Developing your EV or e-LCV fleet transition plan

Assess your fleet and charging requirements and bring your business on your journey in three steps

Whether you’re running a small operation or a fleet of thousands of cars, vans and trucks, it’s likely you’ll have already made a start in thinking about or moving forward your transition to electric vehicles.

However, with so much to consider – the financial impact of rising fuel prices and low or no emission zones, your existing car or LCV lifecycles, which EVs will best serve your business model, how much to increase your energy supply by, what kind of chargers to install, how to involve and persuade other key people within your organisation – it can be a daunting task to decide which steps to take next.

We thought it might help to start from the beginning. If you’re further on in converting your fleet, you can scroll to the steps that are most helpful to you.

• Step1: Assess your fleet

• Step 2: Assess your charging requirements

• Step 3: Bring people in your organisation on the journey

Step 1: Assess your fleet

If you are an urban delivery company, you’ll have very different needs to a council or a national outfit that has cars and LCVs in operation for a range of purposes.

Whatever the shape or size of your business, understanding which of your vehicles are ripe for conversion versus those that you might transition more slowly can be a good starting point.

a. Use existing data to help you make your assessments

Understanding your fleet’s movements through telematics and other data is the norm for most businesses. Whether you decide to run a pilot (see Step 1b below) or you’re at the point of evolving your transition plan, using any existing information you have at your fingertips will help you figure out which vehicles you might move to electric and at what point.

Getting to grips with the total cost of ownership (TCO) of your ICE fleet versus what replacement EVs may cost (see Step 1f below) – together with your charging requirements (see Step 2: Assess your charging requirements) – will help you make a more comprehensive analysis.

b. Develop a small trial or larger pilot

Trialling one or two electric vehicles or running a larger pilot is something that many businesses are in the process of starting or have already been doing to get a sense of how they might fit into their operations in the longer term. In fact, British Gas ran a pilot of twenty-eight e-NV200s with Nissan as far back as 2013. Hailed ‘the largest ever electric commercial vehicle pilot’ at the time, Nissan itself had been globally testing the van at this stage before its official release onto the market.

c. Consider trialling like-for-like vehicles

The fact that the Electric Vehicle Database is showing one hundred and sixty five recently added electric cars and vans for 2021 and 2022, means there may be a like-for-like choice for some of your fleet cars or LCVs, such as the Volkswagen ID.3 Pro Performance, Renault Meganne E-Tech, Citroen e-Berlingo or the Vauxhall Vivaro e-Life.

Trialling vehicles you and your drivers are already familiar with might feel a little more comfortable than trying completely new marques. Trading existing car or van models for their electric counterparts with your existing dealers or leasing companies may also feel like a manageable way forward for your business.

d. Stay abreast of government plug-in car, van and truck grants

Keeping an eye on the government’s plug-in grants and eligible car, MPV, van and truck models in the scheme may also help you to consider the best vehicles for a pilot or longer-term for your fleet. Particularly as the van and truck grant availability has been extended to 2024/25 and drivers with standard licenses can continue to drive electric goods vans at the higher weight limit. In addition to this, the weight limit for the £5,000 large van grant has increased from 3.5 to 4.2 tonnes, and the entry point for the £16,000 small truck grant is now 4.2 tonnes.

e. Take your replacement cycles into account

Of course, there will be your replacement cycles to consider. Fleet News reported in 2020 that the average fleet vehicle replacement cycle in their Fleet200 survey was four years or 80,000 miles, with the longest lifecycle belonging to Devon & Cornwall and Dorset police force with their fleet of cars and vans both on a ten-year lifecycle. In terms of commercial fleets, Royal Mail’s LCVs are on a nine-year replacement cycle with John Lewis’s vans on an eight-year cycle.

Royal Mail first piloted e-LCVs in 2017 and announced its first all-electric delivery office in Bristol in 2021 to coincide with the launch of the city’s Clean Air Zone. This was closely followed by a pledge to roll out 3,000 electric vans in addition to its existing 300 EVs, with plans to deploy these in ultra-low emission zones and green cities initially.

