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Future Mobility

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Current trends: the pros and cons of e-van investment

Decarbonising a vehicle fleet may suit a business’s green agenda, but the decision to ditch diesel and put paid to petrol is far from straightforward.

Last updated: 04 May 2021 6 min read

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A business will typically replace its fleet of vans every five to eight years, meaning there is one more full replacement cycle before the UK’s ban on the sale of diesel and petrol vans from 2030. Electrifying van fleets now, rather than in later years, makes sense environmentally and financially, however many doubts businesses may have. Here are some points to bear in mind.

1. Electrifying van fleets now is the green move

The transport industry is the biggest emitter of greenhouse gases in the UK, and individuals and businesses must decarbonise their travel if we are to achieve net-zero carbon. With vans most frequently used by businesses facing few alternatives, electrification or an alternative fuel is the way to go green.

Of the 113m tonnes of CO2 emissions from UK surface transport in 2019, fossil-fuelled vans contributed 20m tonnes. Electric vans (e-vans) produce no CO2 or NOx tailpipe emissions, and so their uptake would improve air quality and support the UK’s commitment to become a net-zero economy by 2050.

Businesses should not underestimate the individual impact of electrifying their van fleets, especially when factoring in the weight and distance travelled. In 2019, average CO2 emissions of new vans registered in the EU, Iceland, Norway and the UK was 158g/km of CO2, whereas new passenger cars emitted 122g, according to research from the European Environment Agency; the annual mileage of vans in Great Britain is roughly 13,000 miles, and for a car 7,400 miles. Put together, fossil-fuelled vans are nearly 2.2 times as polluting as the average car.

2. Van buyers can financially benefit by opting for electric

E-vans are costlier than their diesel equivalents, but financial incentives and daily savings mean the total cost of ownership (TCO) of e-vans – especially for higher mileage use cases – is competitive with the diesel/petrol alternatives, and continues to improve. In 2019, the 100% electric Renault Kangoo ZE undercut the TCO of its diesel alternative by around £3,000. There are also fewer moving parts in an e-van, meaning lower servicing costs.

Government grants and incentives also help with some of the upfront costs of investing in electric. These include:

  • The plug-in grant, including £582m extra funding, lasting until the 2022/23 tax year.
  • Grants for installing charging infrastructure, including the Workplace Charging Scheme and the Electric Vehicle Homecharge Scheme.
  • Zero rating of the road fund licence and benefit-in-kind (BIK) tax for fully electric vans, as well as exemption from the London Congestion Charge through the Cleaner Vehicle Discount beyond October 2021, and the London Ultra Low Emission Zone.
  • Subsidised or free parking and charging in some areas.

Apart from incentives that save the bottom line, electric vans can help boost the top line as well. It’s important to note that consumers appreciate brands that care about sustainability. Championing a climate agenda through investment into electric vehicles (EVs) will open up revenue opportunities among the environmentally conscious.

3. However, not all businesses can find suitable e-vans and chargers

Businesses investing in e-vans must consider the installation of charging points. For those with drivers that return the van to a workplace, this means considering dwell time, state of charge requirements, warranty requirements and site electricity capacity. Specialists can help.

The situation is more complicated when drivers keep the van at their home. Ensuring each driver has access to a home charging point may not be possible, and high driver turnover will make installation of new charging points too costly. Thankfully, finding a charging point for e-vans along a journey is getting easier as the number of charge points increase – particularly rapid chargers. There are now more public charging points than petrol stations in the UK.

The limitation of mid-journey charging is that it takes significantly longer than refuelling. For instance, it takes 40 – 60 minutes to charge up Nissan’s 100% electric e-NV200 from 20% to 80%, if using a DC rapid charger. This means businesses must consider route planning, as well as base range versus their daily journey mileage.

Driving range

The driving range of e-vans has greatly increased since they first came on to the market and a growing number of models exceed 100 miles. For fleets with greater range requirements, businesses can take heart in worldwide research on EV batteries, geared to extending the driving range of e-vans over the next few years.

For now, different battery sizes are available. For example, the Vauxhall Vivaro-e’s 50 kilowatt hour (kWh) battery has a driving range of 143 miles, while its 75kWh battery increases range to 205 miles; the latter costs more but needs fewer recharges.

Payload

Van buyers must also account for the payload of a battery choice. To use the Vauxhall Vivaro-e example again, with a 50kWh battery it has a payload of 1,226kg, and with a 75kWh battery it has a reduced payload of 1,002kg. With a lighter engine, its diesel equivalent offers 1,458kg.

Nevertheless, load space can remain the same, with battery packs generally placed under the van’s load area floor.

Van fleet electrification is possible for many businesses, through measured choices. Businesses that take pre-determined journeys with a consistent route and return-to-base have vehicles among the easiest to electrify, as mobile applications can identify the e-van that best facilitates their range, payload and charging point needs. However, the driving range and payload of e-vans and the ease of installing and using charge points must improve if a greater number of businesses are to transition.

4. Limited availability of electric and hybrid vans

Those that identify a suitable e-van face the challenge of limited availability. Of vans manufactured in the EU in 2020, 2% were electric, 0.9% were hybrids, 3.4% were petrol and a whopping 92.4% were diesel, according to the ACEA (European Automobile Manfacturers’ Assocation). Large fleets can’t help but sweep up big parts of the production, creating a barrier for small- to medium-sized businesses to electrify. In effect, there is unmet demand for e-vans.

Fortunately, supply is predicted to rise. LMC Automotive forecasts in Europe a seven-fold increase in launches of e-vans and electric pick-up trucks by 2025, based on 2018 numbers. But for electric, hybrid and alternative fuel vans to replace the 95.8% market share of diesel and petrol, the e-van manufacturing industry needs significant investment.

To recap, businesses should actively consider electric now. The reduced impact on the environment and the financial benefits of electrifying van fleets makes it the logical move for businesses with needs that can be met by current supply. Even businesses that fail to find a suitable option should note that the capabilities of vans, choice of models and charging infrastructure are improving.

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Future Mobility