The growing demand for EVs to feature, or even replace some fleets in their entirety is certainly something many businesses are considering.
When the first wave of electric vehicles (EVs) began to appear in 2011, the early adopters were either people with high disposable incomes or those with an active interest in green living. Buying an EV involved a cost or compromise that required significant motivation. Over a decade later, economic forces and environmental concerns have resulted in a different category of buyers rapidly increasing their demand for EVs. Namely, the fleet buyer.
For many fleets, the case to go electric is even stronger than the individual buying for them and their family. Fleet electrification is a big jump for many businesses more so now than ever. Each fleet segment has a mix of light-, medium- and heavy-duty vehicles necessary to satisfy the segment’s vocation. And that mix will be similar across most fleets within that specific segment. By contrast, fleets of a different segment will have a significantly different mix of vehicles.
This variation in the fleet mix is one of main factors that impact the electrification opportunity because the availability of relevant and cost-competitive EV models differs across vehicle categories. Over the past few years, EV models have started appearing in nearly all vehicle categories; however, the difference in availability and cost efficiency from segment to segment remains significant.
For fleet segments where a variety of EV models are available, EVs prove to perform better than personally owned EVs. When considering an EV for personal use, many prospective buyers focus on that “one trip” to the cottage or a remote destination that lacks a charging point. This is why personal vehicles must have batteries that can withstand larger usage than your average day-to-day drive, in comparison, the last-mile delivery van does a single job and is easier to measure.
This is an important point for the economics and environmental benefits of an EV. When a vehicle is bought with the “one-trip” in mind, a vehicle with a larger battery is purchased which can increase the cost of the vehicle. While you can still get a positive payback in some cases, it is generally much better if you can avoid this premium. And for fleet vehicles with consistent daily distances, you can.
Many fleet vehicles remain at their work premises, while others are taken home by employees. There are trade-offs to both scenarios with plenty of nuances. Many factors go into planning fleet charging infrastructure. In commercial fleets, getting this right is critical. Fleet operating costs are significant and maintaining (or improving) operations while reducing total operating costs is a strategic advantage. In the fleet segments with the highest electrification rates, having knowledge on how to operate a fleet with electric vehicles does can take some time. For public fleets, getting this right enables the fleet to achieve its emission goals while reducing its overall costs—a highly welcome win-win scenario when high inflation rates are stretching everyone’s budgets.
As more and more organisations consider these points, the Government support remains place to reduce costs for initial EV onboarding and infrastructure implementation. The majority of fleet operating businesses said they expect to operate a fully electric fleet within the next four years, comfortably ahead of the 2030 ban on new petrol and diesel vehicles. In addition, more than four in ten said they had increased the number of EVs in their fleet already (over the last 12 months).
If your organisation is looking for EV insurance for new electric company car fleets, and the peace of mind of Incident Management support, then please speak to the knowledgeable team at NOVO, one of the UK’s leading specialists in EV insurance.
We can tell you about the many benefits of using our electric vehicle insurance cover and give you all the advice you need about our policies, which include the guarantee of a like-for-like replacement EV in the event a vehicle is off the road to keep your business travel running smoothly.