Analysis
21 Sep 22

60% of fleet vehicles would save money by switching to EVs

The total cost of ownership (TCO) of electric vehicles has fallen so quickly that 60% of fleets could save money by switching vehicles to electric power, according to a new study.

The research by telematics specialist Geotab used connected vehicle technology to investigate the driving patterns of 46,000 internal combustion engine (ICE) cars and light commercial vehicles belonging to 1,300 fleets in 17 European countries, including the major markets of France, Germany, Spain, Italy, and the UK. 

By using real-world electric vehicle performance data, Geotab compared the operating cost of the ICE vehicles against the projected costs of battery electric equivalents.

€9,508 saving per vehicle

It found that fleets could expect to achieve average savings of over €9,508 per vehicle, due to lower energy and maintenance costs, albeit over a longer than average holding period of seven years. Government purchase incentives provide further savings in some countries.

From an environmental perspective, the switch from ICE to EV would save 5.7 tonnes of CO2 per vehicle over the same seven-year period.

Klaus Böckers, Vice President, Nordics, Central & Eastern Europe, Geotab, said: “Fleet electrification is a gradual process and this study highlights that companies should recognise that profits and sustainability go hand in hand. Sustainability is becoming an important part of every company’s mission, and transportation is an important component of that mix.”

Identifying vehicles to switch to EV

Geotab’s EV Suitability Assessment tool identifies which existing fleet vehicles are a good fit to transition to battery power, recommends suitable EV replacements and calculates how much a fleet can save in both cost and carbon emissions.

Its analysis found that for 86% of the 46,425 vehicles studied, an EV alternative is available that would be capable of completing 98% of journeys without having to recharge the batteries.

However, the cost effectiveness of EVs varies from country to country, depending on a variety of factors including government incentives and average annual mileages. With 65% of EV cost savings due to lower energy expenditure than diesel equivalents, the savings increase as mileages rise.

Regional driving patterns impact EV viability

Comparing Germany’s €9,000 purchase incentive to the UK’s £1,500 (€1,700), for example, makes 73% of German vehicles both range capable and economical to switch to electric, compared to just 58% of UK vehicles; and Germany would still have a significant advantage even if no purchase incentives were available in either country.

While the study provides an umbrella view of the prospects for electrification across Europe, Geotab advises that: “As fleets look to transition their operations towards more sustainable practices, including EVs, it is critical to review fleet-specific data to ensure the fleet’s needs and objectives are met.”

Edward Kulperger, Senior Vice President of Geotab, will be speaking at the Fleet Europe Summit on 17 November. Register now.

Images: Shutterstock, Geotab

Authored by: Jonathan Manning