Businesses should plug in to electric fleet opportunity

Any electric vehicle (EV) fans who tuned into BBC Breakfast this morning were likely to have been left slightly disappointed by transport secretary Justine Greening's stuttering defence of the otherwise admirable new grant scheme for electric vans.

There are undoubtedly legitimate questions to ask about plans to provide grants worth up to £8,000 to those who purchase electric vans, but Greening's unconvincingly vague talk of cost savings and market development allowed presenter Richard Westcott to assert unchallenged that the technology was unproven and imply that the low take up of the wider electric car grants demonstrated that the scheme was failing.

So given the lack of ministerial gumption, here's why any business running a fleet should be looking very seriously at the government's electric vehicle support programmes.

First off, the £5,000 discount for cars and the £8,000 discount for vans should interest all finance departments, especially when more than half of all new cars in the UK are bought by fleets. In many cases, the grant makes electric vans competitive with standard vehicles on up-front costs alone, meaning that the low running costs will make a real difference financially.

Cutting down petrol bills is an obvious saving: a report published today by the Climate Group says it can cost a quarter of the price to refuel an EV compared to a conventional vehicle at today's prices. The report also finds fuel accounts for one third of the operating costs of the UK's top 200 fleets in the UK and, on average, each company is spending £6m per year on fuel.

Yes, diesel and petrol cars are going to get even more efficient, but this will only partially offset spiralling oil prices and moving to electricity is far more likely to insulate businesses from rising fuel costs.

And in terms of other financial considerations, electric vans are free from road tax, congestion charging in London and company car tax, while those with emissions of 75g CO2/km, which is the eligibility cut-off point for the grants, pay just five per cent. Your finance team will also be pleased to learn EVs mean no national insurance contributions or Fuel Benefit Tax. When used for the right tasks, electric cars and vans are now cheaper overall than their conventional competitors.

The finance team's smiles should get even wider given the branding opportunities offered by a fleet of quiet, pollution-free vehicles. And I haven't even mentioned EVs typically require less maintenance than conventional cars and vans on the grounds they have fewer moving parts.

It's also important to stress to any wavering fleet managers that the technology works. To qualify for the grant a van has to be able to travel at least 60 miles between charges and be able to reach speeds above 50mph. Considering most journeys – at least in urban areas – are well within this range, all companies have to do is fit a charge point at the depot and recharge the vans overnight. In addition, vans, and to some extent corporate cars, tend to follow pretty predictable routes and usage patterns, removing the range anxiety that has otherwise hampered adoption of the technology.

Charging infrastructure is also rapidly expanding: Source London plans to up the capital's number of points from 274 currently to 1,300 by the end of next year, while the POLAR scheme, backed by a £10m investment from Chargemaster, aims to have 4,000 installed over the next 12 months, 20 per cent of which will feature rapid recharging.

In short, what Greening was trying to say was that EVs make business sense. And the hope is that if businesses switch on to this potential, the public will follow and accelerate the rather slow take-up of EVs to date. In fact, the scheme looks like a very smart green move by from government – something we haven't been able to say often enough.