What's Holding Back Electric-Powered Fleets?
In the world of fleet purchasing there are fewer hotter topics than electric cars. At this year's Fleet World Fleet Show, an opportunity to get face-to-face with the big vendors at UK's Silverstone race track, the shift in technology was clearly on everyone's minds.  Despite the range of electric cars being fully booked up to test drive I distinctly got the impression that many attendees were having a spin because they were intrigued, rather than as a precursor to a purchasing decision. There was still a lot of apprehension around whether procuring these kinds of vehicles will provide any benefit to their company at this moment in time and the question is if a greater familiarity can help change that perception.  The obvious issue surrounding the electric option is cost. They may be cheaper to run on the face of it but at a cost of around £30,000 for a BMWi3 the initial investment on these models is significant, in comparison to some corporate fleet contracts where diesel vehicles can be bought in bulk for as little at £20,000. Meanwhile, big strides are being made with diesel eco engines, building the argument that electric ultimately isn't much cheaper in the long-run either.  Parallel to this, there is hesitation from car-leasing companies considering taking on electric vehicles for corporate contracts. Again, the cost comes into play for leasing companies as well as the limited number of charging points; there are charging points at a number of motorway service stations and beyond but that doesn't hold up in comparison to the scale of fuel stations, regardless of which country you're in. The problem has an element of chicken and egg: If leasing companies offered corporate contracts more opportunities in electric cars, the number of public charging points would increase and for large global companies charging connections would likely included at office buildings - but until then it remains a barrier to adoption.  Public sector bodies are equally as hampered in the ability to procure electric cars as many use fleet frameworks which do not include provisions for electric vehicles.
 When discussing the matter with attendees at the Mazda stand, a vehicle manufacturer who have made the decision not to go down the route of including electric cars in their fleet, they were understandably sceptical. They're not alone - by 2020 it is expected that only 5% of the market will be using the electric vehicles, not a desirable figure to justify their investment.  According to UK newspaper, The Telegraph, sales of ultra-low-emission vehicles (Ulevs) are increasing year-on-year, albeit from a very low base, and more slowly than anticipated. There clearly needs to be some confidence building before it becomes a requirement for most fleet category managers, however fleet providers are getting creative in anticipating this trend. Companies such as Bolloré group are planning to combine the requirement for point-to-point electric with car-sharing schemes due in London next year. Meanwhile, car manufacturers like Tesla are taking on the role of leasing the electric cars to businesses themselves.  Again, the industry is looking at a difficult adoption curve: procurement shouldn't invest until there is more value in electric cars and the practicality of charging becomes easier. This won't happen until the demand for electric cars from the procurement market increases. The market signs show it is a slow and painful process but there may be enough enthusiasm for the long-term value proposition to accelerate through these barriers.