Transitioning to an electric vehicle fleet: Getting started

23rd February 2022
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Many businesses that run cars and vans are now thinking about moving to electric, and in order to do that there are some basics around cost and charging you and your drivers need to know to get started.

Understanding your charging needs

In order to make the transition to electric a success, you need to work out where your vehicles are going to get most of their power from. There’s no point investing in EVs and then finding they spend many working hours sitting idle in charging spaces, because that could have a detrimental impact on their cost-effectiveness and the company’s productivity.

So, it pays to plan how much charging can be done at home, probably overnight, or at work - in the car park, or a compound. 

A question to ask is: when are the vehicles going to be needed? Then you can plan a charging strategy, so the batteries are full and the vehicles are ready to go. Also, you need to know how long they must be charged for, and real-life battery range too in case they need a top-up during working hours.

To really get a clear picture, it’s important to know charging speeds. There are three main types of EV charging: rapid, fast, and slow. Where you can access these, and the charging times for them, may inform who gets EVs, and in what sort of role.

Power of charging is measured in kilowatts (kW). Battery capacity is rated in kilowatt hours (kWh). So, to keep it simple, a 50 kWh capacity battery charging at a 50 kW point will take an hour to fill. On a 100 kW point, it would take 30 minutes. On a 25 kW it would take two hours. You get the picture…

Various locations will have different types of chargers and speeds too. Here is what you can expect to find:

  • Rapid & Ultra Rapid |Location: public/workplace |50-150 kW

These offer significantly reduced charging times, and usually have a tethered cable. Charging times can depend on usage at the location, and therefore how much power each point draws.

  • Fast Chargers | Location: public/home/workplace | 7-22 kW

Home chargers usually supply an alternating current at around 7 kW, while many standard public chargers offer 22 kW. There are three connector types available, but the predominant one is a Type 2 seven pin socket. Units often require the driver to use their own cable.

  • Slow Chargers | Location: public/on street/homes without wallboxes |3-6 kW

Slow charging below 7 kW usually means a cable plugged into the mains using a three-pin plug and running at 3.6 kW, or roadside lamppost charging at around 5-6 kW. It’s fine if you park overnight, or urgently need a top-up, but slow chargers are not fast enough for regular use.

Fast, medium and slow chargers

Getting a clear view on costs

As a general rule, EVs have higher list prices than equivalent petrol and diesel cars. But that’s changing as battery packs get cheaper: the 2021 Bloomberg New Energy Finance study claimed that mid-size vehicles and SUVs will be as cheap as petrol vehicles from 2026. Also, you can offset a lot of that up-front cost if you choose to lease.

In energy terms, mile-for-mile for an EV is cheaper than a petrol or diesel equivalent. But the price fluctuations, depending on where that energy is sourced, are far greater than at a traditional fuel station.

Our research shows that home charging on average costs 9.3 pence per mile in energy, while a diesel equivalent is 15.8 pence per mile. Over a typical annual fleet mileage of 20,000 miles, that’s a saving of £1,300.

One area where EVs are demonstrably cheaper is in tax. With low BIK rates, no road tax and reduced National Insurance Contributions (NICs), they have a significant advantage for employers and employees.

Currently in 2022, the BIK rate for an EV is 2% while a petrol car emitting 100g/km of CO2 is rated at 25%. For equivalent cars with a P11d value of £30,000, a 40% taxpayer would expect to pay monthly around £20 for the EV and £250 for the petrol car. BIK rates for electric company cars will not increase until 2025. 

For an employer, the same low BIK rate can be applied to NICs and if you buy outright, there’s a 100% write down Enhanced Capital Allowance in the first year of purchase.

Insurance for EVs was higher than for ICE vehicles because of the expense of replacing batteries damaged in crashes, but the cost has come down as replacement packs have become cheaper and insurers have got a better understanding of EVs. Generally, they are driven more slowly and carefully, which means they are half as likely to have a crash, leasing company Lex Autolease reckons.

There are lower service and maintenance costs too. With fewer moving parts there’s less to go wrong. The biggest wear factor is tyres: the increased torque and heavier weight of EVs means rubber will have to be replaced more often if they are driven hard.

Paying for EVs and charge points

There are grants available to help fund EVs and charge points at some homes and workplaces. Here’s what you can apply for, and for how much*.

  • The Plug-in Vehicle Grant

Available up to £1,500 for fully electric cars priced under £32,000.

The grant will now pay for 35% of the purchase price up to £5,000 for large vans and £2,500 for small vans, and 20% of the purchase price, up to a maximum of £16,000 for small trucks, and for larger vehicles, 20% of the purchase price, up to £25,000.

Businesses can claim up to 1,000 plug-in van and truck grants each year, with a maximum 250 small and large trucks each of that total number. But there are limited numbers of the full grants – after that the maximum you can apply for is £5,000.

You can find out what vehicles qualify (vans and trucks are defined by weight categories), create new orders for grants and check the status of existing applications here.

  • The Electric Vehicle Homecharge Scheme (EVHS)

EVHS will be revised in April 2022. With a cap set at £350 (including VAT) per installation, it will only be available to homeowners who live in flats or people in rented accommodation, as well as landlords.

You can find out more here and here too.

  • The Workplace Charging Scheme (WCS)

WCS helps businesses, charities and public sector organisations fund the installation of EV charge points on the premises.

The contribution is limited to the 75% of purchase and installation costs (inclusive of VAT, and up to £350 for each socket) for a maximum of 40 across all sites for each applicant.

Find out more here.

For details of all grant schemes available, go to www.gov.uk/government/organisations/office-for-zero-emission-vehicles

*Details correct as of February 2022.

So what’s next?

Now you’ve got moving on the transition to electric, you’re probably thinking what the next steps should be. 

While there is a lot to consider, and then implement, it’s also full of exciting new technologies and opportunities which will result in positive change for your business, and the environment. 

We’re going to look at every aspect of electrifying your vehicles in this series. The next two blogs are:

  • Everything you need to know about electric cars and vans

  • Making installations simple, at work and home

To make your fleet EV transition radically simple, download our white paper here.