We know the transition to electric is coming, so it’s probably better to be ahead of the curve than behind it. Electric Vehicles (EVs) that have lower CO2 emissions offer a solution for improving your green credentials, and by 2035 full EVs are planned to be the only type of new cars available to purchase, as pure petrol, diesel and hybrids cars will no longer be manufactured. The new Labour Government reinstated the original deadline of 2030 to ban the manufacture of petrol and diesel vehicles, while new hybrids will continue to be produced until 2035. With the original 2030 date ban being brought back, starting your transition sooner rather than later might be a good decision.
The Alan Jones Company Car Report 2023 reports that 36% of companies encourage employees to opt for a fully Electric Vehicle or a Hybrid Electric Vehicle, which means adoption has started but there’s still a way to go. Understanding the best way to make the transition is key.
There are challenges when it comes to transitioning such as upfront costs, charging infrastructure and installation, however, there are options to help reduce costs and make savings.
In this blog you’ll learn about the best way to manage the move to EVs and tips on how to make the right choice for your fleet.
If you’re a UK-based business looking to electrify your fleet solution, take a look at our Business Fleets page to see how we can help.
Are EVs the best option for your fleet vehicles?
Before you begin to introduce an EV fleet, there are several factors you should consider:
- Typical driving patterns and how your fleet vehicles are used?
- How much mileage do your drivers do daily / weekly?
- What type of routes are your fleet vehicles taking?
- Is charging availability good in the area you’re based or are you planning to install chargers at the office or at employees’ homes?
It’s important to evaluate your budget and long-term cost goals. Review the upfront costs, total cost of ownership (TCO), potential fuel savings, infrastructure and installations required to keep an electric fleet on the road. You should also weigh up the sustainability benefits of EVs against the practical considerations for your fleet.
It’s important to ensure your business is prepared for a successful transition. It’s recommended that you have buy-in from your employees, you have a robust rollout plan, and you make the switchover in stages for a smoother process. Here are some tips to help you minimise fleet downtime when switching to EVs:
- Choose an experienced fleet partner who can advise you on the best hardware charging solution for your business, one that considers electrification requirements and permits, as well as energy capacity requirements and the possibility for renewable energy integration.
- Review upfront costs and solutions such as salary sacrifice electric cars that could reduce those costs.
- Opt for a network management tool/software package that can provide you with data to optimise your fleet efficiency.
- Plan for renewals in advance, as some EVs still have long lead times for delivery.
- Educate your drivers about the differences between driving a petrol or diesel vehicle vs EVs so they feel knowledgeable and confident when it comes to the switch.
- Ensure compliance for your fleet is in check, a good fleet partner should be able to support you with this.
It might be that going fully electric all at once isn’t right for your business now, but you can still take steps towards your green goal. It could be that a mix of traditional petrol or diesel vehicles, as well as Hybrid Electric Vehicles (HEVs) alongside pure EVs is the best solution for your current needs.
Setting achievable EV fleet transition goals
It’s important to set realistic transition milestones when transitioning to an EV fleet, taking into account finance and budgeting requirements, as well as future planning and how you plan to grow your EV fleet.
If you’re introducing electric company cars for the first time to your employees, it’s also essential to communicate your updated fleet policy to highlight any new rulesets around EVs.
Here at CBS, we’ll look at what you do today in terms of EVs and what you want to achieve in the future, to help you determine the best way to transition your fleet to EVs.
How to phase out petrol and diesel vehicles
If your company car fleet is always new cars, then you’ll need to start looking at your EV options in the not too distant future, depending on how you deliver your employee car benefits and how long the contracts are. If you’re planning to go for a phased approach, then there’s no harm in putting a strategy for transitioning together in advance.
The optimum date for phasing out traditional fuel vehicles will vary from business to business and will depend on the driver population needs. The Government’s decision over the deadline will also have an impact, as it could be six years away or it could be 11 years.
When the right time comes for your business, ensure you plan accordingly and seek consultation to help you manage the process and reduce fleet downtime.
Long-term benefits of switching to EVs
There are a number of benefits for your business if you run an electric fleet, for example, there’s the potential to make savings on fuel costs. According to the Allstar Winter 2023 All Costs report, the average price of petrol and diesel has gone up over the last 12 months. Although the cost of electricity varies dramatically from car to car, depends on location and energy supplier and differs from public charging to home charging, if the electric efficiencies are utilised effectively, it’s possible to make savings.
By having an electric fleet, you can create a positive brand image and demonstrate corporate social responsibility by showcasing your commitment to sustainability. With the UK Government’s strategy for reaching net zero greenhouse gas (GHG) emissions by 2050 well underway, environmental impact is now a consideration for most businesses. As transport is the largest emitting sector of GHG emissions, producing 26% of the UK’s total emissions in 2021 according to the Transport and Environment Statistics, looking at your car fleet can be a step towards going green. With Electric Vehicles having lower CO₂ emissions, you can build the sustainability of your business.
There’s potential tax benefits and financial incentives available for businesses transitioning to electric fleets too. Fully Electric Vehicles which produce zero CO2 emissions come with a Benefit-in-Kind tax rate of 2% currently, and the Government has advised this won’t increase beyond 5% until at least 2028, which can make savings for your employees. And depending on how you deliver the car benefit to your car entitled drivers, there’s potential for the business to make savings too.
Charging incentives are also in place. Under its Electric Vehicle Homecharge Scheme, grants are available from the Office for Zero Emission Vehicles (OZEV). If you have a small to medium business and fit the eligibility criteria, grants are available for installing multiple EV chargepoint sockets. The grant covers 75% of the cost of the work, up to a maximum of £15,000 and you can get up to five grants, but they must be across five different sites.
Improving employee satisfaction with a modern and eco-friendly car can also be a great benefit, as it can make your employees feel valued, rewarded and motivated, especially if it’s a make or model they wouldn’t own personally without the help of the car benefit.
Here at CBS, we offer multiple ways to deliver employee car benefits, for electric cars, our Salary Sacrifice or Business Car Leasing provide the most cost efficient solutions, however, as you manage the transition (and may still want some petrol or diesel vehicle for the moment), we also have Employee Car Ownership Schemes (ECOS) that offer a tax efficient way to run traditional fuel vehicles.
Found the right solution for your business fleet?
Electric Vehicle technology is continuing to develop all the time, with so many motor manufacturers already producing electric models. The range of models available is increasing, new manufacturers are starting to enter the UK market, and the entry price point is becoming more affordable – all of which is growing momentum towards fleet electrification.
Now the Labour Government has changed the deadline back to 2030 for the ban on manufacturing petrol and diesel vehicles, the importance of planning may now take a higher priority for some businesses, dependent on their current position.
The transition to an electric fleet will be different for every company, and it may not be right for your business to go full electric today, but there are multiple options for electrifying your fleet. A bespoke, phased approach could be the best option.
If you’re looking for help to manage your transition to an electric fleet solution, get in touch with us today.