Electric vehicle uptake is growing – but could we be doing more?
The 26th UN Climate Change Conference of the Parties comes at a time when the UK has pledged to reduce carbon emissions by 78 per cent by 2035 – part of which is to end the sale of new petrol and diesel vehicles by 2030.
To encourage the swift adoption of electric vehicles in the company car sector, the financial incentives for both companies and company car drivers are very appetising.
Yet Scott Durno, from leading contract hire and fleet management specialists, Grosvenor Leasing – Scotland, feels more needs to be done to build confidence with companies and drivers that an electric vehicle is a sensible choice.
“At Grosvenor Leasing – Scotland, over half of all new company cars we’re now delivering have electric capability,” said Scott, “and this is largely down to the financial benefits to both company and driver.
“However that leaves just under 50 per cent of orders still being petrol or diesel and it begs the question of why more company car drivers aren’t yet going electric?
“At Grosvenor Leasing we can see that whilst it’s growing fast, there is still not the complete range of EVs available, nor the confidence in battery ranges, for companies to be certain that their employees will be able to perform their duties in all electric cars and vans.
“As a result we’re seeing the uptake of EVs being very strong for your general company car driver who has no specialist requirements – but less so for drivers who need to carry a lot of equipment and use their vehicle as more of a workhorse.
“In addition, we’re also finding that there is less choice of smaller EVs in the lower grades of a company’s vehicle choice lists. This means those drivers who are allocated a small to medium sized car are leaning towards another internal combustion engine model in order to get the most suitable and desirable model based on their entitlement.
“When it comes to charging points, many drivers don’t have the facility to charge an EV at home, and drivers who we talk to feel there is a lack of communication from their local authorities and councils regarding the local charging infrastructure plans.
“To find out this information currently you need to search on the local authority / county council websites and then digest often long, detailed strategic documents – so you really have to dig around a bit to work out what’s going on.”
According to Durno, it’s for this reason why Grosvenor Leasing’s 0Zone team, which helps companies make the transition to electric vehicles, is so important. “Our 0Zone team works with customers to carefully map out vehicle usage within geographical areas and offer a very realistic assessment of where electric vehicles can be used, and where perhaps a plug-in hybrid would be better – and this can include the planned expansion of the charging infrastructure.
“A good example of this is Glen Glenmorangie Whisky. When they began striving towards a zero-emission fleet policy, Grosvenor’s 0Zone team looked at 4×4 off-road options for drivers who struggled with harsher weather conditions in more mountainous areas.
“We also mapped out the availability of charging points in the key locations where their drivers travelled, and the number of servicing garages for ultra low emission vehicles (ULEVs) and EVs, before making our final recommendations. “We also help companies decide which funding method is best suited to electric vehicles, and we’re finding that the majority are opting to lock down their costs and implement stringent management controls as they prepare themselves for the EV years ahead.
“As such, contract hire is by far the most popular funding choice for electric vehicles as companies seek fixed cost budgeting – mainly because it’s very difficult to predict the future resale values of electric vehicles in three to four years’ time, particularly when the economy is so unpredictable.
“Not wanting to take the risk on things like depreciation and running costs of what is a relatively unknown quantity, they subsequently choose contract hire for their EVs for peace of mind motoring.
“An additional consideration is that the purchase prices of electric cars are generally higher than equivalent petrol or diesel models, yet in comparison the monthly rentals are very competitive which is why it’s a good time to choose contract hire as part of your electric vehicle strategy.”
One company that took the initiative to move to contract hire ahead of the switch to electric vehicles is Salvation Army Trading Company.
It was looking to future-proof its fleet with improved efficiencies, better budgeting and professional fleet management and the decision to sell its owned fleet to Grosvenor Leasing as part of a sale and leaseback was all part of a strategy to move to greener vehicles.
Weetabix is another well-known brand to move to contract hire with Grosvenor Leasing through a sale and leaseback and is also now driving towards a zero emission fleet thanks to its ultra low emission vehicle policy.
“For companies that own their vehicles, now is a good time to consider moving to contract hire for your electric vehicle orders,” continued Scott.
“However, if ownership remains your preferred acquisition and funding method, the Grosvenor Group’s specialist fleet management business, Interactive Fleet Management, is an ideal solution to manage that transition to alternative fuels for you and the associated costs.
“Within The Grosvenor Group, we can also offer market leading personal contract hire (PCH) and salary sacrifice solutions, both of which can support a move to greener vehicles.
“Our personal contract hire team, in particular, is extremely busy supporting drivers who have moved out of their company car scheme and taken cash instead – and this shift to PCH is being driven, not by the employees themselves, but by HR directors, finance directors and fleet managers who are keen to capture that moment when the cash allowance is provided.
“This is because when drivers choose cash instead of a company car, employers end up handing over an amount of money every month and that money is clearly meant to be for the individual to fund a vehicle that enables them to continue to do their job.
“Yet it often ends up being used for other things, leaving the employee with a vehicle that’s old, poorly maintained, higher emission or not fit for purpose.
“Whereas if, at the time the cash allowance is provided, a PCH solution is in place within the business these cash drivers can move from company car to PCH car, replicating the benefits of a company vehicle, with low deposits, maintenance cover, road tax and breakdown cover. This has widespread benefits for both the individual and the company.”
As the UK’s largest privately-owned contract hire and fleet management specialist, the Grosvenor Group has won multiple awards for the quality of its support. Grosvenor’s 0Zone team, which is dedicated to helping car and light commercial vehicle fleets with move to EVs, is made up of three key areas:
- Environmental: how to drive down CO2 levels as part of a zero-emission goal;
- Operational: how ULEVs and EVs fit into your operational requirements and business needs;
- Financial: the financial implications of moving to alternative fuels, including whole life costs, taxation, NI and other key considerations