With these longer lifecycles in mind, it is understandable that some transitions are happening slowly, with fleet and operational managers potentially waiting for more models to become available and market growth to drive a reduction in the initial outlay of electric vehicles. Prices may also come down as manufacturers’ own development costs even out.

In stark comparison, Commercial Fleet reported in early 2022 that some fleets who purchase their vehicles are worried that the residual values of petrol and diesel cars and vans could fall substantially from 2025. That means if they buy internal combustion engine (ICE) vehicles now, what they might be worth when it comes to disposing of them between 2026 and 2028 has become a risk because of it being so close to the ban of new sales of these vehicles. This is leading to some fleets choosing to transition to electric sooner because they feel it is a safer bet in terms of residual values.

In January 2022, there was a 47.3% uplift in the plug-in hybrid car market from the previous year and a 130.6% uplift in battery electric cars (BEVs), taking BEV market share to 12.5% from 6.9%. In the LCV market, there was a 26.9% downturn in year-to-date sales across all vehicle types. However, battery electric LCV sales were up by 21.4%.

Understand the potential total cost of ownership of ICE versus
electric vehicles

You may or may not be surprised to learn that the total cost of ownership (TCO) of electric cars is already comparable to petrol and diesel vehicles. The results of a recent EV TCO study, conducted by Lease Plan across twenty-two countries, showed that the electric Volkswagen ID.3 had a 1% lower total cost of ownership than the internal combustion engine (ICE) Volkswagen Golf.

It shows that while depreciation and interest were 20% higher with tyres 57% and insurance 12% more expensive in the ID.3, management fees were 11%, electricity 50% and taxes 59% less expensive.

Where you might be looking to pilot or replace a fleet of up to 1,000 LCVs per year, the plug-in grant, which has just been extended to 2024/25 for vans and trucks, may still help to bear a sizeable portion of your initial outlay. With significantly lower running and maintenance costs, the total cost of ownership could balance out sooner than expected.

Your TCO evaluation for each vehicle type should take into account:

• Purchase/lease cost

• Insurance and taxes

• Plug-in grant

• Depreciation/residual value

• Service, maintenance and repair (SMR)

• Average and maximum daily distances

• Daily clean air, low emission or congestion zone charges

Get some expert advice and support

If you feel you need support with assessing your fleet, consulting with experts like bp pulse will help you consider all of the points within this step. When it comes to calculating your total cost of ownership, our team will also model different charging ecosystem options in your projections.

Step 2: Assess your charging requirements

We appreciate that when it comes to evolving your electric fleet, assessing your charging requirements can be a daunting task. For example, knowing where to begin in terms of installing chargers on your own premises, assessing whether to install home chargers for your drivers or equip drivers with an on the go subscription.

a. Use existing data to help you make your assessments

Your existing telematics and other fleet data can provide you with clarity around the charging ecosystem that might benefit your business, vehicles and drivers the most.

For example, overnight electricity rates are often more cost-effective if drivers are taking their vehicles home. For those driving shorter distances, a single overnight charge at home or at your depot could last them two or three days if they do not need to travel further than the range of the vehicle they are driving.

Understanding the behaviour of different elements of your fleet will help you to run a feasibility study (see Step 2b below) and decide on the best charging network for your business:

• Average and maximum daily distances

• Duty cycles

• Type of cargo – eg none/sales materials/goods/tools & equipment/people

• Type of journeys – urban/suburban/major or rural roads

• Number of depots/offices or other premises

• Average and maximum dwell times while on the road

• Average and maximum dwell times at a depot(s)

• Average and maximum dwell times at an office

• Average and maximum dwell times at driver’s home

b. Deliver a feasibility study and site survey to help futureproof your charging solutions

Some businesses are so bought into the concept of going electric they are happy to quickly replace vehicles and buy chargers off the shelf. While this can work for some, taking the time to consider all of your options and steps to futureproof your charging solutions are more likely to benefit your business and drivers in the long run.

