From understanding vehicle use and calculating total cost of ownership, to planning charging infrastructure and running trials, we look at how to develop an evidence-based EV strategy to ensure a smooth transition without taking unnecessary risk
While the Department for Transport has launched a review of the zero emission vehicle (ZEV) mandate, with the potential to introduce softer annual electric car and van sales targets for manufacturers, it stresses that the 2030 phase-out of new petrol and diesel cars and 2035 zero-emission target will remain unchanged. Fleets therefore still need to plan for electrification.
Key to success is having a strong electrification business case, which needs support from the top. So where do you start? And what key considerations will make the plan a success without taking unnecessary risks?
A strong EV strategy should start with the operation rather than the vehicle. Fleet operators should first understand how their vehicles are used by using telematics data to get a clear picture of vehicle movements, mileage, journey times, idle time and driver behaviour. That data can reveal which vehicles are natural candidates for electrification, or the “low hanging fruit”.
A vehicle that regularly returns to base, covers a predictable daily mileage and spends several hours parked overnight may be an obvious candidate. But a vehicle that travels long distances at short notice or has limited opportunities to charge may be much harder to electrify and could be better left for a later replacement cycle.
Once the fleet has identified which vehicles
and duty cycles are suitable for electrification, the next step is to look at what is actually available on the market. Operators should compare the electric vans, cars, trucks and specialist vehicles currently available against their operational requirements, including range, payload, body configuration and charging capability.
Consider how the vehicles will be funded
The way an EV is financed is important, especially as the upfront cost is often more expensive than an ICE vehicle.
Leasing can spread the cost of vehicle acquisition over an agreed period and can provide greater predictability around monthly fleet expenditure. It may also allow operators to avoid taking the full residual-value risk, which can be particularly relevant while the used EV market continues to develop.
Depending on the contract, maintenance and other services can also be incorporated into a single monthly payment.
Rental can provide another useful route, particularly for operators who want to trial electrification without making a long-term commitment. Rental can be used to test an electric vehicle on a particular route or within a particular depot before committing to a full replacement cycle. It can also provide flexibility for seasonal operations or where vehicle requirements are changing.
Contract hire, finance arrangements and outright purchase each have different implications for cash flow, balance-sheet treatment, risk and residual values. The right choice will depend on the operator’s circumstances, so the business case should compare the whole-life cost of each funding model rather than focusing solely on the monthly payment or initial capital requirement.
Make sure you look at any government help too. The UK government’s Electric Car Grant (ECG) provides a direct discount of up to £3,750 on new, fully electric cars priced at or under £37,000. Meanwhile, the Plug-in Van Grant (PiVG) gives businesses up to £2,500 off small electric vans (under 2.5 tonnes) and up to £5,000 off large electric vans (2.5 to 4.25 tonnes).
Make TCO the centre of the argument
The business case should then move from vehicle price to total cost of ownership. An EV can have a higher purchase or lease cost than its combustion-engine equivalent, but that is only one part of the calculation.
Energy costs, servicing, maintenance, tyres, taxation, financing, residual values, insurance and downtime all need to be considered. Operators should also calculate the cost of charging, including electricity tariffs, connection costs, hardware, software and infrastructure.
Given the fuel-price volatility caused by conflict in the Middle East, savings on fuel cost can be an important part of the argument.
Any discounts or exemptions for clean Clean Air Zones should be included in the calculation where relevant.
It is also worth modelling different energy-price scenarios. An EV business case that works only at one favourable electricity price is unlikely to convince a finance director. Showing how the numbers change under conservative, expected and optimistic assumptions makes the proposal much more credible.
Also note that routine service, tyres, and general wear and-tear is typically lower for EVs than ICE vehicles due to fewer moving parts.
Charging considerations
Charging infrastructure can sometimes appear to be the biggest obstacle to electrification. Installing depot or workplace charging can be costly and complex, especially if a site does not have enough electricity supply.
Understanding how many vehicles need to be charged, when they return, how much energy they require, and they be ready to leave again can also help determine whether a depot needs rapid charging or whether lower-powered overnight charging will do the job.
Operators should consider the available electrical capacity, the cost and timescale of any network connection, and how the site might need to expand as more vehicles become electric.
If vehicles return at different times, smart charging can potentially spread demand across the available charging capacity rather than having every vehicle draw maximum power simultaneously.
Support from the government’s Workplace Charging Scheme, which has been extended to March 2027, should be investigated. The maximum grant is £500 per socket, subject to eligibility.
Home charging is the cheapest option, especially with EV-specific tariffs, but would require drivers to have a charger installed and reimbursement processes put in place. This, of course, is not always possible if the employee doesn’t have a driveway.
Charging on the public charging network is the most costly option. For those that will be reliant on it, it is worth examining whether a charge card could be beneficial, as they often offer discounted rates, as well as simplified billing.
Trial before committing
A pilot can turn a theoretical business case into evidence. A trial can measure energy consumption, charging behaviour, downtime, maintenance, driver feedback, payload impacts and any changes to route planning. The experience of drivers and depot teams is particularly important because they will identify practical issues that may not appear in a spreadsheet.
A successful trial can then provide the confidence to scale. If problems emerge, the fleet has learned about them while the exposure is limited.
Carbon savings
Environmental performance is an increasingly important part of fleet decision-making.
For businesses with formal ESG strategies, fleet electrification can contribute to emissions-reduction targets while also addressing local air quality issues. It can demonstrate tangible progress to customers, employees, investors and procurement teams increasingly interested in supply-chain sustainability.
A fleet operator can predict carbon savings by comparing the tailpipe emissions of current fossil fuel vehicles against the emissions of electric vehicles, factoring in total expected mileage, local electricity grid carbon intensity, the vehicle lifecycle and vehicle efficiency ratings.
Learn from fleets that have already made the move
Perhaps the most valuable research an operator can undertake is to speak to another fleet.
The market is now mature enough for businesses to learn from organisations that have already encountered the practical challenges of EV adoption. Fleet managers can provide insights into vehicle selection, charger reliability, driver training, energy tariffs, depot layouts and unexpected costs that may not appear in supplier presentations.
The most useful comparisons will be with fleets that have similar operating patterns. A city delivery fleet, a mobile engineering operation and a long-distance haulage fleet may all have very different electrification opportunities.
Finding similar fleets that have demonstrated cost per miles savings can be a strong factor in any business case.
The right decisions
Ultimately, a strong EV business case will make the argument for making the right decisions vehicle by vehicle and site by site.
Telematics can identify the operationally suitable vehicles. TCO analysis can establish whether they make financial sense. Charging analysis can determine what infrastructure is actually required. Trials can test the assumptions in the real world, while Clean Air Zones, ESG objectives and customer expectations can add further strategic value.
