20 Oct 21

“Electrification? Just do it!”

Sustainability is on everybody’s minds. But how should fleet managers deal with the topic? A good place to start is to learn from the best. Last November, Steffen Krautwasser (pictured), Head of Global Car Fleet at SAP, won Fleet Europe’s European Green Fleet Manager of the Year Award. How green has his year been? 

SAP is a global technology company with headquarters in Germany. It has a fleet of about 27,000 vehicles, all but about 3,000 of which are in Europe. As a company, SAP pledged to go carbon-neutral by 2025. Fleet-wise, SAP wants to have one-third of its vehicles electrified by that same year. 

Mr Krautwasser, how’s that going?

“SAP has recently upgraded its target. We as a company want to go carbon-neutral by 2023. And if I look at our fleet, we’re currently overfulfilling our target as well. More than half of the orders for new vehicles this year were for BEVs or PHEVs.”

How do you get so many of your employees to choose electric vehicles? 

“Speaking for Germany, where I know the situation best, we can rely on important and attractive subsidies and tax incentives from the government. Then there is the fact that the EV models on offer have filled in the model gap on the market. Before, it was mainly luxury and small EVs. Especially since this year, we see more and more mid-class EVs. And last but not least: we at SAP actively support the choice for EVs. Not just by making those models available to our employees, but also by communicating a lot. We also offer a significantly higher car budget if people want to opt for an EV. And we have a programme to help with home charging, plus we also pay back the cost of charging at home.”

Your philosophy for reducing emissions is ‘avoid, reduce, compensate’. Can you explain that?

“First off, avoid emissions where you can. That also implies that we see PHEVs as a bridge towards BEVs, but that’s not something we enforce. Secondly, reduce emissions as much as possible. We educate our drivers on fuel consumption by offering them transparency on their usage and comparing this with greener alternatives. One of these is our flexible mobility budget, which is currently being trialled with 500 employees. And finally, there is compensate. We currently have about 1,500 BEVs and 3,500 PHEVs in our fleet. Even given the high order rate, we won’t be able to phase out every ICE vehicle in the fleet over the next two years. So we’re going to have to look into some form of carbon compensation.”

What has been the impact of the pandemic on green and sustainable fleet management? 

“Something has definitely changed in how we live – and work. At SAP, we already had quite a large share of working from home, on average about two and a half days per week. We notice more people coming back; because it’s good to meet with people face to face. But people are also happy to do less commuting. So there’s more working from home. About 90% of our staff work from home. And we notice this, for example in our lower fuel expenditure. You could wonder: is the car then still the right benefit to give to employees? In many cases, the answer is still yes – because it serves as a strong motivational tool. We are in the relatively unique position that we own our vehicles. If they have less mileage after a given time – say, 80,000 km after three years instead of 150,000 km – that means we’ll get a better deal for them when we remarket them. So that’s a plus.”

“A definite minus is the fact that delivery times for new vehicles are absolutely horrible at the moment – in some cases up to 15 months. That is certainly causing issues. So we’re asking people to please drive a little bit longer with their current vehicles before they get their new one.” 

You mentioned your flexible mobility budget as an add-on to the company car. What can you tell us about that? 

“After the first phase in Berlin, we’ve expanded it last April to cover other areas as well, including more rural areas. Reactions are really positive so far; there’s a high degree of customer satisfaction. As you know, we have a unique system whereby we don’t limit mobility options beforehand. It’s up to our employees to choose, and we will refund from their mobility budget. Pending approval, of course. A train subscription is okay, but we’ve also had suggestions for cruises or ski lifts, and that’s beyond the scope of our programme. Although: in some countries, ski lifts are used for urban transport. So that is allowed!”

What was the experience of those new users in rural areas?

“Their satisfaction rate was higher than users in an urban setting, even though the options for mobility alternatives are more limited. That seems paradoxical. But when we asked them, they said things like: This is the first time I feel appreciated for cycling instead of driving to work. And they do get to use the budget on things like longer-distance train rides, etcetera. So overall, very positive feedback.”

What’s top of your To Do list for 2022? 

“First of all, to continue the transformation from corporate mobility based on the Fleet perspective to one based on the Mobility perspective. The flexible mobility budget, which we hope to expand soon, is a large part of that. Secondly, we will continue the process of electrification. And thirdly, we will continue to present our employees with targeted communication and with the right mix of offers to help them reduce their CO2 emissions.”

Finally, what’s your best advice for fleet managers who are interested in electrification, but perhaps also a bit daunted by it?

“Just do it! Give it a start. You can discuss and calculate until you see blue in the face, and it’s good to be prepared. You can’t entirely rely on public charging, for example, because that will drive up the cost significantly. But you learn best by doing. And by doing, you also find out that a lot of people really love driving electric. I’ve heard plenty of people say: I don’t want to go back to a petrol car! Yes, we’ve converted quite a few petrolheads to electroheads! Also: going electric is not just about sustainability. It also helps to lower your TCO.”

Now that you mention cost: how have you dealt with the recent spike in petrol prices?

“The fuel price rise did not come as a surprise to those who follow the market information. So we were able to plan for it. But the fuel price is expected to remain high, and perhaps go higher still. Up to an extent, that is something you have to accept. The only way to mitigate that is to reduce mileage. Because we are still in pandemic mode, we do drive less than before. And we communicate to our drivers: less mileage is good for the environment, good for SAP and good for our drivers’ health.”

Image: (c) Ingo Cordes/SAP

Authored by: Frank Jacobs