4 minute read 24 Sep 2021

Implementing charging solutions is key for the success of the electrification of companies’ car fleet.

Why charging solutions are the fuel of fleet electrification.

Hendrik Serruys
By Hendrik Serruys

EY Belgium People Advisory Services Partner

Creative mind and out-of-the-box thinker. Solution-driven and passionate business partner. Addicted to new technologies. Love to wine and dine.

4 minute read 24 Sep 2021
Related topics Future of mobility Automotive eMobility
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Implementing charging solutions is key for the success of the electrification of companies’ car fleet.

In brief

  • When offering electric company cars in the car policy, a fitting charging solution is needed.
  • Offering charging solutions is vital to increase the level of electrification of the fleet.
  • In a fast-changing industry, you will need to select the right mobility partner who thinks both short and long term. 

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Electrification of the fleet is high on the agenda of companies’ mobility strategy. Or at least it should be, taking into account the draft law that makes non-electric cars less attractive from a tax and CO2-contribution perspective. But as electrified vehicles require charging facilities, you can’t have one without the other.

That is why companies who take the sustainable electrification of their fleet seriously, should not only focus on the electrification itself but also consider providing fitting charging solutions as well. Providing a solid and transparent framework around charging solutions will only improve the electrification rate of the company fleet. There are different approaches on how to implement this. Let’s explore these different options and their advantages and challenges.

How to financially implement charging solutions for electric company cars?

  • As an incentive on top of the lease or purchase budget

    The most progressive solution is to offer the charging solution as an incentive, on top of the available budget. This can either be in the form of a fixed charging station or a smart charging cable. Not only does this clearly communicate the message that the employer commits to the change, it also provides the opportunity for drivers to choose an electric vehicle with a bigger battery within their budget because the charging cost is not deducted from their budget. Naturally, this is the more costly solution when implementing charging solutions in a company car fleet as the Total Cost of Ownership (TCO) will increase with the cost of the charging station.

  • By integrating it into the lease or purchase budget

    A more cost-neutral solution is to integrate the charging solution within the available, current Total Cost of Ownership (TCO) budget. This makes sense because a charging solution is an integral part of the package when choosing for an all-electric vehicle. From a company perspective this is a budget neutral implementation, as the TCO can be set equal compared to internal combustion engine vehicles.

    For drivers this might mean that a portion of the lease budget is taken up by the charging solution. However, given the steady decrease of purchase prices and strong performance of residual values of recent all-electric cars, equivalent electric cars could be possible. In some cases, the net TCO cost of an electric company car even outperforms that of a conventional company car, even with the extra cost of the charging solution.

  • By offering a tax advantage for private installations

    Under the recent legislative proposal by Minister Van Peteghem, private individuals who install a charging station at home are eligible for a tax deduction. For those who install the charging station before January 2023, a tax deduction of 45% on a maximum amount of 1.500 EUR per charging installation, per taxpayer can be applied. That percentage will decrease to 30% in 2023 and to 15% in 2024.

    This solution will in principle be the least complex for employers and provides a certain financial advantage for employees who install the charging station within the predefined timeframe. However, on the other hand the driver still has to pay the installation privately upfront.

How to source charging infrastructure?

When the first e-cars came on the market some five years ago, leasing companies included the installation of charging infrastructure in the lease contract. Given the limited spread, priority was to keep the sourcing process as simple and aligned as can be with established conventional vehicle processes. Today however, the number of drivers with an electrified vehicle is growing rapidly, and thus directly related is the required amount of charging solutions. This in turn asks for a stable, uniform and clear solution for the entire electrified company car fleet, both today and in the future. Two of the most common ways of sourcing charging infrastructure are via a leasing company or via an independent partner.

  • Via a leasing company

    • Advantage: the order process for both a new company car and a corresponding solution remains the same. No new or additional contact persons will be added to the supply and communication chain. The cost of the respective charging solution can be directly added to the lease contract.
    • Disadvantage: Companies often work with different leasing companies. But they regularly change charging station installation partner. In addition, most partners have their own reimbursement software, which means that not every employee is reimbursed at the same rate. Additionally, the reimbursement process itself might be different between two partners, depending on agreements with the lease company. This creates a difficult environment to communicate clearly towards drivers and potentially gives you different reimbursement platforms to manage and keep track off.

  • Via an independent partner

    • Advantage: A uniform charging solution can be supplied for all drivers, independent of changes in partnerships between leasing companies and their respective installation partners. If all technical requirements are defined on a future proof basis, the specific hardware solution can vary. When implementing a flexible solution, one installation partner can manage every step in the installation process from audit, order to installation itself. This one partner will thus be the SPOC for all charging solution installations, independent of where and which car is ordered. Furthermore, this partner can provide both home and office installations as well as provide a single charging card that can be used on more than 95% of charging stations. This includes the charging stations at home and the charging stations at the office. Choosing for an independent partner is comparable to choosing an independent partner for fuel cards: everything that revolves around consumption is managed and invoiced via one single partner. Both today and in the future.
    • Disadvantage: finding an independent installation partner is per definition equal to adding an extra - and unknown - supplier.

What about the benefit in kind for charging solutions?

With respect to the benefit that the employee receives from the employer when the charging solution is installed at their residence, there is no additional benefit in kind (BIK) that will be charged for these charging solutions. The FPS Finance considers a charging solution as an integral and necessary part of an electric company car and therefore included in the benefit in kind of the company car. As the charging solution will not be a private benefit of the employee, it will not be the subject to additional social security and tax.

Our next article will focus on determining the Total Cost of Ownership and how that impacts the financing of the charging solutions.

How EY can help

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This article was co-created with Stroohm, expert in electric mobility.

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Summary

Implementing a charging solution is definitely a topic that should be taken into consideration when electrifying the company fleet as the highest rate of electrification can be achieved by providing a solid and clear framework concerning charging solutions.

Selecting the right partner for that kind of implementation can ensure a carefree management and usage. 

About this article

Hendrik Serruys
By Hendrik Serruys

EY Belgium People Advisory Services Partner

Creative mind and out-of-the-box thinker. Solution-driven and passionate business partner. Addicted to new technologies. Love to wine and dine.

Related topics Future of mobility Automotive eMobility
Upvote