29 March 2021
Over the years, what is involved in the Total Cost of Ownership (TCO) of petrol and diesel cars and vans have been well-established.
But with electric vehicles, there are some new areas that you may have to think about - particularly during day-to-day operation.
One of the most important elements of good fleet management is having a clear understanding of Total Cost of Ownership. For many fleets, especially those with commercial vehicles, one of those elements - downtime - is very important. The more time those vehicles are on the road, the more work they complete and the better the return on investment for those vehicles.
For petrol and diesel vans, downtime can occur when they have maintenance issues or require repair. But in day-to-day operation, they don’t need to stop for long, especially when refuelling. With electric, this may be different.
The new LEVC VN5 electric van, for example, will take half an hour to charge from 20%-80% on a 50kw public charger, adding 50 miles to its range. If employees need to do this once or twice a day, between getting to jobs or deliveries, then this ‘micro downtime’ may need to be factored into operational plans.
There are a number of factors to consider in the cost of this micro downtime in order to employ electric vehicles – whether it be vans, or cars - in the right role. By understanding these and creating a full picture of the inherent costs, you will be able to decide if electric is the right way forward, or whether for the time being, petrol or diesel are still more suitable. Here are some areas to think about:
The cost of charging and routing
Location is very important to the efficient usage of electric vehicles. In the right environment they can work extremely well, but you need to understand the daily mileage they are doing and whether the distances involved are having an unnecessary impact on productivity.
If they are being asked to undertake mileages that are beyond their range, then how much of the working day is being lost to charging? Added to this is the provision of charging in a given area. What chargers are nearby and what is their availability?
At Allstar, we have worked hard with customers over the years to limit the amount of time employees spend looking for fuel stations, with innovation such as our Co-Pilot app. For electric that issue is even more important.
There is no point an employee having an electric car or van, and working in an area where there are few chargers, or there are not enough rapid chargers, which means getting enough charge takes far longer than expected. This time needs to be logged and understood. It might be that the work scheduled and the routes involved mean that in the middle of the day employees can charge, check emails, make calls and have lunch.
But if they are charging later in the day, for example, effectively losing an hour or more of working time, that could have an effect on the productivity of your business, costing you money.
An engineer paid £20 an hour, who has to stop for an hour every afternoon to charge, could be costing you £100 a week in time when they are not working, for example. Extrapolated over a year, and over the whole fleet, could see the costs of unworked hours become high, and the savings you have made in reducing petrol and diesel purchases could be wiped out, or worse.
In this case, you may need to look at how your business operates: should you change routes, working hours or stipulate that top-up charges take place during breaks? It is important to set ground rules for such instances.
The cost of expenses
If employees are going to stop more, and spend time waiting for their vehicles to charge, they are likely to incur more expenses in the process.
You need to have a clear policy on what is an acceptable purchase while they are waiting in places such as services, supermarkets or garages for the battery to be recharged. Can they pay for wifi, or food and drinks?
During a usual working routine, buying lunch is not considered an allowable expense. But you will have to have discussions with your staff around what defines the usual working routine. Having to stop for an hour to charge, not always at a location they might have chosen, at any time of the working day, might not seem routine for some and so they may claim back from their employer.
Clarifying atypical expenses such as this is important otherwise you may be racking up expenditure that is hidden, and which should be applied to the total costs of running EVs.
Then there is the issue of getting receipts to reclaim for charging: there are many different providers with many different systems. In what format do you want your drivers to supply these to you?
Good data and fleet management can help
Without a doubt, the transition to electric vehicles produces new issues that fleets have not encountered before – and many opportunities too, it must be noted – but these can all be solved with good fleet management processes and clear data.
At Allstar, we have been helping fleets with this for many years, and many of the same processes that work for petrol and diesel can be applied to electric.
Our Allstar One Electric card gives you a complete insight into where all charging took place, and at what time. It gives you a breakdown of cost and speed of the charge.
Consequently, you will be able to build a picture very quickly of how your cars and vans are being used, their cost and time on the road, or not. You are able to easily understand the cost of charging your vehicles, and streamline expenses.
This data can then be applied to help shape your operational processes and the way you blend electric with petrol and diesel, by allowing you to look at productivity too, and see if it requires a change in the way you work to accommodate EVs.
Our Allstar Expense card can also help to control on-the-road business purchases. You can set limits for what can be bought and also the type of purchase too, ensuring that the move to EVs doesn’t incur hidden expenses as well.