Have we reached a tipping point at last? Is 2014 the year in which demand for electric vehicles (EVs) will finally soar? And is there a genuine appetite for EVs among fleet managers?
It’s timely to address these questions. In the December 2013 Autumn Statement, the government announced £5 million of investment into a project to prepare public sector fleets for EV technology. Hot on the heels – or rather, wheels – of this initiative, in January 2014 fleet management and leasing company Alphabet predicted EV sales would more than double in the next three years, including heightened demand from fleets.
That forecast might appear bold, but it could prove correct. Yet it’s important to bear in mind that we are talking about growth from a low base: a projected rise from 4,200 to 10,000 units.
Putting that into context, the UK’s 200 largest fleets collectively operate around 500,000 cars and vans, and clearly there are numerous smaller companies too. The fleet sector accounts for over half of all new car registrations in the UK, and according to the Society of Motor Manufacturers and Traders 2.26 million new cars were sold in 2013. Even if Alphabet’s forecast is on the money, EVs will still make up less than 1% of the fleet market two or three years down the road.
Drivers still uncertain
A survey of 534 drivers by Leasedrive Group in March revealed only 16% would consider an EV as their next company car, while 33% were unsure. Of the 420 who provided reasons for their decision, 35% stated lack of range as the main factor behind their decision not to opt for an EV next time around. Lack of knowledge (13%) and lack of an adequate recharging infrastructure (12%) were the next most cited reasons.
“When you consider that lack of knowledge was ahead of concerns over the lack of a comprehensive recharging infrastructure, it goes to show how much more needs to be done to educate prospective drivers,” says Leasedrive Group commercial director Roddy Graham. “Government needs to take more of a lead and create a central ‘classroom’ on all things EV, as well as going further with financial incentives to plug more people onto the EV grid.”
For the most part, promoting the benefits of EVs has been left to manufacturers, most notably Toyota with its Prius, Nissan (Leaf), Vauxhall (Ampera) and BMW (i3). Plus some fleet companies also try to do their bit with online driver portals recommending vehicle suitability based on driving patterns and whole life costs.
Even motor sport governing body the FIA has got in on the act by promoting its Formula E Championship, adds Graham. Starting this September, Formula E will visit 10 cities from Beijing to Buenos Aires, ending in London in June 2015. The street-based formula will showcase EVs for urban areas. As more of the world’s population migrates to cities, the potential for Formula E to act as a catalyst for greater adoption of EVs is clear.
Yet obvious stumbling blocks remain to hinder EV uptake. Chris Shore, pricing manager at Hitachi Capital Vehicle Solutions makes the point that because this remains new technology, residual values are unclear. The future second-hand market is untested.
Charging is an issue
Another question mark hangs over home charging. While it is not essential, most drivers will want the convenience, which comes at an additional cost. “There are schemes and our partners at British Gas currently provide this, where free installation is available providing certain conditions are agreed to,” says Shore. “However, depending on the existing infrastructure, extra work may be required at a cost for a charging point to be installed.”
This hasn’t deterred West Midlands Police, which for a number of years has investigated the possibility of using alternative fuel vehicles for policing roles. Fuels such as LPG (liquefied petroleum gas) were trialled with response vehicles but at a time of fewer LPG suppliers, the force found users tended to revert to petrol.
From 2011 the force began using EVs when it took part in the CABLED trial with a Mitsubishi i-MiEV that was assessed over 12 months. The Coventry and Birmingham Low Emission Demonstrators (CABLED) ran between 2009 and 2012, and collected usage data from 110 EVs. While this trial showed the concept of using EVs was possible, the vehicle proved too small. However, when it introduced the Nissan Leaf last year, the force found that with a conventional-sized vehicle it could use an EV in a police role that operated during daylight hours, allowing a charge overnight.
“Nine months in we are extremely pleased with the progress of the vehicle,” says West Midlands Police vehicle operations manager Gary Mallett. “We had to install charging points around the force area, but with the grants available it ‘costed in’. The main issues were multiple users over many sites, which took some familiarisation training to iron things out. Overall the vehicles have gone down well with the officers and are a good talking point with the communities we serve. The data we are gathering to establish savings on conventional fuel is proving the vehicles do work for us and the savings on CO2, taking into consideration the charging, are growing.”
Mallett reveals West Midlands Police is currently exploring the viability of electric vans. It is trialling a Peugeot Partner for a logistics role and is due to try the Nissan NV200 van for the same. With ranges increasing, he says he will continue to look at EVs or hybrid vehicles for further roles.
Suitability for fleets
Chris Mitchinson, associate director of Fleet Control at CLM Fleet says there is a clear consensus among his colleagues that EVs are not the answer for mid-to-large sized fleets. However, he feels – as West Midlands Police has found – EVs can serve their purpose in niche environments. For example, one of CLM’s clients runs a small fleet of electric vans on sites, which means they never use main roads, and do a lot of stop-starting. EVs are ideal in this role Mitchinson argues, whereas diesel equivalents will suffer from particulate filter issues, and petrol engines require more storage of fuel on-site.
“Yet even in this capacity, there are still issues with the supporting infrastructure,” he says. “Charging points can take weeks to fix in the event of a failure, as there are few expert engineers, while the nearest EV dealers are often either out of range of the client site, or unwilling to collect. In addition, the quick charge option being considered by many companies has further to go in respect of development. EVs can only go through so many cycles of dumping electrons at such a rate before the batteries don’t accept the charge. There was a recent case experienced by a manufacturer at a driver event where two of the four vehicles were offline by the end of the day.”
Another drawback to EVs is the ‘forgotten’ negative environmental impacts. Where does all the extra electricity come from? More power stations, increasing carbon footprint, plus all the pollutants that are a by-product in the production and disposal of batteries are all thorny issues. Taking these into consideration, CLM believes that the more likely success in alternative fuels will be hydrogen power. “Not only is hydrogen a more viable and sustainable fuel, but it can also utilise the existing fuel infrastructure. And in terms of performance, the range of hydrogen is already double that of typical electric vehicles,” Mitchinson asserts.
The plus-points of electric vehicles
Others have a little more faith in EVs. LeasePlan has 150 pure electric vehicles on fleet and was one of the first leasing companies to offer this type of vehicle to its clients back in 2011. It worked with Dumfries & Galloway Council to introduce seven vehicles, which have reduced its 700-strong fleet and plant emissions by circa 13,200 kg CO2 per year.
“Reducing emissions is an increasingly important concern for businesses and public sector organisations but one of the primary associated benefits of pure electric vehicles is that they have a considerable reduction on fuel costs – the second largest expense for organisations after the vehicles themselves – as well as attracting significant benefit in taxation reductions for employees,” says LeasePlan strategy director Ian Marson.
In addition, LeasePlan research has found that manufacturer maintenance and repair costs are 20% cheaper than equivalent conventionally-fuelled vehicles because pure EVs don’t have components associated with a traditional combustion engine, such as a gearbox or exhaust system.
The final word goes to Andrew Hogsden, senior manager of strategic fleet consultancy at Lex Autolease. “The initial outlay of charging points and the installation costs for a fleet of electric vehicles may be a prohibitive factor for managers,” he says. “These types of vehicles are hampered by the limits of battery life and, for businesses requiring high daily mileage they’re unsuitable, although they are improving with technology. Charging infrastructure is patchy at best and, though the government has reiterated its support for these vehicles, this may change over time.”
With so many issues to contend with, it’s no wonder that growth in the EV market is far from electrifying.