It is important to deliver a feasibility study and, where relevant, site survey(s) using the data you’ve collected in Step 1a-g and Step 2a. Working with an experienced partner like bp pulse will help you to include all the relevant people within your organisation (see Step 3 below) to develop a full picture to help you, your senior team and Board consider your options.

Initial feasibility considerations are likely to include whether it is most cost-effective for your drivers to charge at home, at your premises or on the road, taking into account fluctuating energy costs and whether utilising cost-saving subscriptions for electric fleets and mixed ICE and electric fleets will help as you transition over.

Where feasibility shows that on-site charging is a viable option, you or your partner can then deliver a site survey – we offer one complimentary survey. This will be vital if you apply for any Workplace Charging Scheme grants.

Your expert advisor can then help you contact your local distribution network operator (DNO) – the company licensed to distribute your electricity. This is to check your current supply and whether you need more capacity to charge your fleet. Some businesses prefer to turn on enough projected capacity to roll out their entire electric fleet, some prefer to start in smaller increments.

Modelling potential charging behaviour on-site is important and will go on to form the basis of your installation design plan. For example:

• Are your current parking bays large enough to facilitate charging?

• Do they allow for two vehicles to plug in either side of a charger at the same time?

• Will there be enough spaces available at key dwell/charging times?

• Do you plan to introduce your own charging tariffs for visitors or the public to offset fleet charging costs?

• Do you plan to install renewable energy through your own solar or wind facilities and/or V2G technology to sell electricity back to the grid?

An expert team like bp pulse can run through all the fleet data you’ve collated together with the feasibility and survey findings to help you establish EV savings compared to your existing ICE fleet, for example:

• Cost per mile

• Cost per bay

• Cost per vehicle

• Carbon offset

In terms of carbon offsetting, while the government target is to ban new ICE sales from 2030, some businesses are choosing to offset in increments which would align with making a slow transition to EV. A large fleet for a core delivery business might account for 70% of its emissions. As an example, they may choose to offset 25% by 2025, 50% by 2030 and 100% by 2040.

c. Deliver a charging trial to complement your vehicle strategy

To coincide with the roll-out of your fleet vehicles, it can be helpful to run a charging pilot, especially given your business could be eligible for up to £14,000 (up to £350 per socket and up to 40 chargers) with the government’s Workplace Charging Scheme. What some people are unaware of is that you can claim up to the full amount, but then slowly roll out the installation of your chargers.

That means you could choose one or two sites, like a depot and an office car park, to trial the full process of planning and installing chargers and management software, and gather data on potential usage for when you roll these out further.

If you run a smaller operation, your business could still be eligible for up to £350 per socket. You might start with one charger and then add more once you’ve got to grips with it.

Likewise, if you’re planning to subsidise your drivers’ home-charging costs, while the government’s Home Charge grant is no longer available for homeowners, again, you could claim up to £350 per charger for employees who own flats and have off-street parking.

A partner like bp pulse will apply for any grants on your behalf and also deliver a free site survey to support your Workplace Charging Scheme application.

Having ultra-fast facilities like bp pulse’s 150kWh chargers available may provide the initial infrastructure you need to see how moving a small sample of your fleet over to electric works for you before investing in a wider ecosystem that includes charging on your premises.

Trialling on the go charging subscriptions and any effect on duty cycles and your business model can also help with your longer-term modelling.

Step 3: Bring your people on the journey

When it comes to transitioning your fleet to electric, there is generally a wider team of experts within an organisation to collaborate with, so you can get the very best out of your early deliberations and modelling – and ultimately have as smooth a transition to electric as possible.

For example, your transition team might potentially consist of the following managers or teams:

• Fleet management

• Finance

• Procurement

• Workshop (maintenance) management

• Energy transition

• Property management

• Facilities management

• Drivers

• HR

As mentioned in Step 2, your expert partner should ideally consult with these parties as early as possible and include them on your transition journey at every stage.

Drivers, in particular, may have anxieties at the prospect of moving to EV. Having to get to grips with a completely new type of vehicle while being required to stick as closely as possible to particular route timings or duty cycles can take some getting used to.