Investment in infrastructure is needed to support adoption of EVs
EVs operate in a different paradigm compared with ICE models. They have the advantage of being chargeable whenever stationary, but the replenishing range away from base is challenging. Most owners plug in each night but fully recharging depleted batteries in that time requires special facilities beyond a household plug. At the lower end, the charging units themselves are inexpensive but may carry significant installation costs, especially if groundworks are required. It may even be necessary to overcome local grid limitations by upgrading sub-stations or creating battery storage. Neither option is cheap, and most companies have no existing budget for either acquisition or maintenance of charging infrastructure. A clear understanding of the likely evolution in charging requirements over time will materially save on capital expenditure and avoid expensive reconfiguration and upgrades.
Vehicles kept overnight at the home of the primary user need charging points. However, it’s estimated that around a third of the UK’s 27 million households don’t have off-street parking, so many EV owners will need to use public charging points. This raises awkward questions for fleet operators around how a modification to an employee’s property should be controlled, and what happens if, and when, it is no longer required. Concerns in this regard include the complexities of reimbursement to the employee for electricity used . HMRC guidance on alternative fuel rates doesn’t match the efficiency of a fuel card. Software platforms that can manage the time at which vehicles charge and the tariffs paid, and provide revenue from V2G applications, will become increasingly important.
Fleets can influence product design
It takes around four to five years to create a new van or passenger car. Models set to go on sale in 2025 are being designed today. Fleet operators must engage with designers now to ensure that their product needs are known, and they may have to make advance commitments to guarantee those needs are met . As early adopters, UK fleet operators have an opportunity to influence the kinds of EVs Europe will use, and pick winners from the start-ups hoping to lead the change.
EVs demonstrate a strong commitment to sustainability
Electrification is often discussed in the context of a regulatory end date, but many companies will move more quickly. Major automotive manufacturers are committing to carbon neutrality — covering manufacturing and in-service emissions — during the 2030s. Can companies with lighter industrial footprints, such as delivery firms, be viewed as good environmental custodians if they transition more slowly? Widespread usage of EVs demonstrates a commitment to sustainability and that change is underway.
Sustainability will be measured broadly: what is the whole life energy usage of a company’s assets, and were materials ethically sourced? There will likely also be a market for repurposing of batteries for a second life — where the cells no longer hold enough range to efficiently power a vehicle but still have years of useful life in less demanding settings. Finding applications that maximise operational life before recycling could bring organisations financial and environmental benefits. Large fleet operators may find that, as extensive users, they can take an active role in battery re-use to protect corporate sustainability promises.
Regional disparities will drive EV fleet distribution
Environmental regulation has moved from national to regional as cities create low emissions zones. Several regions plan strict entry criteria, with only zero emission vehicles being allowed beyond certain dates. And often even newer ICE models will be excluded. Some regions are looking to introduce high entry charges for anything with tailpipe emissions. Others prefer to concentrate on only the worst polluting models or apply no rules at all. A business based in Bristol or Oxford may find the cost of fleet ownership becomes unbearable without EVs. Larger, national operators need to optimise fleet capability. Some will move older vehicles to more permissive territories and employ EVs only where they are needed; others may opt for a fleetwide EV upgrade, improving bargaining power with manufacturers and simplifying operations.
Transition to EVs presents a unique set of challenges
Within a decade, even fleets with the slowest rate of change will switch to buying entirely different vehicles with entirely different infrastructure needs. More ambitious operators will change even sooner. Whilst committing to immature technologies and business models, they will hope to maintain cost discipline. To manage these risks, detailed planning should already be underway alongside engagement with the wider ecosystem of potential partners. Many of these suppliers are still developing their own relationships with new associates; so interoperability is not assured.
EY’s recent report Accelerating fleet electrification in Europe showcases a range of organisations making firm EV transition plans. It highlights the challenges for fleets, governments and energy providers in dealing with the operational and cost differences between EVs and ICE vehicles.
What questions should fleet operators ask themselves?
- How will national and regional regulations and corporate sustainability objectives affect our vehicle fleet?
- What is our fleet’s real-world usage? Where is performance essential, what cost-saving compromises exist?
- What infrastructure and energy supply do we need? Where do we need it?
- What are our ideal EVs? Do they currently exist? What do they cost? Are they from brands we currently operate?
- What support and resources do I need from the wider organisation?