Panel of Experts: SME fleets
While many small businesses may want to make the switch to electric vehicles, lack of time and expertise is causing some to shy away from the task. Our expert panelists explain how SMEs can be supported in their journey towards a zero-emission fleet
Expert panelists: Johan Hanekom, director of electric vehicle strategy, The Phoenix Works; Richard Parker, corporate sales manager, Webfleet Solutions; Gavin Franks, director of business services, the AA; and Lee Brown, head of 0Zone, The Grosvenor Group
The UK’s six million small businesses make up 99 per cent of the UK’s enterprises, employ 60 per cent of the UK workforce and generate £2.2 trillion of revenue to the economy, according to the government. They can therefore have a significant impact on the environment if they take measures to reduce their carbon footprint. Acknowledging this, the government has recently launched a campaign encouraging small businesses to commit to cutting their emissions in half by 2030 and to net zero by 2050.
However, while many small and mircobusinesses may want to make the switch to electric vehicles, lack of time and expertise is causing many to shy away from the task. We ask our panelists what they hear as the main reservations from SMEs about making the switch to zero emission vehicles, and how they address them.
Gavin Franks, director business services at the AA, believes that, although concerns exist, the picture is a pretty positive one when it comes to smaller businesses and zero emission vehicles. He explains: “We know that 84 per cent are more likely to consider adding EVs to their fleet, compared to 12 months ago. We know this as we recently undertook research with 100 SME fleet managers for our ‘New Horizons: technology customer service and the evolving automotive landscape’ report. The research showed that 23 per cent already use EVs in their fleet and 50 per cent expect to have EVs in their fleets in five years’ time.”
Pointing out the barriers, however, Gavin says that the lack of EV charging infrastructure is one of the main reservations for SMEs, but the landscape is changing daily. Gavin says: “According to Zap-Map data, at the start of July there had been 723 new charging devices installed in the UK in the previous 30 days, with the overall figure for the number of chargers nationwide changing daily.”
Making EV drivers feel supported should something go wrong is important to reassuring smaller businesses that are considering electric vehicles. Gavin says that the AA provides customer support for over 5,000 UK charge points, for five different operators, which means that drivers really are supported at every step of their journey.
Changes in staff
Lee Brown, head of 0Zone at The Grosvenor Group highlights another issue that could be putting smaller businesses off electric vehicles: “The challenge smaller businesses face with any company vehicle is that if the driver leaves there is a much smaller pool of company car drivers to re-allocate the vehicle to. As a result, SMEs tend to prefer drivers to opt for cars that are widely popular, or ones that fit the role perfectly (e.g. an estate car for someone carrying equipment).
“With electric vehicles, therefore, there is a degree of anxiety that if a member of staff chooses, lets say, a pure EV but then leaves their role will someone else within the business, or the new person joining, want to take that EV on – especially if it doesn’t suit their lifestyle?”
Parking, as well as a lack of formal policies can also stand in the way. Lee Brown says: “Many SMEs also don’t always have the office parking space that larger companies have. This can cause problems with installing charging points at work – and some SMEs will be reliant on their office space providers, which can often be shared with other small companies. Without at-work charging it can become more of a challenge to persuade drivers to choose EVs.
“SMEs also don’t tend to have such formal car policies and choice lists and so the decision as to what car an employee receives can be down to what is negotiated with the owner or directors.”
“The appetite for electric vehicles can, therefore, be driven by the personal attitude of that director rather than being down to a formalised fleet strategy,” Lee Brown adds.
Finance is another big factor in making EV purchasing decisions. Costing more than traditional ICE vehicles, fleets really do need to understand the total cost of ownership (TCO) of EVs.
Johan Hanekom, director of electric vehicle strategy at The Phoenix Works, says: “Understanding the total cost of ownership can be a mental hurdle. We help SMEs better understand that in the majority of cases, the TCO of an EV is favourable compared to the TCO of an ICE. Companies also need to do their homework to ensure they get a fit-for-purpose charging infrastructure, as there are a lot of vendors claiming to be best in class.”
Richard Parker, corporate sales manager at Webfleet Solutions echoes the importance of fleets understanding the total cost of ownership for EVs. He says: “With the eye firmly on the bottom-line, cost is a key consideration – and hurdle – when it comes to EV transition for SMEs.
“Though investment in EV R&D and deployment has been exponential in recent years, the technology which powers electric vehicles and the materials and components used are still relatively expensive. As a consequence, many electric vehicles remain more expensive than their petrol or diesel-powered counterparts.
“Initial purchase or rental costs can cause resistance or hesitance, however, fleet decision-makers should consider the significant savings that can be made in everyday running costs.
