The Race to 2030: The Challenges and Opportunities of Adopting Commercial EVs Ahead of the UK’s Ban on ICE Sales

The adoption of EVs for commercial fleets is one of the biggest step changes the mobility sector has, and may ever, see. While the adoption of EVs brings a lot of long-term financial, environmental and social benefits, the 2030 ban on ICE vehicles in the UK brings a whole host of challenges too. This post explores the benefits of fleet electrification, as well as spotlighting the challenges and opportunities organisations will face.

The Benefits of Adopting Electric Vehicles

It is becoming ever more commonplace for fleet operators to consider introducing electric vehicles into their vehicle mix. For example, Transport & Environment found that in 2023:

• 22% of all corporate car registrations were Battery Electric Vehicles (BEVs)
• 75% of all BEVs sold in the UK were to corporate customers
• 74% of new Plug-in Hybrid Electric Vehicles (PHEVs) were in the corporate market

Primarily this is driven by net-zero ambitions where organisations have committed to converting their operations to zero emissions by 2030. Many have committed to this via the EV100, a coalition of businesses to practically and politically instigate real change.

The adoption of EVs is also good for business for several reasons such as TCO (total cost of ownership), and the image or branding of the organisation. Let’s explore the advantages of an electric fleet further.

The Financial Benefits of Commercial EVs

Despite the higher initial purchase price, the cost of running and maintaining an EV fleet is often lower in the long term. The most obvious savings come from fuel, especially as petrol and diesel prices continue to rise.

The cost of electricity is generally much lower, especially if the vehicle is charged at off-peak hours or via renewables. Spread over a whole fleet, this can equate to significant reductions. For example, the electric Vauxhall Vivaro, a commercial fleet staple, is at least 25% cheaper to fuel per mile compared to its diesel counterpart and still has an effective range of over 200 miles. Similarly, with fewer moving parts than ICE vehicles, EVs can cost less to maintain over their lifetime.

What’s more, EVs are exempt from London’s congestion charge, saving operators £15 per day to encourage EV adoption. While ULEZ generally doesn’t affect fleet operators with newer ICE vehicles, the bandings may shift in the future to encourage zero-emission options further.

The Reputational & ESG Benefits of EV Fleets

Many consumers are now very conscious of the environmental impact of their purchasing behaviour, and choosing who they do and don’t engage with accordingly. In the EU in 2023, 73% of people said a product or service’s environmental impact is important to them, while 60% have based their decisions on this.

Switching to EV commercial fleets not only allows companies to meet their ESG obligations, but they can also use it as a marketing and branding opportunity.

LCVs and HGVs have a disproportionately large carbon footprint compared to cars. These vehicles only account for 12.4% of the vehicles on the road but account for 38% of the UK’s carbon emissions.

Looking at HGVs in particular, they represent 1% of the vehicles on UK roads but are responsible for 20% of the emissions – about the same as the UK’s air, bus and shipping emissions combined. In fact, electrifying the UK’s entire HGV fleet would be the same as taking 13 million cars off the road.

If you’re trying to reduce your business’s carbon footprint, switching to an electric fleet will have a considerable impact. It’s a fantastic way to demonstrate your corporate social responsibility, and the impact can be measured through backend solutions to prove to investors and clients that you’re committed to sustainability.

The Challenges of Adopting Electric Vehicles

While there are challenges associated with switching to an electric fleet, there are also opportunities, which we explore below.

Investment in Vehicles & Infrastructure

Often the biggest hurdle, the investment required for the transition can be significant. It’s not simply a case of buying new vehicles. First, you’ll have to determine the requirements of your new fleet, the ideal EV for the job(s) and how many you’ll need.

You will also need to address how you will charge them. Will you use public charging networks or install your own chargers? Do you have the physical space and adequate power supply for them, if so?

With commercial fleets, the charging infrastructure itself is just one piece in a complicated, yet solvable, problem. The solution is going to be driven by both technology and optimisation.

When it comes to wide-scale fleet electrification, assessing the granular detail of fleet operations is vital. Accelerating the transition means data-driven decision-making, identifying the most suitable candidates, adapting operations to facilitate the transition, and optimising energy and infrastructure costs to reduce the Total Cost of Ownership (TCO).

The recharging ecosystem for any business depends on where the vehicle is located when it isn’t working (sleeping). Some fleets will rely on residential or decentralised (public) charging. Others that centre on the depot will require multiple chargers and, in many instances, hefty grid infrastructure upgrades.

Then there’s the financial equation – from rented units to fully managed services, million-pound investments to shared revenue or £/mile solutions, and everything in between. Because the refuelling of vehicles is moving to the business car park or depot, and because this change is new and growing, the sustainability of the solution – from scalability to choosing renewable energy sources – must be hard-wired into every business plan too.

However, opportunity beckons.

The Opportunities of Adopting Commercial EVs

A fleet transition is an excellent time to scrutinise and further refine vehicle operations for many organisations. It may even be the first. Improved operational efficiency can be a welcome benefit of commercial EV usage.

Operational efficiency means that every time you plug your EV in to charge, it should happen as a part of an optimised charging schedule. Any time your business has to plug the EV in unplanned is a period when the assets aren’t working efficiently. Fleet managers can take advantage of various tools to plan the fleet’s energy requirements and charging schedule automatically and comprehensively.

Technology solutions, like Mer’s Fleet Portal, allow fleet managers to optimise operations in real-time. Complex algorithms take in all the data and dependencies (route planning/dispatch tools, vehicle telematics and energy market signals etc.) and create a charging schedule to ensure each vehicle has the optimal energy for its purpose.

Also, by having control over when and where the vehicles recharge, further savings can be made via optimisation of the electricity supply, ensuring that the vehicles charge at the greenest and cheapest times.

As many fleet managers are starting from a clean slate, this kind of operational optimisation can be integrated with other logistics tools from the outset. It will maximise ROI, future-proof infrastructure and be key to driving successful commercial EV adoption ahead of the 2030 deadline.

The upcoming ban on ICE vehicles, alongside ever-increasing fuel prices, is pushing many organisations towards fleet electrification. While it represents a challenge, the benefits and opportunities it provides are almost always worth the investment. However, to avoid costly mistakes, we recommend engaging with EV charging consultants like Mer who can guide you through the process. Contact us today to find out more.