Is now the time to go green?

AFVs reign supreme

The number of Electric Vehicles (EVs) on British roads is higher than ever before, charge points are popping up at petrol stations and other public spaces up and down the country and car shows are dominated by manufacturers showcasing the latest in EV technology.

Meanwhile the noise around vehicle emissions has intensified, with the government announcing plans to roll out clean air zones across 5 major UK cities by 2020. Other initiatives such as the Mayor of London’s ‘T-Charge’ are also gathering pace, which is likely to encourage an uplift in low emission vehicles within the next 3 – 5 years. Around 40% of companies expect to see an increase in the number of hybrid and pure electric cars in the next 2 years*.

The Alternatively Fuelled Vehicle (AFV) is no longer purely the domain of the innovator and green champion. A conveyor belt of new models are coming to market, all with their own unique features which cater for a wide variety of journey needs. And government grants mean that, although still perceived to be more expensive than their petrol and diesel equivalents, these types of vehicles are becoming increasingly affordable for the public.

But it’s businesses that appear to be leading the way, with figures published by the Go Ultra Low campaign showing that 70% of electric cars registered in the UK in the first 10 months of 2016 went to registered companies. The benefits EVs can offer business fleets are becoming more widely known, such as the positive impact they can have on a company’s environmental footprint and even the bottom line.

Making the leap

No matter how large or small your fleet, there are a number of things you’ll want to consider when choosing to adopt AFVs. We’ve outlined a couple of the big ones below:

You don’t need to break the bank - Understanding the Total Cost of Ownership (TCO) of AFVs will allay the fears of any Finance Director – this is the total cost of the vehicle over its entire lifecycle.

The initial investment, particularly for pure electric vehicles, can be difficult to palate. However, while the direct comparison between AFVs and their petrol or diesel equivalents doesn’t necessarily result in a lower TCO, it is often less than you might expect. And the tax savings implicit with this type of vehicle mean that you can considerably reduce your employees’ Benefit in Kind (BIK) obligations, with little to no extra cost to your business. This means you can keep your employees happy, while satisfying your company’s green agenda.

For example, the TCO of a BMW 3 Series Saloon Petrol 330e 2.0 PHEV M Sport Auto over a 48 month period is marginally less than that of its diesel equivalent, the BMW 3 Series Saloon Diesel 320d 2.0 M Sport Auto - £25,894 and £27,153 respectively**. However, the average monthly employee BIK obligation is £159.44 less for the PHEV compared to the diesel model.***

Empower your drivers - Research from the Go Ultra Low campaign shows that company car drivers are, in fact, calling for AFVs, with 69% saying they would go electric if their employer offered plug-ins. This figure could be increased if employers offered suitable education and training. With a vast array of AFV options available, it’s worth calling out the individual benefits and drawbacks of each. This means drivers can make an informed decision about which vehicle is most suitable for them, whether that’s an AFV or not.

And if your drivers do decide to opt for a low-emission vehicle, you need to think about the training required to ensure they make the most of the benefits. Whether that’s teaching driving techniques to help drivers get the get the maximum range out of their electric vehicle, or providing help and advice to drivers installing home charging points.

Seek advice on best practice - Current initiatives at ALD include our own in-house Plug-in Hybrid (PHEVs) trials in which UK company car drivers will run a Mercedes C350e as their company car. During the study, our team of Consultants will monitor the real-word performance of PHEVs across a range multiple driving styles, terrains and mileages, to reflect the activity of a typical business fleet. In doing so, we’ll identify where driver training can be employed to improve both economic and environmental efficiencies. We’ll use the resulting data to design a blueprint that other businesses can use as a tool to help them successfully roll out PHEVs within their own fleets, including tips and advice on best practice.

*Figures taken from Expert Eye: UK Fleet Industry Review, April 2017

**Figures based on TCO over a 48 month whole life cost, based on 20000 mile contract - 10000 Business and 10000 Private Miles per annum. Fuel based on £1.15 (Petrol) and £1.20 (Diesel). PHEV mileage is based on 10000 business and 10000 private split with equalised daily business use and assumes 1 charge per day and an electric range of 20 miles.

***BIK calculated at 40% over 4 years