Incentives still vital for UK’s electric fleets, Geotab warns

Electric incentives are still needed, according to Geotab

Pan-European study highlights fragile financial advantages for British businesses

British fleets’ journey profiles are the most suitable in Europe for switching to electric vehicles, but premature withdrawal of incentives could be "stifling" the business case, connected transportation specialist Geotab has warned.

With only two or three replacement cycles before sales of non-hybrid cars and vans end in the UK, the company analysed 12 months of anonymised telematics data from 46,000 vehicles across 17 countries using its Electric Vehicle Suitability Assessment tool. 

This tool suggests where electric alternatives are already available and calculates their potential to reduce CO2 emissions and operating costs (including procurement, maintenance and fuel, but not tax or purchase incentives) over a seven-year lifecycle.

The results show electric vehicles meet the range requirements of most (89%) UK fleet vehicles – more than any in other country – but the business case is more fragile. 

Average savings were £5413 per vehicle, and only 55% of cars and vans – the lowest percentage in Europe – would be cheaper to run if they were electric. That compares with £7960 and 59% across the wider region.

David Savage, Geotab’s vice president UK & Ireland, said: “One of the main reasons for the lower economic viability appears to be linked to utilisation. The fuel cost saving opportunities from transitioning to electric can account for 65% of the total cost savings over the lifespan of a vehicle. 

“According to our findings, on average, vehicles in the UK were amongst those driving the fewest miles each year [so] will not have maximised the same degree of fuel cost saving opportunities from going electric as other countries.”

Savage said this shows purchase incentives are still important, especially as supply chain challenges are delaying electric vehicles reaching price parity with combustion-engined rivals. 

Recalculated to include the £1500 Plug-in Car Grant (PiCG) that was axed in June, 58% of UK cars and vans are economically and operationally viable for electrification – a 3%-point uplift. 

The analysis does not include the tax incentives for businesses, and Geotab noted that fleet managers can broaden the business case. For example, telematics data might suggest opportunities for range-extending mid-cycle charging stops, training drivers to use features such as pre-conditioning to improve efficiency, and Savage said recent fuel price volatility had highlighted further benefits too.

“Spikes in fuel costs are felt hard by fleet operators, as fuel is one of the largest proportions of their operating expenses,” he said. 

“Transitioning to electric opens the door to energy independence and reduces reliance on fossil fuels, [if] using renewable energy sources. [This] isn’t possible with an ICE-based vehicle, which is typically more exposed to energy market volatility.”