From 2040, new cars sold in the UK must have zero emissions capability. Dean Gurden explores how geared up fleet managements are in the FM sector.
05 February 2018 | Dean Gurden
Most of us take the dramatic pronouncements of incumbent governments with a pinch of salt - no increase in VAT, jobs for all, certain dubious promises made during the Brexit debates, and so on.
But how seriously should fleet and facilities managers be taking the recent commitment by the British government to ban all new petrol and diesel cars and vans by 2040?
Well, if anything, those in the industry believe petrol and diesel cars will be phased out a lot sooner than 2040, with electric vehicles (EVs) rapidly taking their place. "It's so easy to underappreciate how quickly things are changing in this area," says Ian Featherstone, fleet advice manager at the Energy Saving Trust.
"They may still represent only a small percentage of new vehicle sales, but I think we could all be surprised by how quickly EVs become established. As soon as their cost gets even close to parity with conventional petrol and diesel, and vehicle ranges are a little bit higher than the very latest models, then there will be very little reason not to go for them."
But are fleet managers getting on board with the inevitable changes that are coming their way? According to Katie Colledge-Price, managing director of Carpendale EV Consulting, they could be doing more.
"I think there is still some reticence among them to go electric because the education isn't happening. Car manufacturers and government are telling the leasing companies to go electric, but a lot of the fleet managers don't really know anything about it," she says.
Fleet managers need to talk to people that have actually done it, and know the pitfalls and where things can go wrong, urges Colledge-Price. She points to the Energy Saving Trust (energysavingtrust.org.uk) as a great source of information. And Go Ultra Low (goultralow.com) also oversees clients that are introducing or using EVs and hybrids in their fleets right now.
Do FMs dream of electric cars?
In considering whether to go electric, always take a whole-life cost approach to the cost of the vehicles, counsels Jon Lawes, managing director of vehicle leasing provider Hitachi Capital Vehicle Solutions.
"That whole-life cost calculation - and the viability of going electric - will depend on the way the vehicle is used, and how and when the vehicle is charged," he says. "If the daily mileage is high, but the vehicle is not used for long-distance travel, the savings in fuel costs from switching to electric will be greater. Where the daily travel profile is up to 100 miles per day, and low-cost charging can take place overnight, then there is also no need to worry about battery life."
For vehicles with the appropriate mileage and journey profile, Lawes is adamant that full EVs are now a viable solution. And more powerful 40kWh batteries are being launched in spring on a number of full electric vehicles with official ranges in excess of 230 miles on a full charge.
Featherstone agrees that a whole-life approach is the way to go. In helping more than of 200 fleets of all sizes to explore EVs, he advocates the following steps. Initially, look for the right vehicle type for its purpose. Then look at appropriate vehicle ranges within that type. Then explore the whole-life cost of the vehicle while part of your fleet. Then before you go out and start buying the cars, look at where they can be recharged. Do the drivers have the opportunity to charge at home? Or do you have charging facilities on site? Will you have to install these? Finally, there is the issue of driver acceptance - you need to make sure that the drivers fully understand the vehicles and how to drive them.
Don't rush blindly into it. Use telematics specialists to find out the driving patterns and distances covered by your current setup. This will tell you how eligible you are for switching to EVs and the achievable cost-savings. And try to do a trial, advises Colledge-Price. "It's a really good way of seeing if the employees are ready to engage with EVs. Have them for a week, not half an hour. See how they get on with their commute and if it's going to work as their sales car, for example."
So what of those companies that have been there and done it?
"Moving towards ultra low emissions vehicles (ULEV) has been an incremental process for us that is now gathering more momentum," says Dale Eynon, director at Defra Group Fleet Services. "But where the installation of home charging has been relatively simple, the move to install more office and depot-based charging has been much more difficult.
"And don't think it will be easy to get people to switch to EVs, or assume that there is a wide range of vehicles to choose from, or that accessing public charging networks will be straightforward," he warns. "And charging your vehicles is still not as easy as it needs to be, with a lack of interoperability between the various providers and a whole raft of charging regimes that can often be very confusing and expensive."
Steven Lucas, transport manager at Novus Property Solutions, believes it is unlikely that many fleet managers will make the wholesale switch to EVs in the next two years.
"We completed a trial of four different EVs last year as part of our contract with Manchester University, which has charging points on site. We found that some of the vehicles weren't suitable for us because of the limits on the mileage per charge," he says. "We intend to move forward and lease one vehicle on a two-year basis following the trial and are reviewing opportunities to do the same on other sites over the coming years."
Lucas thinks that EVs are currently only feasible for servicing single sites with assess to a recharging infrastructure. "Having a van making multiple trips across different locations is just not practical as many can only travel around 40 miles per charge under real conditions in winter months. And while the government is set to increase the number of charging points as part of its wider infrastructure investment, I believe it will be a slow burn."
But he admits that there is a strong case for using EVs for certain projects, "especially as going electric can strengthen your brand among your clients and their customers, and also there are the reduced fuel and tax costs to factor in".
Which brings us to government initiatives to encourage the take-up of EVs. The upfront cost of buying each vehicle can be cushioned with its plug-in car grant (worth up to £4,500) and plug-in van grant (worth up to £8,000). Subsidies also exist for organisations installing charge points. The Workplace Charging Scheme offers vouchers worth £300 for each of the first 20 charging sockets installed, and there is a 100 per cent first-year allowance for capital spending on charge points, available until April 2019. Pure electric (zero-emission) vehicles with a list price below £40,000 also don't have to pay any vehicle excise duty, and other ultra-low-emission vehicles get a substantial discount in their first year. And for company cars, the lower the emissions, the lower the benefit-in-kind tax.
With all these incentives, how is the take-up of EVs looking? Figures from Hitachi Capital Vehicle Solutions' Future of Fuel Report show that 42 per cent of fleets already contain hybrid cars, and 13 per cent contain pure electric ones. It also suggests that fleets could save a collective £14 billion a year if they switched all vans and HGVs to electricity. And according to Go Ultra Low, electric car registrations in 2018 could reach 60,000.
Matthew Trevaskis, head of electric vehicles at the Renewable Energy Association (REA), is also positive. "Don't just be concerned with the immediate gain," he says, "because this is going to grow rapidly. Any fleet or facilities manager should be looking at their assets and sites now and asking how and where they could go electric and grow it over time."
To highlight the possible gains, Trevaskis cites working on a project where the NHS was looking to deploy electric pool cars. Fifteen Renault ZOEs were put into a fleet with charging on five sites. The cars were going out and coming back to a base or going between sites, so they weren't reliant on public charging.
"They could charge in an hour at lunchtime because the right kind of infrastructure was put in place. Those cars, at around a £500,000 investment, actually paid for themselves within three years and are now saving 12 nurses' salaries annually," he says.
Now if that's not a pretty compelling metric for EVs, I don't know what is.