motorway in the morning

Business considerations for
fleet managers


The cost of running electric vehicles will be high on any fleet managers’ considerations when contemplating a switch. When assessing this, it’s important to look beyond the list price and consider the broad range of costs and financial benefits.

Up-front costs, whether purchase or lease, are higher for electric vehicles than for more traditional petrol or diesel vehicles. However, once running costs are factored in, electric vehicles become a more cost-effective option over their lifetime.

Maintenance costs tend to be lower. Electric vehicles have fewer moving parts than petrol and diesel vehicles so there’s less to go wrong – and less to fix.

There are also savings on fuel, with the cost of recharging an electric vehicle lower than filling up at the pump.

Incentives to switch to zero emission vehicles also add to the financial appeal of going electric. Lower employer national insurance contributions, preferential VAT rates and corporation tax relief boost electric vehicles’ attractiveness.

Employees also win financially, with benefit in kind rates for a fully electric vehicle frozen at 2% until the end of the 2024/5 tax year – significantly lower than the rates charged for vehicles with carbon emissions. 

However, it’s also important to note that these incentives are likely to change. As take-up of electric vehicles increases, the reduction in vehicle excise duty, fuel duty and VAT will hit government revenue. Increasing tax on electric vehicles, removing incentives or introducing a national road pricing scheme through connected vehicle technology could all be on the cards.

Vehicle suitability

Choice in the electric vehicle space has grown substantially, with new models launching almost every week. As features and performance vary greatly, fleet managers must consider exactly what they need when choosing an electric vehicle.

Just like petrol and diesel vehicles, the way it will be used and the types of journey will have a major influence on the choice of model. Fleet managers should consider details such as whether a particular model is suitable for business use or, for vans, whether it can cope with the load it will need to carry.

But, when it comes to selecting an electric vehicle, there are additional considerations. Battery range can be a major factor. If the business operates in a relatively restricted radius, for example a small building company that works on properties across a city, a lower range could be sufficient. If longer journeys are essential, it may be worth considering a vehicle with a higher range but also assessing whether the charging infrastructure is in place to allow battery charging on route.

ev charging

Speed of charge can also influence choice. This is governed by the size of the battery and the vehicle’s on-board charging capability but again, what works, will come down to how the business intends to use the vehicle. If there is likely to be plenty of downtime, when the vehicle can be charged, a slower charge time may be acceptable.

Load will also affect charge, as transporting a heavier load will require more power. This needs to be taken into consideration when comparing the speed of charge and range on different vehicles.

With so much choice available – and this growing all the time – comparing the specification on different models is essential. The EV Database  is a useful resource to compare different models.

Plenty of demand - but no supply

Supply is another consideration that fleet managers may want to factor in. Disruption caused by the pandemic, and more recently the war in Ukraine, is extending lead times on all types of vehicles.

This can add anything from a couple of months to a year and even 18 months to the availability of a vehicle, which may necessitate some forward planning by fleet managers.

Although this availability squeeze is still affecting the market, as more normality returns after the pandemic, vehicle supply is also expected to return to normal levels too.

Battery degradation

The lifespan of an electric vehicle’s battery is another consideration for fleet managers, with expectations shaped by experiences with mobile phones and other products with lithium-ion batteries.

While electric vehicles’ batteries will degrade over-time, advances in technology mean this is much less of an issue now. Most electric vehicle manufacturers offer lengthy warranties on their batteries, typically covering 100,000 miles or eight years – double the average lease cycle of four years – and will generally guarantee a minimum battery capacity of 70%.

Studies support this too. Geotab1 analysed data from 6,300 fleet and consumer electric vehicles and found that the average decline in energy storage is 2.3% a year – equivalent to a loss of 17 miles on a 150 mile electric vehicle after five years. Overall, it concluded that most batteries would outlast the usable life of the vehicle.

These statistics provide some reassurance to fleet managers, although it is important that they factor into their assessments how long they intend to own the vehicles and the likely mileage.

The battery is the single most expensive component in an EV and if purchasing a second-hand EV understanding the health and condition of a battery will be a critical purchase consideration.

Battery technology continues to improve at pace and manufacturers are now developing sensors (Battery Impact Detection and Current Sensor Modules) that warn of impacts to the battery and identifies battery performance both of which will be critical for the second hand car market.

Additionally, as the way a battery is charged will affect its lifespan, it’s also sensible to include this in employee training. The graph shows that once battery integrity starts to diminish, its operational effectiveness reduces much quicker.

battery degredation timeline graph

A normal degredation curve is expected to look something like this.
To prolong battery health, it’s recommended that the state of charge is kept between 20% and 80%, particularly when the vehicle is left for longer periods. Leaving it sitting on a full or empty charge will have the most detrimental effect on the battery. Frequent, fast charging is another no-no for battery health.
ev charging

Managing electric vehicle risk

Risk is another key consideration for fleet managers, with electric vehicles having a different risk profile to those running on petrol or diesel. But, while the media may be portraying them as more susceptible to fire, the data points to the opposite.

Figures from The Motor Insurance Anti-Fraud and Theft Register (see table) show that petrol and diesel vehicles are around four and a half times more likely to have fires than plug-in electric vehicles.

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  Petrol Diesel Internal
PHEV / BEV Non plug-in
2018 83% 125% 100% 11% 32%
2019 82% 127% 100% 25% 26%
2020 79% 131% 100% 21% 37%
Total fires /
car parc
81% 129% 100% 22% 38%
Source: The Motor Insurance Anti-Fraud and Theft Register
Fire risk compared to ICE cars = % fire claims / & ICE fire claims

Although the data is still very immature – the dataset is small and the petrol and diesel vehicles will have included a much higher proportion of older models than the electric vehicles – it is encouraging to see a lower fire risk among electric vehicles. 

That said, electric vehicles do present a different fire risk to their petrol and diesel peers. When a battery cell short circuits, it can heat up uncontrollably, leading to thermal runaway. The resulting fire burns hotter and longer and, as it very difficult to control, will often result in total loss.

Understanding the causes can help to manage the risk. Typical causes include impact damage; overcharging or faulty equipment; manufacturer defect; and exposure to extreme temperatures.

Paying close attention to the vehicle’s battery monitoring system and keeping the software updated will help to manage this risk. Additionally, as battery technology improves, this fire risk will also reduce.

Theft risk

A stolen vehicle can be a major headache for fleet managers so they should weigh up the theft risk on electric vehicles. With many models benefitting from the latest technology, including sleeper key fobs, electric vehicles are regarded as more difficult to steal than an average petrol or diesel vehicle.

But, as thieves are constantly looking for new ways to steal vehicles, a robust approach to security is essential. Physical measures such as steering locks, CCTV, security posts and key safety can all help to deter a thief.

It’s also important to educate drivers about theft. For example, rather than steal the vehicle, thieves are targeting charging cables for their copper content so drivers need to be aware of this when topping up their vehicles’ batteries. 

Driver considerations

Charging considerations