A Fleet Operators financial impact Guide about moving to an EV Fleet.
By Alex Baker, CEO CleanCar.io –
The established key decision making factor here is: Whole Life Cost, also Known as Total Cost of Ownership. The WLC or TCO compares all the costs of a vehicle as opposed to just the purchase price or lease rate over time. It considers how much a vehicle is going to cost you over a specified time period and mileage estimated total. For example; the WLC is often stated as a monthly cost figure against a mileage total. e.g. £450 per month for 3 years and 60,000 miles.
It will include cost elements such as:
- The sale price
- Any discounts or volume related bonus
- Costs of fuel
- Servicing and maintenance
- Tax payable such as road tax and employee-related company car tax
- Future residual values
- In some cases, insurance, congestion and/or toxic tax charge
On the face of it, Electric vehicles can sometimes look expensive. They often have an increased purchase price or lease rate. However, this assumption can be very misleading as, in fact, electric vehicles, usually present a lower WLC compared to Diesel/Petrol equivalents due to reduced running costs. This is from fuel (electric) and maintenance as well as a range of reduced tax liabilities (vehicle duty, BIK, congestion charges etc).
These reduced running costs will often outweigh any increase in the purchase price, compared to a petrol or diesel equivalent vehicle model. Of course, this is one of the benefits of electric vehicles.
NOTE Fuel Cost: It’s worth remembering that Electric Vehicles perform well in town/city driving conditions as in stop and start type city traffic. This actually suits electric powered engines, whereas conversely petrol and diesel engines perform poorly with this style of driving. Petrol/diesel vehicles are more suited to an open road where they gain the best fuel economy. Ideal EV drivers often suffer extremely poor MPG in their old petrol /diesel vehicles, which proves the significant fuel cost benefit of making the switch to electric.
An illustrative example of WLC savings can be seen below – Additional Reasons for Electric Fleets –
The latest models of electric vehicles produce zero CO2 and NOx exhaust emissions. Even when you account for the CO2 of the electricity used for power compared with the CO2 (and other greenhouse gasses) of the petroleum refinement process. An EV is still way ahead on the green credentials. By choosing EV cars you can take comfort in the knowledge that you are doing your bit for the air quality you breathe. EV’s are also increasingly being powered using renewable energy sources such as; solar, wind, wave and thermal. It is increasing their positive environmental impact.
Ultra-Low Emission Zones:
There are many Global and UK cities introducing or announcing Ultra Low Emission Zones. It will become much more expensive or even impossible to enter some of our cities in anything other than a pure electric vehicle.
These zones may operate slightly differently depending upon the city in question, but they all have one aim in common. The aim is to improve air quality and prevent the high number of deaths and illnesses caused by dangerous e-missions.
Some will charge users significant sums to drive into these zones. Others will have an outright ban on all vehicles other than those with Zero emissions in some zones. If you operate in city centres, then you need to take note and prepare yourself for the changes.
In addition, ‘Last mile’ delivery regulations are emerging here where the aim is to reduce noise pollution by only allowing food & goods deliveries into city centres and densely populated areas to be made by electric vehicles.
Death and Taxes as they say; you can’t escape them. But you can minimise them, and by using an EV cars you can reduce them significantly – more on this later.
We have all heard people talk about how the kind of car that you drive says a lot about you. It defines your own personal brand and status socially as well as in the workplace.
Choosing the right car in some professions can be fine art. As on the one hand, you have to show you are doing well, but not too well. Your customer’s may think they are funding this ‘luxury’ status symbol!
The benefits of electric cars cut through and change these types of perceptions and attitudes. An electric vehicle strongly identifies you as making a statement about your commitment to the environment, as well as being pretty canny with regard to reduced running costs.
It’s a bold statement to make, given these old perceptions regarding car status. With Electric vehicle technology improving each and every day, more and more people will want to discuss your EV then virtually any petrol or diesel marquee car you turn up in. It is in fact a great icebreaker.
In the five years since we envisioned CleanCar, our core proposition has become increasingly more relevant to business fleets and motorists, as we accelerate the transition to electric mobility from fossil fuel dependency. Our CleanCar solution aims to fully inform both businesses and private motorists in making that ‘transition’ as easy as possible..
To read more please visit CleanCar’s webpage for more information – www.cleancar.io or find us on social media @cleancarsystem.
Note on use of language
Experts in the EV sector may pick up on my use of terminology in this guide; I make no excuses for sometimes not using the correct terminology. The Electric Vehicle space is confusing enough without the use of dozens of acronyms. The acronyms that only an ‘EV industry stalwart’ understands. But, like we said electric car technology is growing and we want you to make the switch knowing it will beneficial to you or your fleet.
I have designed this guide for those individuals who have direct and indirect responsibility for making decisions. This could be decisions regarding Fleet vehicle procurement and logistical management etc. This guide is designed with those roles in mind. A belief that the information, guidance and advice should be presented in a straightforward and helpful format. Hence I have tried to avoid the jargon. You can find links at the bottom of this guide. The links are to some very useful glossaries. Clarity around industry buzz words.