Electric cars in the fleet – when is it worth making the switch?

Electromobility is a social trend, politically intended and accepted by the automotive industry as the future standard. And legally everything seems to be clear as well. So does the company fleet now have to be electrified?

There are many powerful electric cars, but e-mobility is not always the best alternative for every requirement profile.
From 2035, only zero-emission passenger cars and light commercial vehicles may be newly registered in the EU. That´s still a few years away. But when exactly is the best time for company fleets to switch to e-mobility? We spoke to the managing partner of CORALIX Fleet Solutions, the graduate economist Thomas Mitsch.

Mr. Mitsch, how is the topic of electric mobility being discussed in the vehicle fleets?

Thomas Mitsch, managing partner of CORALIX Fleet Solutions GmbH
There is great interest in e-mobility - further driven by managing directors who want to convey a modern image of themselves and the company and by employees who want to get into e-mobility with a company car at a reasonable price.

Especially in medium-sized companies, where fleet management is done on the side, there is still a pronounced half-knowledge of how practicable e-vehicles really are in individual cases though. I've heard of companies that have ordered electric cars but have not bothered about charging options. At other companies, the electric car is parked right at the front of the parking lot for everyone to see, but the employees prefer to drive with diesel. These are two extreme examples, but of course it shouldn't work that way. That doesn't help anyone.

So electromobility isn't a sensible option for every company then?

There are now fantastic electric cars, but we are still in a relatively early phase of the mobility change. Anyone who switches now has to proceed in a planned manner because the vehicle technology and the necessary infrastructure have not yet reached the level of maturity that is the case after more than 100 years with the internal combustion engine. This is completely normal. And that also means that there is not yet an adequate electric vehicle for every requirement profile.

Indeed, electromobility may never be an ideal solution for some sectors. I think of the heavy traffic. In this area, many mobility experts tend to see hydrogen as a solution for the future.

Back to electric cars with batteries. Now, who are they for?

Whether a company can at least partially switch to electric vehicles depends on many factors. First of all, the charging infrastructure should be clarified. In order to ensure the operational readiness of the fleet, you need sufficient charging points at the company and, if the vehicles are provided for private use, possibly also at the employees' homes.

For some requirement profiles, however, it is not enough to regularly charge overnight with the currently available ranges. Then it has to be recharged during the day on the go. To check whether that is a feasible option, fleet managers have to look at the daily routes. Are there enough public fast chargers in the region? Do the employees drive the same routes over and over again so that loading routines can be established? A nursing service in Munich, for example, is more predestined for the electrification of the vehicle fleet than the company with field service in a rural region.

Electromobility already is a real alternative for those who only get a company car as a motivation factor to get to work, if they can install a charging station at their homes. These people only drive between 10 and 20 thousand kilometers a year. Purely in terms of driving performance, every third fleet vehicle in Germany could already be an electric car.

State subsidies for buying electric fleet vehicles will expire in September 2023. Is it important now to be as quick as possible?

Fleet managers who are now going into procurement for electric vehicles have to take a very close look. Many vehicles have a delivery time of more than a year - and are therefore no longer delivered in time to benefit from the subsidy. After all, it is not the date of the order that is decisive for the approval of the funding, but the date of registration.

Unfortunately, this information is not yet transparent in all leasing offers. The small print then hides the hint that the rates will be adjusted if the subsidy cannot be deducted. So always make a conservative assumption when doing your calculations – or ask the retailer to give you a guarantee. Some manufacturers have already announced that they will take the risk and pay for the subsidy out of their own pockets for a transitional period.

On the one hand, it is annoying that state subsidies will expire in 2023. On the other hand, the debate is becoming more objective - instead of the discount, more is being said about performance and practicability. And the car industry is also getting a new impetus: With the end of the subsidy, the pressure increases to also find technological solutions for how e-cars can be manufactured more cheaply in the future. We can expect some innovations there.

What advice would you give to the fleet managers?

Electromobility is trendy, which makes it easy to get carried away. But the fleet manager is always well advised to weigh everything carefully. As I said, this applies to the charging infrastructure, usage profiles, but of course also the comparison of the total costs of ownership, image issues and the opinions of users.

Be aware that by no means everyone is already convinced of electric vehicles. Even if, viewed soberly, there are many arguments in favor of a switch: for many professional groups, the vehicle is not just a commodity, but a workplace. It's about functionality, but also about convenience and, last but not least, trust. There's no point in reckoning without the landlord. So get an idea of ​​the vehicle market, the necessary infrastructure and talk to the employees. For some companies it is simply worth waiting two more years before going electric.

The most important tips for starting the electrification of fleets in brief:

  • Clarify whether the available electric vehicles with their payload, their range and the charging times represent a practicable alternative to the combustion engine. Otherwise it's worth the wait.
  • Check whether sufficient charging infrastructure can be created at the company location and, if necessary, at the drivers' homes.
  • Research whether there are enough public quick charging points on the typical driving routes.
  • Also talk about the acceptance of electric vehicles in the company. Eliminate misconceptions and prejudices.
  • Always base your cost comparison on variants without subsidies.
  • Ask dealers whether they guarantee the prices and whether they can use their own resources to compensate for a lack of government funding.
  • Let us advise you and work together with powerful partners.

About CORALIX Fleet Solutions

CORALIX Fleet Solutions is the quality provider for fleet and damage management for motor vehicle fleets. CORALIX accompanies fleet managers from the needs analysis to the fleet conception, implementation and day-to-day business - of course also in the age of e-mobility. Customers choose for themselves how much support they need, whether they just want advice or want to outsource the care of vehicles and drivers on a permanent basis. Learn more about the services of CORALIX at https://www.coralix.de/index.php/dienstleistungen

09/19/2022