Error parsing XSLT file: \xslt\FacebookOpenGraph.xslt Fleets facing difficulties setting EV SMR budgets, AFP says
Cookies on Businesscar

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive all cookies on the Business Car website. However, if you would like to, you can change your cookies at any time

BusinessCar magazine website email Awards mobile

The start point for the best source of fleet information

Fleets facing difficulties setting EV SMR budgets, AFP says

Date: 19 December 2023   |   Author: Sean Keywood

Fleets running EVs are finding it challenging to set budgets for SMR, according to the Association of Fleet Professionals (AFP).

The organisation said fleets were facing significant variations in the SMR budgets being allocated by vehicle leasing companies for particular models over the length of a contract.

The issue has been covered in a new report on EV SMR, which the AFP has produced in conjunction with fleet consultancy Expense Reduction Analysts. 

AFP chair Paul Hollick said: "For some time, there have been conversations across our membership about leasing company EV SMR, with questions asked about some of the costs being charged. 

"As a result, a number of fleets have unbundled the SMR element from their lease and either brought management in-house or employed a specialist third party."

Hollick said that with EV SMR being a relatively new management discipline, setting an accurate budget was far from easy.

He said: "There are few or no historical precedents and even the most well-informed experts have limited data available. There are lots of projections around of varying value but limited real-world experience. Leasing company fleets are in the same boat as everyone else when it comes to this.

"However, we have found variations that in a few cases run into four figures between SMR budgets set for same vehicle by different leasing companies. 

"Our advice is that fleets should engage in an active dialogue with their suppliers where they feel that the budgets set are incorrect. This is very much an industry conversation."

The AFP said an interesting aspect covered in the report was that certain leasing companies seemed to favour certain manufacturers, specific models and even types of EV when it came to setting budgets.

Hollick said: "Generally, dedicated EV manufacturers have much lower servicing budgets applied by leasing companies compared with other brands, we have found, particularly when set alongside the German premium manufacturers."

The report also breaks down the different elements of EV SMR, and finds that the budgets allocated to tyres are the most problematic.

Hollick said: "Tyres make up the vast majority of EV budgets and it does seem clear that these vehicles tend to wear them out faster than petrol or diesel cars, while the tyres themselves are generally more expensive and sometimes are designed with lower tread.

"This expense can largely counteract the lower servicing and inspection costs EVs enjoy compared to internal combustion-engined vehicles. 

"Furthermore, the increased weight of EVs and their high torque levels mean that wear rates will depend very much on how vehicles are driven, leading to large potential variances in cost even from driver to driver.

"All of this represents a higher financial risk to lessors and could account for a large part of the budgetary variances we are seeing."



Share


Subscribe