The key question for many is - what are the costs involved?

But, the clock is ticking. In the last six months, research has shown that some 20% of European fleet managers have asked when a carbon-neutral fleet is realistically achievable.

Why the urgency?

EU legislation is increasingly penalising those who continue down a fossil fuel route and rewarding those who opt for electrification.

As a consequence, those who interact directly with car policy and taxation, such as HR Managers, face pressure from three directions.

Firstly, pressure from senior management keen to complete carbon-neutral projects within an allotted time span.

Next, from company car drivers who want to reduce their carbon footprints, resulting in lower Benefit-in-Kind tax bills.

Then there is the legal framework, with national governments offering corporate and personal tax incentives for EVs, but increasing penalties for fossil fuel emissions.

And finally, European car manufacturers face crippling fines if they do not reduce the total CO2 output of their model range – leaving them with little option but to pursue an electric route to cut their carbon emissions. By the end of this year alone, EU carmakers will have launched 35 new EVs and 100 PHEVs.

What should HR and other managers do to try and discover the optimum route to an electric, carbon-neutral fleet – at the same time, meeting the needs of their management and drivers while complying with all the latest regulations and legal framework? 

Factors to consider

Electrification means shuffling the cards of the traditional elements influencing your car policy, to the extent that we could be actually playing a different card game, with a number of new rules to consider.

New rule 1 - Electric cars

EVs and PHEVs (Plug in Electric Hybrids) are really “all-new” vehicles - which means that the old rule of one-size-fits-all may no longer work, due to issues such as range anxiety and charging infrastructure.

Instead, there will need to be an increased focus on indepth driver profiling, not just by driver job grade, to identify those for whom EVs may be suitable.

New rule 2 – Lease rates

Funding and SMR (service, maintenance and repair) costs look different for EVs compared to fossil fuel vehicles, with typically higher front end prices but lower servicing costs. Uncertain residual values force rates up – at least initially – until more models become available.

New rule 3 – Charging infrastructure

An adequate and reliable charge point infrastructure is vital to ensure a fleet of EVs can run effectively – which may include workplace or home charging overnight. So key to the success of electrification is selecting a good contractor with a flexible approach.

New rule 4 - Fleet management costs

New rules covering driver mileage profiling, eligibility, and reallocation of vehicles and home charging stations – to name but a few – need to be considered.

What to do next?

Our “How-To Guide to Electrification” offers 10 straightforward steps to successfully going down an electric route.

Step 1 – Data & policy

The creation of a budget baseline, supported by data analysis and current policy rules.

Step 2 – Driver profiling

Segmenting drivers based on their mileage and job needs to identify where on the fleet EVs may be appropriate.

Step 3 - Existing reference cars

The identification of key models per job band, related to budgets, taxation and supplier arrangements.

Step 4 – Existing Total Costs of Ownership (TCO)

This step involves calculating the actual TCO of the running fleet.

Step 5 – Introducing new EV reference cars

Configuring new key EV models based on driver profiles and job grades to find the new optimum mix.

Step 6 – Obtain quotes and new TCO

A Request for Quotation (RFQ) is sent out to the market to determine the new TCO of the fleet.

Step 7 – What-if? scenarios

Our modelling tool, TCMPlus, creates multiple forecast scenarios based on a mix of energy types and mobility programs.

Step 8 – Comparison of old versus new

An optimal scenario is selected and compared with the TCO of the running fleet.

Step 9 - Roll-out plan

A detailed roll-out plan is put in place, tailored to country needs and aimed at achieving management buy-in.

Step 10 – Implementation

We begin a series of local implementations supported by the fleet experts at Fleet Logistics Group, Europe’s largest independent fleet management partner, to connect the new guidelines with existing stakeholders.

If  you wish to find out how Fleet Logistics Group can help you go down an electrification route for your fleet, please contact Thibault Alleyn at +32 475 705 755 or email talleyn@fleetvision.biz