EVs already proving cheaper to run, says major UK fleet
Committed to operating a zero emission fleet by 2025, Mitie has found its 1,000-plus electric cars and vans are already more cost effective than petrol or diesel vehicles.
Understanding where company cars and vans ‘sleep’ is crucial to the success of fleet electrification plans, according to one of the UK’s largest fleets.
Facilities management and professional services company Mitie operates 7,200 vehicles and will transition them all to electric by 2025. It already runs 1,080 pure electric vehicles and will have a symbolic 2,021 EVs by the end of this year. Its ambitious goals mean that for the next five years Mitie will need to switch 125 vehicles every month from internal combustion engines (ICE) to battery power to hit its objectives, said Simon King, the company's director of sustainability and social value.
Mitie has pledged to reach net zero by 2025 for its operational emissions, and with vehicles accounting for 90% of Mitie’s carbon emissions, the fleet is at the heart of its sustainability plans.
Fleet management revolution
Its bold programme, however, is turning traditional fleet management on its head, King told the EV Forums.
With ICE vehicles: “most of the focus is on the selection of the correct vehicles, and on driver behaviour and safety. But we have been able to take infrastructure to granted thanks to filling stations,” he said.
The choice of appropriate vehicles remains paramount with EVs, but the primary focus has to be on charging and its associated infrastructure, explained King. Establishing the optimum home and workplace infrastructure, and providing access to the right public charging infrastructure is vital, alongside: “How you bring all of that together with the data, management information and scalability, and how that links into your broader initiatives, like renewable energy, within your organisation,” said King.
Mitie’s fleet, both cars and vans, is largely home based, so installing charge points where its employees live has been central to the business’s zero emission goals.
“The first question I ask is ‘where do your vehicles sleep?’ – because this is where you need your EV infrastructure. If every vehicle starts the day fully charged, in most cases it will do a full day’s shift without being recharged. But if you haven’t got the charging infrastructure where the vehicles are kept overnight, then the whole solution falls apart,” said King.
While nationwide figures indicate that 65% of people have off-street parking where a domestic charge point can be installed, this percentage falls to 55% for Mitie’s commercial vehicle drivers (there is a clear correlation between employee salary and off-street parking at home). As a result, Mitie has concentrated its early electrification efforts on employees who can install a home charger, and is looking for local on-street charging solutions for other workers. These would be far more practical and convenient, said King, than the hubs of fast-chargers that are securing the lion’s share of charge point investment.
Reimbursing drivers for home electricity
Mitie has also had to address how to reimburse its van drivers for electricity used while its vehicles are plugged in at home. Official government mileage reimbursement rates cover the cost for electric cars, but are insufficient to cover the cost of power used by LCVs.
Drivers risk being out of pocket and even if the reimbursement process works you have a cash flow impact, which for lower paid employees is a real challenge,” said King. “So there needs to be a solution to pays directly for electricity used at employees’ homes from the organisation. There are organisations that do provide this now.”
While Mitie will pay for only one home charge point for drivers of electric company cars – if they move house they will need to pay personally for a charge point at their new address – it would potentially cover the cost of installing more than one charger for its LCV drivers who move house.
“On our commercial fleet if we don’t put chargers in, people can’t drive EVs, and that’s an operational requirement. It’s a risk and if staff leave you will have to absorb some extra cost, it’s a necessary cost of transition,” said King.
Limited workplace charging
Mitie will have installed 1,600 charge points at homes by the end of this year, accounting for 85% of its charging, but has only put in 100 workplace chargers, a reflection of where its EV fleet sleeps. Workplace charging accounts for only 10% of Mitie’s charging, and King advised other fleets that are starting to adopt EVs to assess the use case of charge points in office car parks. Are vehicles parked long enough to charge at a slow speed, do their batteries really need a top-up or are drivers plugging them in out of habit, and is their sufficient capacity at the site to supply the power? On-site electricity generation from solar panels and on-site storage might prove to be cheaper than capacity upgrades, he said.
“And do really early landlord engagement,” added King. “It continues to amaze me how long it takes to get landlord approval to do things that upgrade their buildings.”
High-speed public charge points account for only 5% of Mitie’s charging, an emergency top-up that is rarely required by its vehicles. The company’s own research, based on telematics analysis of its mid-sized vans, found that 75% of journey days are shorter than 100 miles (160km), 88% are less than 143 miles (229km) – about 70% of their WLTP range – and only 4% exceed 205 miles (328km), the vehicles’ WLTP range threshold.
“But if you ask the business units the drivers all do 250 miles (400km) per day!” said King.
Mitie is still looking for an enterprise payment solution for drivers who do need to use public chargers. At the moment most drivers have to join multiple charging networks, using a credit card to pay for charges, and then reclaiming the cost through their expenses.
“We need all charge point operators to be on one payment mechanism, with one invoice coming into the organisation for the fleet directly each month. We are still some way off that but I am reassured by several suppliers that this will come in over the next five or six months,” said King.
TCO of EVs is cheaper than diesel
The positive news is that Mitie’s experience of running more than 1,000 pure EVs is already showing their total cost of ownership to be more competitive than the diesel vehicles they replaced for cars and mid-sized LCVs (up to 2.5 tonnes).
“If you do a proper wholelife cost analysis of your fleet, if you’re running LCVs and cars and it will come out cheaper to run pure electric today,” said King. “Anyone who is putting a diesel company car on their fleet is costing themselves a fortune. Anyone who is putting a mid-size or small diesel van on their fleet is costing themselves money. Electric is one third of the cost of diesel – can you afford to give that up? And when you start to look at taxation there are so many different incentives. And that’s just financials. We are 18 months to two years past the point where sustainability is a cost. It’s now the right thing to do for people, planet, profit and it’s a policy imperative as well.”