In Focus: E.ON

“They gave us a decade, I suppose,” says Jarrod Smith, who has quite the job title. He is senior contract manager for business travel, meetings & events and fleet at E.ON, one of the Big Six energy companies, and he is describing the brief from the company’s German HQ to electrify its entire European fleet by 2030. 

That came towards the end of 2019, and the UK arm has close to cracked it with cars. It helped that the edict came not long before EV company car tax rates hit rock bottom in April 2020, so much so that, when the UK board settled on its course of action in quarter one of that year, it decided to leapfrog hybrids entirely and go full-electric from the off.  

“We made a very early call on the company car fleet,” Smith continues, “we put a suggestion forward to the board that we thought we should start implementing an EV and PHEV-only fleet renewal process, which they agreed with – but they didn’t agree with the PHEV aspect. They made what I would call a very bold and brave decision at the time to just go for pure EVs.

“Our idea of putting the PHEVs in there was to use them as a stepping stone for the individuals to move from ICE to PHEV to EV – it was kind of a natural progression to electric – but they [the board] were a bit braver than that, which, in hindsight, has got us to the position and the advanced stage we’re at now, so it
was a good decision.”

As of the end of February, E.ON had 777 company cars, 702 (90%) of which were electric. That left 67 PHEVs or self-charging hybrids and eight petrol and diesel cars – all older models due to be electrified on renewal. According to Smith, that led its contract hire supplier, Lex Autolease, to dub it one of the most advanced company car customers in its entire fleet for electrification, while the form also shaved five years off its all-EV target for cars.

Teething problems

It was not plain sailing at the beginning, though. As Smith explains, the relative lack of choice and availability of battery-electric cars around the turn of the decade meant an EV-only policy was not the easiest thing to instigate at the time – with or without the pandemic. 

“It was a difficult time for everyone, but adding to the complexity was the fact there weren’t many [electric] models from the manufacturers out there at the time. There were your Nissan Leafs, your Renault Zoes and probably a few Teslas, but that was about it, so the choices were very, very limited.”

That was initially a hard sell to drivers, who were not happy about being pigeonholed, and a number initially opted for cash allowance instead of a company car. However, the move coincided with the lowest benefit-in-kind percentages in living memory for the cars the company was pushing, which is not a bad carrot. 

“That was one of the biggest incentives we could give to our company car drivers at the time,” says Smith, “in that first year, if I’m being honest, there was a bit of a mutiny, because of the lack of choice, the lack of infrastructure around the country and all the normal kinds of EV myths that were out there. But, yeah, the BIK aspect was really the big incentive that we could give people at the time – and that incentive’s still there nowadays.”

A widening offer

Having spent the past five years electrifying conventional company cars, the firm is now looking to do the same with three “bolt-ons” to the main fleet: salary sacrifice, cash allowance and rental. The equally low-tax status of the former means it should be an easy sell to employees – or at least that is what salsac suppliers tell us – but Smith says it has yet to gain serious traction among E.ON staff, not because it is perceived as a poor benefit, but because of the difficulty of getting the word out.  

“The sacrifice scheme’s actually managed by our HR rewards team as part of our rewards benefit package,” he explains, “I suppose every UK employee is eligible, and we’ve got, I think, around 10,000 UK employees now. It only started about two years ago and we are a bit disappointed, if I’m being honest, because we’re only up to about 200 vehicles at the moment.

“We got some industry figures prior to the scheme going live, and they suggested between 2% and 5% was probably the norm for companies with our sort of number of employees who you could expect to take on a salary sacrifice car – and the benefits are fantastic. So, I’m a little bit surprised it hasn’t gone perhaps as well as we thought it might.  

“Sometimes, with new schemes, it takes a bit of office gossip and people talking about the benefits of the cars before it starts spreading a bit wider. I think if everyone were based in the office five days a week, like we were prior to Covid, that kind of office gossip and that messaging would get around a lot quicker. I think now, because people work remotely and away from each other – perhaps they’re only going into the office one or two days a month – maybe that’s reduced the uptake slightly.”

At the time of our call, Smith said the company was considering an EV drive day at its Coventry headquarters as part of a broader range of measures to promote salary sacrifice. It did the same for company car drivers around the time of the original push for electric, and he says it proved a good way to jumpstart the initiative. 

“We did a joint EV day where we got about 10 different makes and models on site, and anyone could come and have a go. That kind of got it up and running… and perhaps it’s something we ought to do again in 2025 to give it [salary sacrifice] a push, because it’s a great scheme, and the benefits are fantastic.”

Cash conversion

Drivers who opt for cash allowance are also in Smith’s sights. He says around 350 employees in the company car scheme are cash takers, and he began promoting the benefits of the former in the middle of last year. 

“We did a couple of promotions about the company car scheme, just trying to advertise the benefits of being in it,” he explains, “as a result of that – and me chasing a couple of times as well – we got 50 of those people, and they’re now in electric company cars.

“We hadn’t necessarily concentrated on them previously… and again, part of our 2025 strategy is to start working on those 300 that are left, because at some point, there will be a decision with the board about whether we mandate that. We’re financing those cash takers and still paying the money for that car allowance, so do we then stop pushing those people into EVs if they’re not naturally progressing? We want to do it all naturally first, so we’re not forcing people down the route, but there comes a time when there’s going to be a small group of people who just aren’t going to make that move.”

Hire power

The third and final of the bolt-ons is rental – also not an easy thing to electrify. While hire companies will happily trumpet their EV fleets, the drop-and-go nature of rental does not marry up well with EVs, especially if the driver is unfamiliar with them. 

Smith agrees that electrification has been tough on the rental sector: “They’ve been a bit slow on the uptake, but it’s probably harder for them to get their fleets to EVs over time. All of a sudden, they’re having to adopt their depots to have a lot of EV chargers, for example. Then what happens when they’ve got a delivery, and they’ve got to get it up to a 100% charge before they drop it off? There are lots of challenges.”

He says E.ON typically gets through around 150-200 hire cars a month, the EV share of which was 15% in 2024. He is aiming for 50% this year, which is a big jump, and plans to promote them “naturally” in the coming months, then potentially start mandating electric rentals in 2026 if take-up is sluggish. 

However, one of the methods already in motion is to supply drivers with something a bit tastier than your average cheap and cheerful rental car. 

“Hertz [E.ON’s go-to rental firm] are increasing their range of Polestars quite significantly,” Smith explains, “that’s a great selling point for us, because we can say, ‘actually if you don’t have a group B Fiat Cinquecento or a Vauxhall Corsa or something – you’ll get a Polestar if you choose an EV’. 

“And I must admit, the kind of feedback we’ve had from that 15% of colleagues who are having EVs as their hire cars – they would never go back. They absolutely love them.”