The technology and infrastructure that supports electric and hybrid vehicles is evolving rapidly, meaning that many people feel in the dark about the reality of the costs associated with running an electric or hybrid fleet. Concerns range from the availability of charging stations, to restricted vehicle mileage and a higher cost of purchase. Each fleet will have individual needs that must be taken into consideration, but this technology has cost saving potential that needs to be properly understood by fleet managers.
Higher Purchase Price
Government grants exist that reduce the initial cost of purchasing electric or hybrid vehicles. Companies can apply for a reduction of 35% off the cost of the car to a maximum of £2,500 or £4,500, depending on which emission category the vehicle belongs to. This is the same with vans, and businesses can apply for 20% off the cost of a van with a maximum claim of £8,000.
The government’s aspiration is for virtually all vehicles to be ultra-low emission by 2050. To achieve this, competitive grant schemes exist such as the Fuel Cell Electric Vehicle Fleet Support Scheme that offered £2 million for public and private sector fleets to invest in EV and hybrid vehicles. It is worthwhile researching what government grants are available to support your business when the time comes to invest.
Availability of Charging Points and Cost Per Recharge
The AA has partnered with Chargemaster to install charging stations at AA hotels in response to the high number of low emissions vehicles that will be on our roads by 2020. According to ZapMap’s list of registered points, there are currently 4,118 public charging locations throughout the UK. Our investment, and that of other charging station providers, means there has been a rapid expansion in the number of charging points throughout the UK.
Fleets can also install charging stations on their own premises. This could cost around £500 for the charging device and then a similar cost for installation. Currently there is no government grant available for business premises charge point. For home charging stations, a grant does exist. The government will cover up to 75% (£500 max.) of the cost of the installation. This means installing a charging station at home can cost as little as £300, good news for companies whose fleets are also for personal use by employees.
Of course, for most fleets, charging at public charging stations is unavoidable, though cheaper than you would think. Costs vary between providers as it is still early days for this infrastructure. One common approach is a yearly access fee, which can be around £20, and then a nominal charge for every use of a public charging station.
Offset higher purchase price through fuel and tax savings
Per mile driven, an EV could be five times cheaper than the average petrol car because of a combination of lower running costs and tax incentives. For some fleet managers, investing in EVs may mean that they don’t have to pay Vehicle Excise Duty (VED) or a congestion charge in London. Fleet drivers may also be eligible for Benefit in Kind (BiK) savings and government tax breaks to encourage business investment.
Reduced number of breakdowns
Fleet managers have expressed concern that it is hard to find breakdown and servicing support for electric vehicles. At The AA, we have invested in training for patrols so that every patrol is EV high voltage aware. The cost of business breakdown cover is also the same, regardless of whether your fleet consists of electric, hybrid or traditionally fuelled vehicles.
New EVs and hybrid vehicles are entering the market with increasingly impressive mileage and, within two years, the norm will be a range of around 200 miles on a single charge. For most fleets, this distance will still be too low but it is a step in the right direction. This, as well as advances in charging station technology, will mean that electric vehicles will compete with traditionally fuelled vehicles in terms of mileage.
With an increasing push for low emission zones and companies looking for cost savings, the potential for electric and hybrid vehicles is exciting. As ever, what technology is appropriate will depend on the requirements of each individual fleet. However, the cost of this technology and the options available mean that in many instances investing in an alternatively fuelled fleet is not as prohibitive as it may first appear.