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Will we soon see fleets of electric cars on our roads? Electric cars seem to be everywhere at the moment; in the news, in the motoring forums and finally on our streets. With major car manufacturers such as Ford, VW and Honda seemingly pinning their futures on electric cars, and with the UK predicted to have more electric car charging points by 2020 than petrol stations, the momentum behind electric cars does seem to be building. The latest sign of mass adoption came last month when Uber rolled out an electric taxi fleet in London. But will they make it into the famously conservative fleet sector?
There has been one sector of the motor market that has, as yet, remained largely unmoved by the draw of electric cars and that’s the fleet market. Traditionally fleet managers and fleet drivers have been loath to entertain the notion of electric fleets on the grounds that electric cars didn’t have the required range or speed and because their purchase costs were prohibitively high. But with electric car prices now comparable with standard fleet cars, battery life and vehicle ranges hugely increased and fleet tax levies largely bound up in emissions is the day of the electric fleet about to dawn?
Leaving aside the obvious environmental benefits of reducing emissions by up 40% compared to standard cars, the main benefits of an electric fleet are financial. In terms of fuel costs savings the numbers are frankly staggering. According to a recent British Vehicle Rental and Leasing Association (BVRLA) report, electric cars cost between 2p and 4p a mile to charge (based on cars to doing journeys of around 100 miles per day). This compares to around 12p per mile for the equivalent diesel car – a saving that is surely music to a fleet manager’s ears if not that of the finance director. The F.D. will also find the fact that there are enhanced capital allowances available for electric fleet vehicles hugely attractive. These means that companies can relieve the cost of an electric car or van against taxable profits in the year of acquisition.
Of course electric cars do cost slightly more and that could sour of F.D.’s opinion of electric cars for the company’s fleet. However, with grants of up to £5,000 off the price of an electric car, 20% off the cost of an electric van, and grants available for up to 75% of the cost of installing a charge point, their mood could quickly return to sunny…
While such savings may mean little to fleet car drivers, the prospect of not having to pay company car tax as electric vehicles are exempt from it, will. Mini-fleet owners, particularly those with vans, will also be cheered by electric vehicles exemption from van benefit charge, fuel benefit charge, fuel duty, vehicle excise duty and the congestion charge.
Fleet insurance costs are obviously a big concern for any fleet manager. At present, given the newness of the market and the level of uncertainty as to what could go wrong with electric cars, costs are slightly higher than for standard fleet insurance. That said as adoption grows and more insurance companies offer electric fleet insurance, so these costs will come down fast. The best thing to do if considering electric car insurance – be it for a fleet or personal use – is to talk to an insurance expert.
This remains an uncertain question for many fleet managers. Anecdotally fleet drivers seem to have the same questions as standard drivers when it comes to electric cars – range, cost, ease and availability of repair, speed and safety. Though given that 43% of fleet managers believe that their drivers would accept driver-less cars – the natural partner of electric cars – and given the personal savings outlined above, it would seem likely that from a driver’s perspective electric fleets have little standing in their way.
Given the cost benefits of electric fleets to companies large and small, the government grants, the environmental benefits, the improvements in technology and wider public acceptance of electric vehicles, it seems clear that electric fleets are on their way, and soon.
If you would like to know more about electric vehicle insurance or would like some help getting the fleet insurance that’s right for you, then please contact us by calling us free on 0800 977 6037, email us by clicking here or get a no-obligation fleet insurance quote here.