Outsourced fleet management to play key role in the move to electric vehicles
Scott Durno: “Companies are looking for external support as they have very little expertise in how to deal with electric vehicles”
Demand for electric company cars is growing fast, and for most companies it is a venture into the unknown.
Historical data on the true running costs of electric vehicles (EVs) is thin on the ground. Data on their resale values in three to four years’ time will remain sketchy until large volumes have been sold through the used car market, and we are still in the early stages of comparing the actual cost of servicing and maintaining EVs compared to petrol and diesel cars and vans.
According to Scott Durno, who heads up The Grosvenor Group’s contract hire and fleet management business in Scotland, it is this uncertainty that is causing many companies to seek professional fleet management support.
“Our 0Zone team, which advises companies with cars and light commercial vehicles about the move to ultra-low emission (ULEV) and electric vehicles, has never been busier,” said Scott.
“We are also seeing a rise in demand for outsourced fleet management, because companies who buy their vehicles, and manage them in-house, are now looking for external support as they have very little expertise in how to deal with electric vehicles.”
The Grosvenor Group comprises four key elements. Grosvenor Leasing is a market leading contract hire company with a 40-year pedigree; Interactive Fleet Management is a specialist fleet management business; Grosvenor Personal Leasing supports company drivers who have opted out of the company car scheme; and Grosvenor Salary Sacrifice provides a salary sacrifice solution for plug-in hybrid and electric cars.
Working across all areas, the 0Zone team provides specialist advice and support in developing ultra-low emission and electric car policies and choice lists, as well as advising on the financial and operational aspects of moving to ULEVs and EVs, ranging from tax and financial modelling through to charging options and fuel/EV charge reimbursement.
With many businesses having little experience of electric vehicles, Scott explained that many companies begin by seeking advice from the 0Zone team, but then turn their attention to the ongoing management of these vehicles and the level of risk involved in doing this themselves.
“Operating a vehicle fleet, however large or small, is an expensive undertaking,” continued Scott. “However if you have had a petrol and diesel fleet for many years you probably have a pretty good feel for future budgeting and the amount of time that similar vehicles will take to manage based on past experience.
“With electric vehicles, we’re almost starting from scratch again and we are helping companies review their cost base, and look at the types of cars and vans they operate that could be replaced by ULEVs and EVs. Getting this right is important, as this ‘choice list’ will determine the future cost base of the fleet, and we use whole life costs to provide accurate financial forecasts of ULEV and EVs during their time on fleet.
“Facing the prospect of a growing plug-in hybrid (PHEV) and battery electric vehicle (BEV) fleet, many companies then consider the maintenance – particularly where they are paying for, and managing, the servicing, maintenance and repairs themselves.
“It’s rare for a company to employ someone with vehicle maintenance expertise making it very difficult for them to know if the invoices coming in from garages for work carried out are fair, or whether the work was required in the first place.
“This is accentuated by the arrival of BEVs as companies have little or no previous experience of their servicing, maintenance and repair costs – giving them nothing to compare invoices to.
“To give a flavour of the potential savings that our maintenance management team could achieve, we often ask organisations to send us a selection of recent invoices and we will highlight where there has been overspend which, when multiplied across an entire fleet, can turn into a vast sum of money.
“We have also spent many years understanding electric vehicles and investing in extensive training of our maintenance teams, which is why we are seeing a rise in the numbers of companies placing the management of their EVs in our safe hands as it could deliver very significant long-term savings indeed.”
For companies that have decided, with the advent of EVs, they no longer wish to take that risk of ownership, a sale and leaseback is also a good option.
This is where Grosvenor Leasing quickly values the vehicles based on their age and mileage, then provides contract hire rentals to lease each vehicle back.
Grosvenor then buys the fleet, giving a cash injection, and with no disruption to drivers the vehicles move to contract hire with the benefit of fixed monthly costs, a removal of risk, less administration and access to a range of additional fleet management solutions.
Any electric vehicle already on fleet, and those added afterwards, are leased with fixed costs and no risk, giving companies peace of mind as they transition their fleet to alternative fuels.
Scott concluded by advising companies that this is not a time to be hesitant, as it is important to embrace electric vehicles and address any concerns about operating them, rather than sit back.
“Any company that has drivers still choosing petrol or diesel cars in 2022 and beyond should now be questioning whether this is a good idea for both the driver and the business – and, of course, the environment.
“A company vehicle delivered in 2022 will remain on its fleet for three to four years, and during that time we are going to see a very dramatic shift to electric vehicles, a rise in the number of clean air zones, a strengthening of the charging infrastructure, a growing social conscience towards the planet, and a rise in the cost of operating combustion engine vehicles.
“It’s for this reason that it’s so important to begin the process of making the transition, and our 0Zone team can help with impartial and highly-qualified advice and support that has already assisted many companies in making this important change.”