ALD Automotive FLEET Industry forum: How to adopt an electric fleet strategy

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FLEET Industry forum: How to adopt an electric fleet strategy

Dispelling some of the myths surrounding EVs

Ranges are improving all the time as are RV and SMR rates, says ALD Automotive

Fleet panel

Alison Moriarty, Arriva UK fleet risk director

Stewart Lightbody, Anglian Water head of fleet services

Dale Eynon, Defra Group Fleet Services director

John Pryor, ACFO chairman and Arcadia travel manager

David Oliver, Red Bull procurement manager

About ALD Automotive

A global leader in mobility solutions, ALD Automotive provides full service leasing and fleet management services across 43 countries to a customer base of large corporates, SMEs, professionals and private individuals.

Sustainable mobility is at the heart of our strategy, delivering innovative mobility solutions and technology-enabled services to our customers, helping them focus on their everyday business.

As the UK Government ramps up efforts to improve air quality, fleet decision-makers are feeling more pressure than ever to make the switch to alternative fuel vehicles (AFVs).

Our experts can show how practical electric vehicles (EVs) and plug-in electric hybrids (PHEVs) are in a modern corporate fleet, giving you a better understanding of how they perform across a variety of driver profiles.

Our understanding of the challenges faced by EVs and PHEVs, and how they can help make a difference, will give you the insight required to integrate AFVs within your fleet.

For more information, download your free whitepaper at alduk.press/phev

What are the key topics for debate when decision-makers are considering electrifying their fleets? Our fleet panel members (above) have identified some of the main considerations and Fleet News asked Matt Dale, Head of Consultancy at ALD Automotive, to respond to some of the points they raised.

What are leasing companies doing to help support end-users by applying realistic residual value (RV) and service, maintenance and repair (SMR) rates for electric vehicles (EVs)?

At ALD Automotive, we have long been a champion of EVs and we promote the many benefits they offer when compared with the traditional internal combustion engine (ICE) – not only to clients but also within our own company car fleet.

One of the ways we are working with fleets looking to introduce an appropriate EV strategy is to dispel some common myths, including those around RV and SMR rates.

We listened to what the manufacturers had to say about SMR rates for EVs and set them accordingly, building that benefit in for the customer. That strategy proved to be correct. SMR rates have always been cheaper on an EV than an equivalent ICE vehicle. In particular, fears over costs relating to replacement batteries were unfounded. None of the vehicles on our fleet has required one.

RVs are usually based on historic performance, which is tricky with relatively new technology. Again, we’re more positive on RVs as it was felt there would be high demand in the used car market. Depreciation calculations were more aligned with the ICE equivalents which, again, proved more accurate and more beneficial to leasing clients than other industry calculations. Now, we set RVs for electric vehicles stronger than ICE counterparts.

The introduction of more models has created added market awareness. Increases in battery range have helped to stabilise values and increase vehicle longevity, all
of which will further improve RVs.

When will 300+ miles cars be widely available and at a price competitive with ICE models?

This has already happened with the launch of the Hyundai Kona. It has a 300-mile range and, at £36,000, it is available to order now. Most manufacturers plan to launch mainstream, competitively priced models with a 300-mile range within the next three years. The bigger question will be whether they can build enough to keep up with demand.

What are the downsides of owning electric? I want to be as upfront as I can be with my drivers about what they can carry and how they are used.

Currently EVs are not for everybody. Individual suitability depends on average journey types, commuting distances and total annual mileage.

We recently conducted some real-world research into journey profiles and EV use. It found that if a driver is using one of the many models that can comfortably cover in excess of 100 miles on a single charge, more than three-quarters of all journeys could be completed using purely electric power. With range improvements being made with each launch, it won’t be long before EVs can comfortably exceed 200 miles, meaning 94% of journeys could be completed using a single charge.

Of course, access to charging is essential. To keep pace with the growing number of EV drivers, we have doubled the number of charging points available at our Bristol head office. Also, a number of our own company car drivers are taking advantage of the Government home charger grant; others use a three-pin plug.

Charging does take longer than filling up with petrol and you can’t use an extension lead. However, driver habits will inevitably adapt as the technology improves. For instance, in future we could find that motorway service stations will cater for customers that stay longer while their vehicles are charging, with some offering virtual offices, improved café facilities and even gyms.

Again, myth busting is important if drivers are to embrace EV technology.
A few examples:

You can charge it when it’s raining!
It is no more likely to catch fire than an ICE vehicle.
They are quick – and not just the Teslas.
You don’t need a special driving licence to drive one.
It won’t cost £10,000 every time there is a problem with the battery.

Is there a different driving style to these types of vehicle?

To get the most out of an EV, drivers do need to learn how to drive and charge it properly. For example, they need to learn how regenerative braking works, realise that harsh acceleration will use the batteries quicker than smooth acceleration and also plan ahead about when and where the vehicle can be charged. These smart techniques aren’t just for EV drivers though, they’re equally relevant to drivers of ICE vehicles.

We have anecdotal evidence that EVs offer a more relaxed driving environment and a more relaxed driver is less likely to have an accident.

Is it correct that they cheaper to run than ICE cars given there is little servicing? What about the cost of insurance?

All vehicles need to be serviced. However, due to the reduced number of moving parts in an EV, servicing costs are considerably reduced. Also items like brake pads are used less because of regenerative braking.

Some manufacturers are now offering remote software updates so vehicles spend even less time in dealers.

There have been some circumstances where insurance companies were reticent to insure certain EVs, due to extended off-road time in the event of an accident, mainly due to lack of parts in the country. But even these rare incidences will cease as EVs become more mainstream.

Overall, the cost of an EV per mile is much lower than for an equivalent petrol or diesel model. We have seen WLTP results suggesting the cost for electricity is 75% lower than a petrol equivalent.

One driver has advised me that the battery deteriorates and therefore so does the range – how true is this?

To get the Government grant, batteries have to be warranted for a minimum of five years and retain 80% of their charge for this period.

Battery degradation is a natural occurrence. However, so too is clutch wear or burning oil in an ICE vehicle.

An EV battery is made up of individual cells and on the majority of vehicles these cells can be replaced one-by-one, negating the need to replace the whole battery. Maybe manufacturers can’t provide a quote for the cost of replacing them because they’ve never needed to.

For more details email: ukmarketing@aldautomotive.com or visit www.aldautomotive.com.