Moving Electric for Small and Medium Fleets
It is an uncertain time for businesses. The road transport sector is immersed in a critical transition as passenger and freight transport businesses are taking action to improve sustainability and reduce energy demand. This is due to new data being released on climate change and the consequent government energy efficiency plans. These plans involve providing financial incentives to change to electric vehicles and improving the infrastructure around electric transport in order to decrease carbon emissions.
The electric deployment process should be set in motion over the next 15 years. It is important for small and medium fleets to make the move to electric vehicles and have a positive impact on both their emission levels and their productivity.
In order to embrace these new changes, strategic planning is essential. In this article we will take you through three of the key benefits of moving to electric.
1. Financial Benefits
For all businesses it is important to reduce costs and maximise profits, but it is especially important for small and medium fleets in order for them to continue the acquisition of vehicles and thereby expand the fleet and company. Now, they also need to satisfy a new requirement: demonstrating their capacity to be sustainable and environmentally friendly. The appeal of moving your fleet to electric is partly to do with the reduced costs of operating an electric fleet, as well as the environmental benefits. This involves applying new technology, embracing emerging trends and paying for new vehicles and the increased energy costs associated with at-work charging.
One of the main fiscal incentives that has been implemented is the reduction in BIK (Benefit-in-Kind) company car tax. In April 2020, BIK company car tax for zero emission vehicles was reduced to 0% for the 2020/21 tax year, rising to only 1% in 2021/22 and 2% in 2022/23. This is more affordable than fossil-fuel powered cars which has an average of 24% BIK.
The UK government offers rebates for the purchase of new zero emission vehicles:
- 35% up to £2,500 for cars valued under £35,000.
- 35% up to £3,000 for small vans
- 35% up to £6,000 for large vans
- 20% up to £16,000 for trucks, limited to 10 per customer.
The UK government also offers grants for installing charge-points on fleet bases through the “Workplace Charging Scheme”. This scheme offers businesses up to 75% of the purchase and installation costs for chargers, with a maximum of £350 per socket.
A further day-to-day saving is the cost of running electric vehicles. They can cost as low as 1p per mile depending on the model, as opposed to 8-10p for fuel efficient fossil-fuel vehicles. The absence of internal combustion engines and therefore fewer moving parts which require less maintenance and replacing, is especially useful as the vehicle ages. However, electric vehicle batteries will wear out and will need maintenance or replacing, but data shows that the increase of electric vehicle sales is driving cost reductions in batteries.
Nonetheless, these financial benefits lead to long term savings, making electric vehicles an economical development for a business.
2.Building Up your Business’s Reputation
Consumers make decisions on where to purchase from based on multiple factors. New data shows that consumers nowadays are concerned with the environment and are more inclined to purchase from a company which implements corporate sustainability. Consumers are trying to be responsible citizens in this new eco-friendly future which we are all trying to achieve, and they expect the same from corporations.
Sustainability has become a main commitment for companies who want to increase their competitiveness. This is because they are implementing something which is increasingly important to consumers: Brand trust.
As mentioned previously, consumers are concerned with environmental issues as well as other social responsibilities. In order for companies to build a good reputation, they need to concern themselves with improving their social stance. They also need to ensure they provide transparency in their dealings and supply chains as consumers want to interact with brands who align with their beliefs. One of the main ways businesses can display their commitment to improving their sustainability is through moving their vehicles to electric. This shows consumers that you are reducing your carbon footprint whilst also aligning with government schemes to improve the country’s sustainability.
A good reputation attracts new and returning customers, as well as investors and community partners. Therefore business success is at least partially rooted in having a good reputation. As a small or medium fleet owner, creating a loyal customer base is essential to business success and expansion.
Moving to an electric fleet not only benefits your business, but also the health and safety of your employees. Commitment to reducing carbon emissions has been proven to have a positive influence on employee engagement.
Many employees are keen for businesses to take environmental action with the climate emergency becoming more apparent. Research conducted by Go Ultra Low found that 33% of employees were more environmentally conscious at home and 69% of employees thought that their employers could do more to make their workplace more environmentally friendly. Alongside this, they found that 70% of employees thought that their employers should switch to electric vehicles, with 63% saying they would be happy to drive them.
Introducing electric vehicles to your fleet has additional day-to-day benefits for your employees. The implementation of new technology associated with electric vehicles which helps you manage your electric fleet can improve driver experience, with better route planning to reduce driving times, lower commute costs, reduced risk of breakdowns and so on; all of which improve the management of range anxiety.
Although it should be noted that there is often fear of change amongst employees and moving quickly to electric vehicles could be too much for them to handle. It is important to communicate with staff and ensure that they are kept up to date with the developments within the company. Read our guide on managing social relations when introducing telematic to your organisation to find out more.