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Fleet and mobility


of an international, green-focused army – one that will ultimately see 4.8 million vehicles make the jump to zero emissions by 2030. These so-called EV100 members have similarly committed themselves to rolling-out company-wide electric vehicle (EV) charging for staff and customers, which will also see charge points being deployed at over 5,000 company locations. In the UK, this translates into over 700,000 vehicles scattered across the country.


All this is reflected in the amount fleet operators are willing to spend. In the two years since the government announced a ban on the manufacture of petrol and diesel vehicles by 2035, businesses have already spent an estimated £8.2bn on EV adoption, with investment over the next two years expected to increase by 46% to £12bn. Put another way, that means that companies like Royal Mail and Centrica – which operates British Gas – are spending an average 4.5% of their annual turnover on EV technology, with 27% of companies anticipating that at least a fifth of their vehicles will be electric by 2022.


Green with envy


These are significant numbers – but understandable given the range of factors pushing firms forward. From stricter government emissions targets, to pressure to operate freely in ultra-low emissions zones, as well as the lower maintenance costs of EVs, there are plenty of reasons to go green. In the short term, however, EV isn’t cheap. Many companies commonly cite cost – in particular vehicle costs and the increased electricity bills caused by charging vehicles on company premises – as major impediments to adoption. That said, the eventual mass rollout of ever-improving technology, coupled with associated economies of scale will mean these issues are likely to diminish over time. A great example of the direction of travel is a staple of the UK’s electricity scene: British Gas. Back in July 2020, the company made a major statement of intent when it placed an order from Vauxhall for 1,000 fully electric vans. Known as the Vivaro-e, the deal securing the new vans was described by the manufacturer as the largest commercial order for electric vehicles in the UK to date. Factor in a subsequent order for 2,000 Vivaro-e vehicles for delivery by 2022, and EVs will eventually comprise over 30% of British Gas’s commercial fleet. “We are also well underway to exiting all our Euro 5 vans by the end of 2021,” says Steve Winter, head of fleet at British Gas. “These will be gone and that means we will only have Euro 6 or battery electric vehicles (BEV) vans on fleet, which helps considerably when looking at CAZ (Clean Air Zone) and ULEZ (Ultra Low Emission Zone) charges.”


Finance Director Europe / www.ns-businesshub.com


To understand what Winter means, you have to understand the thicket of environmental regulation he and his team have to deal with. Under existing legislation, petrol-powered vehicles are exempt from particulate matter (PM) standards through to the Euro 4 stage – but vehicles with direct injection engines are subject to a limit of 0.0045 g/km for Euro 5 and Euro 6. This will pave the way for the eventual implementation of Euro 7 from 2025, an initiative already decried by automotive insiders as heralding the end of the internal combustion engine. Against this backdrop, Winter and British Gas continue to plough ahead. “Over the past two years we have reduced the number of diesel van replacements as part of our move to EV only,” he explains. “Those we have replaced have been on shorter term leases, allowing us to replace them with BEVs as they become available – this flexibility in the lease length is fundamental to achieving an efficient transition to a full EV fleet.”


42%


People who have seen fewer safety incidents since using fleet tracking software to monitor driving behaviour. Teletrac Navman


“We have a fleet of surplus vehicles available and ready to go, thereby saving hire costs but also ensuring drivers have a fully-kitted van to use if theirs is in for some extended repairs.”


As part of this transition, British Gas installers have been fitting charge points in engineers’ homes, ensuring they have easy access to clean electricity. Winter hopes that around 30% of drivers will soon be able to home charge. The company has also launched an app to manage charging, giving drivers the reassurance that all energy used to charge their van is directly recompensed into their pay via British Gas’s systems. This is further bolstered, Winter adds, by rigorous training regimes. “We also have driver development courses to get the best out of our EVs as we have found that to get the best out of the vehicles, driver training is fundamental.” Among other things, drivers are given video instructions on how to perform walk-around vehicle checks. Smartphone apps can also assist drivers in carrying out these checks. In theory, more efficient vehicle checking should potentially reduce downtime of the vehicle. Meanwhile, being an early adopter of EU6 technologies has enabled British Gas to craft a detailed total cost of ownership model. Representing the purchase price of an asset plus the costs of operation, organising the numbers in advance means the electricity giant is more than ready to go green.


Going in circles


All this undoubtedly helps British Gas accountants – but these financial benefits are always shadowed by


14%


The expected CAGR registered by the global fleet management system market between 2020–2025. Business Wire


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