“Not only do fleets benefits from a lower cost per mile with an electric powertrain, EVs also help fleets realise savings on maintenance costs. Conversely, this means that the TCO (total cost of ownership) is generally lower for EVs than for their diesel equivalents.”
Time and resource
Another issue SMEs may find is that they lack the resource to manage fleets. Richard Parker says: “In the absence of a fleet manager or external solution, the task of fleet decision maker often falls to the business owner or other personnel. With limited resources, lack of industry knowledge, and a tendency to be risk adverse, it is understandable that there is a reticence from SMEs to make the EV switch.”
Range anxiety and charging limitations can also be an issue. Richard Parker says: “Though these concerns are legitimate, range capabilities are constantly being improved, thanks to tech innovations, and extensive EV fleet roll-out is being made more feasible, thanks to significant infrastructure investment from the government. For example, the government recently committed to installing 1,800 new ultra-rapid charging points at motorway service areas as part of Ofgem’s £300 million investment in over 200 low carbon projects.”
Small businesses may also be put off by the limited vehicle choice, but with manufacturers committing to being exclusively zero-emission by the end of the decade, this will change. “These developments are helping to accelerate fleets’ readiness for the EV switch, says Richard Parker. “In fact, Webfleet Solutions research revealed that almost two-thirds (65 per cent) of LCVs used commercially in the UK could be replaced by electric models (based on those vehicles that drove less than 300km a day over a 12-month period).”
Wider green plans
Aside from choosing greener vehicles, there are other ways smaller businesses can reduce their environmental impact.
Reducing travel is one of the easiest measures, believes Lee Brown. He explains: “We all saw during the lockdowns how simple it was to shift from travelling to meetings to having them online, and the environmental benefits of less travel were witnessed across the world.
“The reality is, now that we are seeing lockdown measures easing SMEs (like all businesses) are perfectly placed to re-evaluate their business travel to achieve a far greener model.
“By using Zoom and Teams meetings for the functional day-to-day catch ups, but travelling for face-to-face meetings when its required, means companies will see their annual mileages fall – and this opens the door for the adoption of electric vehicles without concerns about range anxiety and whether they are suited to covering very high mileages.”
Focusing on the issue of grey fleet, Lee Brown says that companies can support their drivers with a personal contract hire offering. He says: “At Grosvenor, we find when drivers opt out of the company car scheme and choose cash, that’s the perfect moment to entice them with a really competitive range of PCH deals so that they move seamlessly from a company car to a brand new, low emission PCH car.
“Just by doing this solves the problem of cash drivers using their allowance to buy an unsuitable gas guzzler for business use, or older vehicles that can be unreliable, high in emission and a grey fleet headache. It’s for this reason why Grosvenor’s personal contract hire solution is growing at such pace in the corporate sector.”
Reducing ICE vehicle emissions
For fleets with ICE vehicles, opportunities to improve fuel economy are still plentiful, points out Richard Parker. He explains: “More intelligent and intuitive routing and scheduling can help bring companies closer to their green ambitions. Live traffic information, combined with other telematics data, can enable smarter navigation, helping drivers to avoid congested roads and prevent idling, as well as navigate drivers to their destination via the quickest, most fuel-efficient route. Improved visibility of the fleet’s real-time movements can also improve daily workflow and minimise wasted mileage.”
Telematics also gives you an insight into how staff drive. Richard Parker says: “The complete oversight of driver behaviour offered by telematics can also assist in forging a more sustainable fleet. Information on driver performance, such as incidents of harsh steering, braking, speeding and idling, helps to identify opportunities to improve fuel efficiency – and cut emissions.
“Drivers can receive predictive advice and alerts via their sat nav devices, such as when to take their foot off the accelerator on the approach to roundabouts or junctions, to help them achieve a more sustainable style of driving.
“It is important that driver coaching is seen as a positive, empowering and collaborative exercise that benefits both driver and business. We have seen some powerful results from driver training trials, with one client projected to save 14,000 lbs of CO2 per annum, from just three of its fleet vehicles.”
The energy efficiency of tyres should also be a factor in reducing ICE fleet emissions. Richard Parker explains: “Researching and selecting more energy efficient tyres can also help. For example, Bridgestone’s Duravis range for vans and Ecopia for trucks both use their NanoPro-Tech compound to lower the internal friction between the different tyre compound elements, which in turn reduces top compound energy loss.”
Other ways to travel
Another way to reduce companies’ environmental impact is to consider all travel options through Mobility-as-a-Service. Richard Parker explains: “Technologies are emerging that offer integrated journey planner capabilities, with real time information about the availability of ‘greener’ modes of transport for any one journey. Restrictions can be put on high emission-emitting transport options and employees can be encouraged and incentivised to make more eco-friendly choices for individual journeys.
