ADVERTISEMENT FEATURE: Do not focus on the purchase/P11D price when choosing electric vehicles, advises expert
06 July 2022
Businesses deciding whether plug in hybrid and battery electric company cars offer good value for money should not be deterred by their higher purchase price or P11D value.
That's the advice of Lee Brown, managing director of Grosvenor Leasing and Interactive Fleet Management, who explains that, while the initial outlay on electric vehicles is higher, their whole life cost while on fleet works out cheaper in the long run compared to equivalent petrol or diesel models.
"Let's take, for example, a Skoda Octavia Diesel Estate 2.0 TDI 200 vRS 5Dr DSG," says Lee. "This is a diesel car with a P11D value of £35,010. Its electric equivalent is the Skoda Enyaq IV Estate 150kW 80 Loft 82kWh 5Dr Auto which has a P11D value of £40,915.
"At first sight, the electric model looks expensive and it would be easy to assume that, at almost £6,000 cheaper, the diesel will cost you significantly less.
"However, if you look at the whole life cost of each vehicle it reveals a very different picture.
"The whole life cost takes into account factors such as running costs, maintenance, tax, fuel/charge and future resale value and shows that the electric model is much better value over its period on the fleet.
"Using the whole life cost calculation, the diesel model works out at £860.50 per month whereas the electric sits at £726.51 per month, which means the electric model is £6,432 cheaper overall during a four year period as a company car."
The Grosvenor Group is the UK's largest privately-owned contract hire and fleet management specialist and its 0Zone solution, which has been helping companies make the smooth transition to ultra-low emission and electric vehicles since 2017, has won multiple awards for its advice and support around creating greener fleets.
Companies such as Glenmorangie Whisky, Weetabix, Whistl and Tata Steel have all benefited from Grosvenor's advice and support, and by developing policies based on whole life costs has been the stimulus for many companies to see the long-term benefits of moving to electric vehicles.
As a result, over 55% of all new company cars delivered by Grosvenor Leasing, and its specialist fleet management business, Interactive Fleet Management, have plug-in technology.
As the choice of electric cars entering the UK market is growing rapidly, more than 60% of drivers say they would consider an electric vehicle as their next car.
"Once the whole life cost policy is in place, and the drivers are on board with the process, the transition to a zero emission future will effectively take care of itself," says Lee. "It's just important to make that initial shift from each vehicle's up front cost to its overall time on fleet when budgeting around vehicle choices."
In recognition of its advice and support around greener vehicles, Grosvenor Leasing was recently awarded a top accolade by Whistl, having been named its 'Supplier of the Year 2022' as part of Whistl's supplier conference focusing on ESG (Environmental, Social & Governance).
The award was given at a ceremony in London in recognition of the support from Grosvenor in helping Whistl develop a new company car policy to encourage drivers into ultra-low emission (ULEV) and electric vehicles (EVs). Grosvenor used whole life expenditure to develop the new car choice list, offering a far better reflection of the true value of choosing ULEVs and EVs, and this enabled Whistl to factor in the long-term outlay while reducing its carbon footprint.
Grosvenor also created a cost effective fleet by moving them out of Mercedes Sprinters and into Peugeot Boxer vans.
In addition to this transition, Grosvenor developed some new initiatives to help Whistl move into electric vans as quickly as possible when suitable models became available from the manufacturers.
"The team at Grosvenor Leasing has done an outstanding job for Whistl in helping us reduce our vehicle emissions," said Gareth Hughes, Whistl's procurement, property and fleet director.
"Using whole life costs to demonstrate to us that plug in hybrid and electric vehicles are better value in the long-term, despite their higher purchase price, was pivotal to our decision to change our vehicle policy to alternative fuels. Their innovative thinking has helped speed up the process of us moving into electric vans and makes them a very deserved winner of our supplier of the year award in 2022."
For companies that are looking at having electric vehicles on their fleet, Lee goes on to say that this is not a time to be hesitant, and by looking at whole life costs is often the reassurance many businesses need to proceed.
"Any company that is still focused on the higher purchase price of electric cars and, as a result, is still only offering its drivers petrol or diesel cars should be questioning whether this is a good idea for both the drivers and the business - and, of course, the environment," said Lee.
"A company vehicle delivered in 2022 will remain on a fleet for three to four years, and during that time we are going to see a very dramatic shift to electric vehicles, a rise in the number of clean air zones, a strengthening of the charging infrastructure, a growing social conscience towards the planet, and a rise in the cost of operating combustion engine vehicles.
"It's for this reason that it is so important to begin the process of making the transition, and our 0Zone team can help with impartial and highly-qualified advice and support that has already helped assist many companies in making this important change."