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The start point for the best source of fleet information |
To start, Moorthy is quick to mention how much interest there is in electric cars now, and Arval is leading this market trend. She says: "It is a fact that there is increasing interest from the market, and we see that in the SMMT numbers. If you look at the proportion of electric car registrations and look at the proportion in true fleet - it's almost double and then Arval is slightly higher than that number.
"I think a lot of this interest comes from two things. One is Benefit-in-Kind (BiK) - this regime is very favourable at 2% up to the year 2025. This is one of the things we're very aware of in the industry - we need longer foresight, especially as we know the replacement cycle is three- or four-years.
"With the assistance of the BVRLA, we're asking the government to provide a longer foresight on that. So, if we don't have a cliff edge rise, on BiK taxation, which I don't think the government can risk. It should go up gradually, and provide impetus to the market - especially with the cost of living the way it is.
"The other thing driving interest, is poor supply because of semi-conductors and the war in Ukraine. If we look at the number of makes and EV models, it's gone up in the last three-years and we now have real options for customers.
"Between the financial impact of the cost of living, and improved supply of EVs at more price points with much more feasible ranges. All of that is driving the interest in electric cars. This is great for the industry and good for the UK with its decarbonisation target
of 2030."
Moorthy admits there's a lot of focus at Arval on making it easier for customers to transition to EVs and this can be seen in their orders. She says: "To give you a headline statistic, year to date around 27% of our orders are pure electric, and if I add hybrids, we reach 40%. Almost 50% of our order bank is electric - but what are we doing to promote that appetite? A lot of it is focussed on business customers because of the BiK benefits, there's also a little happening with PCH customers.
Firstly, we have an in-house consultancy team, and their biggest focus is on supporting customers with electrification. So, helping them analyse their fleet, seeing whether their fleet is ready to move to EVs and which parts of the fleet can move first. Typically, if you get an EV adopter in a company, things begin to move - so it's important to identify those early adopters based on their profile. Once you've done that you work your way down the rest of the fleet.
"Our customers tend to look at the initial outlay and worry a bit about EVs. If you look at service, maintenance, and repairs, we know there's fewer moving parts, so there's less wear and tear and we anticipate those costs to be lower. When our customers see this, EVs become a more attractive proposition, especially when you build in BiK taxation. So, it's educating customers to looks at EVs differently, look at the whole life cost and not to be put off by the initial investment value. Next is looking at the choice list. Some of the biggest UK registrations haven't been the typical OEMs, because some like the Korean car makers and, more recently, the Chinese have had a supply of EVs available - compared with others with longer lead times.
"We have mid-term products from six to 24 months, and make sure we have a range of EVs available on that. We tell our customers to "try before you buy". So, before committing to a three or four-year contract on an EV, we encourage them to try one for a few months and typically we see people who have taken an EV once, they tend to stick with them. So, it's getting them to make that leap.
"It is also about helping companies think about what they need to do in terms of charging to aid their employees. Helping them make workplace charging available - to make up for the lack of domestic charging.
"As part of COP26 last year, we had some "Leading the Charge" webinars, which were to help other fleets learn from each other. Companies such as Vodaphone and EDF have been case studies and spoke about their experiences."
Moorthy thinks salary sacrifice schemes are critical to EV adoption and are not a short-term solution. She says: "They will be around at least until 2025, as they democratise access to EVs. If you're employed, you could go to a broker, or to a dealer and take it on a personal account. If you can take it through your company, because of the current taxation regime, it means you can get a car with a significant advantage. Typically, if you're a 20% taxpayer - you're not even the highest taxpayer, the difference could be £1-2,000 depending on which models. So, it makes EVs accessible.
"A lot of companies are asking for it but are not replacing their company car schemes. What we're seeing is an HR slant coming in, with salary sacrifice another tool, alongside items such as subsidised gym membership for attracting talent.
"So, it's opening access to EVs at a beneficial rate. We're also seeing a lot of companies asking us to put a salary sacrifice scheme in place for the rest of the employees that can't take a company car by virtue of their job. Nobody wants too many badly polluting cars on their grey fleet where personal cars are used for business use.
Moorthy believes that the more open minded their customers are, the transition to EVs can be quicker. She says: "It could be two, three, or four-months. As we've already mentioned, some Chinese and Korean manufacturers have very good supply. We do work with manufacturers, as some have stock that they are willing to sell, we take it on, then we have campaigns saying cars are available at quicker delivery times. We do all that, and I believe it has helped having wider supply, plus having new brands that our customers wouldn't normally consider. Now we're doing campaign units for our corporate customers, they're more aware and more likely to take these other makes of cars. If they're very specific about what they want, or it's an LCV, you're talking closer to a year.
"Where we're seeing customers with fleets that are quite old, we're asking them if they want to give their cars back earlier and take EVs that we have available now. Where we see fleets that are getting old, with excess mileage, if there is an alternative there, if they switch to an EV we typically won't charge them early termination fees.
"If a customer's drivers are in the right place, or their business needs are in the right place, then that determines the timescale as well."
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