“Green incentives and employee benefits are becoming more popular, as employees become more environmentally-aware. Schemes such as Cycle to Work benefits, can encourage company-wide, collective responsibility and help cement companies’ commitment to being a sustainable and conscientious employer.”
Getting the driver engaged is key to getting SMEs to reduce their environmental impact, says the AA’s Gavin Franks. “This may be to help increase the take-up of electric and other alternatively-fuelled vehicles in the fleet, or drive more efficiently when behind the wheel. Whatever the power source of the vehicle, it’s possible to conserve energy to make the fuel or charge last longer and therefore have minimum impact on the environment – plus, save costs along the way! Drivers can be educated on the most efficient driving techniques through expert driver training, such as through the AA’s training arm, DriveTech,” says Gavin
Another way for SME fleets to go greener is to look at renewable energy, according to Johan Hanekom: “SME fleets could install other Smart Energy assets, such as solar panels and heat pumps, which as well as the environmental credentials, produce financial savings. Employees should also be encouraged to adopt eco-friendly behaviour, such as using their own mug rather than a paper or plastic container.”
Service, maintenance and repair
Service, maintenance and repair (SMR) can take up a lot of time for SMEs, time that should be used on more business critical matters. And fleet downtime can be a drain on SMEs, as Richard Parker explains: “Fleet downtime is costly for SMEs and can be a significant drain on the business’ finances and productivity levels.
“Smaller operations already have limited resources and managing vehicles, from organising services, maintenance, and fuel management, to tax, insurance and compliance, can be extremely time-consuming.”
Telematics is one way that can help manage the administrative side of fleet management. Richard Parker says: “The relationship between telematics data and robust service, maintenance and repair (SMR) offers high value, helping free up time of fleet decision makers to spend on driving business growth and improving the bottom line, rather than dealing with the varied needs of the fleet.
“WEBFLEET’s vehicle maintenance planning tools, for example, enable fleet decision makers to make use of real measured mileage reported by the odometer, directly from their vehicles, to plan maintenance intervals. At-a-glance reports can be generated offering maintenance overviews. These enable fleet decision makers to keep tabs on everything from service intervals to MOTs. Users can also create maintenance tasks for each vehicle, copy maintenance tasks to vehicle groups, monitor their status and plan accordingly.
“Although EVs have fewer moving parts, contributing to lower maintenance costs than their ICE equivalents, such solutions for effective SMR management remain paramount to minimise costly downtime. On-board diagnostics, malfunction alerts and connected EV health data, including battery status, will become increasingly important elements of this, ensuring preventative maintenance work is carried out in a timely manner."
The driver has a big impact on the wear and tear of a vehicle, as well as its environmental performance. Richard Parker says: “The impact of harsh driving styles on fleet maintenance costs – which may include aggressive cornering, braking or speeding – cannot be underestimated and drivers should be encouraged more smooth and considerate driving can help reduce wear and tear.
“Telematics can provide the individual scores and profiles of drivers needed to set performance benchmarks and help drive down incidents that could increase the possibility of costly vehicle repairs.”
Another way to manage SMR is to outsource, believes Gavin Franks from the AA. He explains: “Outsourcing service, maintenance and repair (SMR) is a really effective way to not only save your business time but to take a proactive approach to meeting all obligations to ensure the smooth and safe running of your fleet.
“At the AA, our Prestige division can handle every aspect of SMR and provide enhanced tracking and reporting on your fleet through the Unity platform. Through taking a proactive approach to SMR, fleets will also benefit from reduced downtime, by getting vehicles back on the road quicker and avoiding potential delays to MoTs and services.
“Prestige has a network of over 560 approved garages to carry out SMR work and this can reap savings of up to 30% on standard dealership prices for parts and labour. And, of course, all work is covered by a full warranty process. SMR is definitely an area for SMEs to look into to see if they can save time and costs.”
SMR can be included for contract hire vehicles, and Lee Brown believes this is good option for SMEs: “For companies that contract hire their vehicles, we still advocate choosing a full maintenance solution so that SMEs can pass the worry and risk over to us regarding their SMR.
“Some might argue that you can save by choosing a non maintenance contract, but in the long run the fully maintained option means company directors can budget with confidence and not have to worry about the constant barrage of repair bills.
“If an SME owns its cars and vans, we would firmly recommend a maintenance management solution where our maintenance technicians manage, monitor, authorise and pay for all of the repairs on your behalf, with one consolidated invoice at the end of the month.
“Very few SMEs have a dedicated fleet manager, and even less have someone who is a fully qualified mechanic to oversee each vehicle repair. Our advice is to simply outsource it so that you can save money and focus your attention on your core business activity.”
