a shift from ‘range anxiety’ to real concerns about reported ‘recharging congestion’ at many of the outlets available and this continues to have a real impact on driver and fleet operator confidence regarding EV uptake.
Additionally, EV production lead times continue to frustrate potential buyers and when all the elements are taken into consideration, it explains why the current fleet registrations provided by the Society of Motor Manufacturers and Traders clearly endorse that although progress is being made towards a zero emission future – it still has a long way to go. Battery electric/hybrid electric/plug-in hybrid/mild hybrid vehicle registrations represents 9.9 per cent of the market share, while conventional petrol and diesel vehicles take the lion’s share at 91.2 per cent. Petrol is the predominant player at 62.4 per cent and mild hybrids make up the balance at 3.5 per cent.
Once the stakeholders involved stop battling for supremacy in terms of the different technologies and adopt a more universal charging point system and payment mechanism approach, the situation will improve significantly.
Cost of ownership
Turning to the matter of cost of ownership, fleet decision-makers require encouragement to introduce and present powerful financial arguments to their boards in order to drive environmental policy change.
However, a failure by Government until July this year to announce company car benefit-in-kind tax rates post April 2020, although slightly incentivising the take-up of zero emission vehicles, also failed to take account of the lack of availability of those cars in today’s marketplace and further frustrated a proactive switch to an electric vehicle future.
It should also be noted that with the cancellation of the November Budget due to a general election being called for December 12, the company car benefit-in-kind tax rates post April 2020 have yet to be enshrined in law as the 2020 Finance Bill – usually published post-Budget – has been delayed as a result.
One assumes that post the election a Budget will be held quickly – but due to Christmas and the New Year and the Parliamentary recess being December 21 to January 5 that is unlikely to be until the New Year. We must therefore wait and see if the announced tax rates are retained by a newly elected Conservative administration or replaced by a Government of a different political persuasion.
For fleets and company car drivers to truly embrace the plug-in vehicle revolution, the Government needed to take greater account of reviewing benefit-in-kind tax rates in conjunction with model launches and availability.
The benefit-in-kind tax changes due in April 2020 promoting a 0% rate, followed by 1% in 2021/22 and 2% in 2022/23, coupled with a plug-in grant of up to £3,500, will attract fleet operators and employees to EVs, but lead times must be in-line as well.
If all the elements come together, then real progress will be made with EVs, but there is also a word of caution that needs to be mentioned. There is a real danger that because of the benefit-in-kind tax changes, drivers will rush to take advantage of the personal financial benefit available and, if not managed carefully, fleet operators could be left heavily exposed by drivers making uninformed vehicle choices, that for the reasons mentioned earlier do not fit for their business use profile.
This is not a new problem and the previous switch to petrol hybrid cars to take advantage of the benefit-in-kind tax benefits, exemplifies how, what was intended to be a positive environmental move, for many, actually had the opposite effect. The reason was simply that for many fleet operators they became a proverbial duck out of water due to poor driver/journey analysis that resulted in hybrids operating predominantly outside of their economic efficiency zone. The outcome – significantly higher operating costs, specifically fuel bills, compared to their previous (now demonised) diesel counterparts.
In summary, fleet drivers will make improved environmental vehicle choices, but only if the benefit-in-kind tax regime is beneficial; electric vehicle recharging is straightforward at all points in their business and personal travel; and electric vehicle selection is straightforward.
Fleet operators will then be able to get down to business and select the right EVs for the right application; help employees understand the benefit-in-kind tax implications of their company car choice; provide driver guidance on how to run electric vehicles efficiently and responsibly. This will include maximising electric only miles in plug-in hybrids and the effective management of street, home and workplace charging routines and etiquette.
Let’s be completely clear – fleet operators are not averse to change, but they will not expose themselves or their businesses to the potential fall-out of poor or uncertain policy decisions. Consequently there are presently still too many unknown factors across a sector that remains embryonic in terms of sales.
If you would like to find out more, the best place to start is by taking a look at the ICFM training and education programmes. More details are available on the ICFM website www.icfm.com or you can contact administration@icfm.com for further information.
Source: https://greenfleet.net
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Graph 1: fleet management activities
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