Home Technology Electric Vehicles Can Electric Vehicles Save Businesses Money?

Can Electric Vehicles Save Businesses Money?

It’s an ideal time for businesses to start considering the move to EVs. But when is the right time to move, what factors need to be taken into consideration and how can the move be made in a cost-effective manner?

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Electric Vehicle - stock image

The government’s Road to Zero Strategy commits to 25 per cent of all cars in the central government department fleet being ultra-low emission by 2022, aims for at least half of new cars to be ultra-low emission by 2030, and cumulates in ending sales of new conventional petrol and diesel cars and vans by 2040.

The reasons for this are clear. The environmental benefits of electric vehicles (EVs) are overwhelming — they produce no particulates or harmful emissions at the point of use. In fact, they will be an essential part of meeting our net zero greenhouse gas emissions target by 2050.

It’s an ideal time for businesses to start considering the move to EVs. But when is the right time to move, what factors need to be taken into consideration and how can the move be made in a cost-effective manner?

On the cusp of change

Transport Secretary, Chris Grayling has predicted that there will be more change in the transport sector over the next 10 years than there has been in the previous century. And while the impact is clear for consumers and the automotive industry, it is less clear how businesses can benefit from the move to an EV fleet.

Currently, vehicle range is limited, as is the charging infrastructure, but, both these will improve through investment and innovation in the industry. Battery capacity is also improving all the time, and affordable vehicles, such as the Kia e-Niro have a range of 200 miles plus.

The move to EVs can also help businesses to achieve sustainability goals, especially if they generate their own renewable energy to charge them. And, in addition, money savings and CSR advantages are very attractive options.

However, before making the move there are a few things to consider. Organisations must ensure that any decisions taken today can be fully supported by what innovations occur in the future.

Which fleet is right for your business?

Any vehicle choices must meet the needs of the business and the employees.

Currently, average UK electric car ranges are under 200 miles and some affordable vehicles struggle to achieve 150 miles. So, if employees are covering more than approximately 150 miles a day without returning to the office, an electric vehicle is probably not a current viable option.

However, we could soon be seeing average ranges of 300 and 400 miles. Essentially, a business must know their fleet’s travel patterns in detail before deciding which vehicle meets its needs.

In addition, many organisations offer a company car as a ‘benefit in kind’. However, large tax payments can lessen the benefit to the employee. But, as of April 2020, a pure electric vehicle with zero emissions will fall into a zero per cent tax bracket, rising to one per cent in 2021/22 and two per cent in 2022/23. This also applies to pre-registered company cars with emissions of 1-50 g/km and an electric range of 130 miles or more. Compare this to a 100 g/km vehicle which carries a 23 per cent tax rate, and EVs become a very attractive option for business executives.

Which charging infrastructure meets the business’ needs?

This is an area where businesses can be least prepared, and expensive mistakes can be made if this complex process is not considered in enough detail. Presently, there is no standardisation in terms of charging points for electric vehicles.

Additionally, it is essential to understand when, and how long for, vehicles will need to charge. Slower charging points can cost as little as a thousand pounds, but as rapid charging points cost tens of thousands of pounds, businesses should only install them if they are strictly necessary. Also, understanding how many charging points are required relies on knowing journey patterns for each and every vehicle.

Where should you place your charging points?

This will be different for every site, but it is one that needs careful consideration. For example, placing charging points outside a reception area may be more expensive than if they are close to an electricity distribution board. The best path forward is to cost a number of options before making a final decision.

Controlled or smart charging options may also be beneficial. If engineers are out on the road all day, restricting their vehicle charging to off-peak times only makes financial sense. However, if they need to charge their vehicles at peak daytime rates, then it may not be appropriate to control their charging times.

The benefits of an EV fleet

There is a lot to consider, but EVs provide many benefits for a business. They are extremely sustainable — savings on fuel can be as much as £1,200 for every 10,000 miles. In addition, electric motors have fewer parts so there are cost savings to be made in terms of maintenance and servicing. Also, low emission zone charges for businesses operating in these areas can be as much as £100 a day for large vans.

EVs also contribute to an organisation’s own low emissions targets — something which needs to be taken into account given the 2050 UK net zero emissions target by 2050.

In addition, as vehicle-to-building and vehicle-to-grid services become possible, EVs could not only save businesses money on their electricity bills, they could also act as a source of revenue.

Considerations for the future

Moving to an EV fleet is a complex process and it’s one which requires careful analysis. Working with the right adviser is essential as is facilitating the inclusion of all stakeholders in the decision-making process; such as energy managers, procurement managers, facilities managers and fleet managers.

It can also be advisable to start with a trial before embarking on a whole EV transformation. One such company adopting this approach is SES water. It is trialling ten Nissan vans to prove that EVs can be cost competitive with diesel, with a broader view to full deployment in the future. This also ensures that the charging infrastructure is fully tested to meet both current and future requirements, before committing to a larger investment.

By 2030 there could be as many as 11 million EVs on UK roads, according to National Grid.

We are currently at the beginning, but as the EV adoption curve increases exponentially, businesses not following suit may be missing an opportunity. Businesses need to plan now for a future where diesel and petrol fleets are a thing of the past.

 

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