Business benefits: is it take-off time for electric vehicles?

Posted by Super User

With major car manufacturers falling over themselves to offer electric vehicle models, and businesses increasingly being wooed by the financial benefits of signing up, could we be on the cusp of an EV revolution?

 When sci-fi author William Gibson said: “The future is already here – it’s just not very evenly distributed,” he was not talking about electric vehicles (EVs). But you don’t need his powers of imagination to understand why he might have been.

In 2013, only 3,500 of the newly registered cars in the UK were plug-in full electric or hybrid EVs, according to The Society of Motor Manufacturers & Traders. This year, the number is more than 63,000.  And while Elon Musk’s Tesla Motors was once a trailblazer – practically alone in thinking seriously about making EVs for normal consumers – major car manufacturers are now falling over themselves to offer EV models. The British motorist can now choose from about 40.

Of course, much of EVs’ surge in popularity stems from concerns about global warming. The Climate Change Act 2008 meant that the UK was already legally obliged to cut emissions by 80pc of 1990 levels by 2050, but in March this year Andrea Leadsom, then a minister at the department for energy and climate change, suggested that a more ambitious target of reaching “net zero emissions” by the late 21st century would be enshrined in law. With EVs enabling a 40pc reduction in CO₂ emissions, it’s clear that they will be part of the picture.

The UK is among 13 members of the Zero Emission Vehicle Alliance to have signed a commitment to make all passenger vehicles sold “zero-emissions” by 2050.

The Government has also announced that it will spend more than £600m between 2015 and 2020 to “support the uptake and manufacturing of ultra-low-emission vehicles”, including £38m to be spent on public charging points. There are also plans to create an ultra-low-emissions zone in London.

From September 2020, vehicles entering the area currently covered by the congestion charge in the capital will have to pay an additional fee unless they meet exhaust emissions standards.

In addition to this, government grants (of £4,500 towards the cost of a standard EV and £500 towards the cost of a charging point), tax breaks and possible savings of around £100 per 1,000 miles driven (versus a petrol or diesel car) mean that electric vehicles are fast becoming attractive because of cost-effectiveness alone – a fact that has not escaped the attention of businesses.

“EVs can have a very real impact on cost saving for a business,” says Martin Quail, chief commercial officer at EV leasing and management company Alphabet. But, he adds, that is not the only upside. “The image of the brand can be bolstered if people can see that the business is working towards an environmentally friendly fleet composition.”

Alphabet supplies EV funding and fleet management services to clients that include the organisation that looks after the Royal Parks in London, lettings agent Chase Evans and West Middlesex Hospitals – which has saved close to £25,000 by introducing an electric car pool scheme.

“The trust was spending £45,000 on taxi fares for therapists that were visiting patients’ homes,” says Mr Quail. “As the journeys that had to be made were relatively short, an electric car pool was the perfect solution.”

Still, though, EV drivers remain very much in the minority. “At the moment, almost no one has an electric vehicle,” says Simon Harrison, group strategic development manager at planning and engineering consultancy Mott MacDonald. “But there could be something that happens that means in, say, five years’ time almost everyone has one.”

Or perhaps that “something” will be a combination of things. Mr Harrison mentions improving battery technology, the increasing range of EVs (at the moment you can expect 120 miles on a single charge from a pure EV) and the development of self-driving cars (which could drive themselves off to be stored and charged at practical, purpose-built locations) as significant factors that could affect both consumer behaviour and the layout of modern cities.

But another important factor is likely to be the coverage and availability of charging stations.

Energy provider E.ON already has a network of charging points that stretches throughout Europe, including special fast-charging stations on autobahns in Germany that can fully charge a car within 30 minutes; more than 2,000 charging points across Denmark and 60 bus charging points in Nottingham alone – thanks to a partnership that supports the city’s electric bus infrastructure*.

But the network is set to expand with the UK launch of a new charging point solution that will make hassle-free, fully-managed EV charging available to business customers. After an initial consultation to assess the requirements of each company, E.ON will be able implement bespoke solutions and use 3G/GPRS-enabled charging points for remote monitoring and control of those points.

E.ON will work with clients to optimise the logistics and economics of installing the new technology and expects some businesses to be able to use it not just as a cost-saving measure for their fleets or a brand-burnishing asset, but potentially also as a revenue stream.

The arrival of E.ON’s charging points – which are new to the UK, but have been successfully introduced in Denmark – also enable their owners to provide different levels of service to different people. For example, a business might allow guests or clients to use their charging points for free. But, thanks to the ability to grant access to the system via an app or card, it would be possible to charge a small fee to employees who wanted to charge their vehicles on a daily basis, and a little more (thereby potentially making a profit) to people with no connection to the company who wanted to make use of the same facilities.

There might also be the added benefit of gaining an advantage over the competition. For example, it’s not difficult to imagine how customers who once chose a hotel on the basis of a reliable and fast Wi-Fi connection could soon be making the same kinds of decisions based on the availability of charging points for their EV.

E.ON’s new solution will also offer business customers access to a wealth of data – enabling them to collect detailed information about usage and, as a result, establish how much CO₂ they have saved – or whether they can confidently claim to be carbon neutral. In the coming years, this could be a welcome fillip for a brand’s reputation – to say nothing of the intrinsic reward of being environmentally responsible.

There is no shortage of financial, reputational and moral considerations to drive the future of EVs. The pace is already increasing for the rollout of EVs in the UK, and with the infrastructure to support them a widely distributed electric future will surely only be a matter of time.