When it comes to the maintenance of EV charge points, Johan Hanekom advises fleets to introduce a EVSP model, where all the hassles of installing to maintaining and financing charge points will not impact their core business. “We can offer tailored end-to-end solution and 100 per cent up-time guarantee,” adds Johan.
SMEs and the support they need
While there are ample examples of large companies adopting EVs and making pledges to electrify their entire fleet, smaller businesses may be daunted by the journey to electrification. So what support would benefit them, from both government and industry?
“SMEs must be listened to and their views taken into account,” says Gavin Franks from the AA. “Just as we have recently done with our research among SMEs to inform our ‘New Horizons’ report, it’s important everyone involved in the journey to 2030 and electrification understands the specific needs and challenges of SMEs. I urge SMEs to speak out and ask the tough questions of suppliers, as well as government. I appreciate this isn’t always easy but I’m always happy to listen – as is the wider AA team – and support how best we can. We liaise closely with government on a range of motoring subjects and seek to give drivers a voice through the information we collate.”
Lee Brown from Grosvenor believes that the amount of information to digest can be daunting. He comments: “The difficulty for SMEs is that there is so much information to consume making it really hard to disseminate and stay on top of it. From the latest EVs being launched by the manufacturers, through to EV charging , grants, taxation etc, SMEs don’t have the internal resource to allocate time for this.
“Also, many agencies, partners or suppliers have a very limited remit which means if you rely on them you’ll probably only hear one aspect of the bigger picture.
“In our opinion, its very much the contract hire or fleet management company’s role to pull all of the information together, interpret it and put it out in a digestible format. This is something we have been doing for years as part of our 0Zone solution and our focus is across all of our customers – from large PLCs to SMEs.”
Richard Parker from Webfleet points out that some local authorities are allowing for the trialling of electric vehicles to help small business with EV uptake. He says: “Highways England has teamed up with certain councils, including Leeds, Coventry, and Nottingham, to allow businesses to trial electric vehicles. This is commendable and more councils should consider applying for the £936m fund.”
Regarding support for electric vehicle charge points, Richard Parker points out that the government’s Workplace Charging Scheme can be a powerful incentive and source of support for SMEs planning to transition. He says: “The voucher-based scheme provides support towards the upfront costs of the purchase and installation of EV chargepoints. The contribution is limited to 75 per cent of purchase and installation costs.
“The government have made changes to encourage use of the scheme, including increasing the number of sockets a company could claim for from 20 to 40 and an extension of voucher validity from 120 to 180 days.
“Furthermore, where a company allows employees to charge their own electric vehicles at the workplace, there is no taxable benefit for the provision of that free electricity. Combined with the ability to claim a 100 per cent FYA of any financial investment towards Vehicle Charging (until 31 March 2023), it is a good time for SME businesses to be looking at investing.”
Johan Hanekom believes that continued subsidies and cost parity with ICE vehicles will help smaller businesses make the switch to electric. He says: “All parties in the value chain have a duty of care towards all their customers to ensure they are given the requisite support to transition to zero emissions. Continued subsidy support from the government will be critical in the very short term. In the medium to long term cost parity needs to be such that adopting an all-electric future makes complete financial sense.”
About our expert panelists:
Gavin Franks, director business services, the AA
A graduate of City University, Gavin holds a degree in Aeronautical Engineering and is a qualified accountant. He has presented and written on subjects as diverse as the blurring of HR and IT, the role of the CIO, customer service and the digital journey, driverless cars and technology deployment.
Richard Parker, corporate sales manager, Webfleet Solutions
Webfleet Solutions’ EV expert Richard Parker has over 20 years’ experience in the fleet industry and specialises in improving fleet performance through data and digital solutions. In his role as corporate sales manager, he helps fleets to successfully navigate the transition to more sustainable transport solutions. He is also a contributor to the popular webinar series the EV Café.
Johan Hanekom, director of electric vehicle strategy, The Phoenix Works
Johan is a globally recognised expert on strategy, innovation, and growth with an emphasis on corporate entrepreneurship. Johan's background blends consulting, management and business development across private and public companies. He was the Global Account Director for Electric Vehicles at Enel X before joining The Phoenix Works as Director of Electric Vehicle Strategy.
Lee Brown, head of 0Zone, The Grosvenor Group
Lee Brown is head of 0Zone, the Grosvenor Group’s innovative and market leading solution to help companies navigate their way smoothly towards ultra-low emission and electric vehicles. Lee is also managing director of Interactive Fleet Management, the Grosvenor Group’s specialist fleet management business, which means he brings a perfect balance between how fleets can drive down their emissions and the implications of policy setting.