Spotlight on... Electrifying your fleet

Across our customer base, we see the varying stages of a business’s journey to electrifying their fleet. A few are already 100% electric, some are just beginning to trial electric vehicles (EVs), while others are still at the planning stage. However, with the government’s 2030 end to the sale of new petrol and diesel vehicles getting closer every day, it’s a journey that every business is going to have to go on at some point.

In this month’s newsletter, we speak to two fleet managers who are further down the road than many others in their industry. At Eric Wright, the business is in the process of moving all its car drivers to EVs, while Speedy is tackling the transition of its vans to electric.

Getting it Wright

Steve Openshaw is group fleet manager at Eric Wright Group, one of North West’s leading property and construction companies, and wholly owned by the Eric Wright Charitable Trust. He recognised a long time ago that the future of vehicle power was electric.

Eric Wright’s fleet currently consists of 155 EVs, 42 hybrids and 36 internal combustion engine (ICE) vehicles, which are used as company cars by employees across the business.

To achieve his all-electric vision, Steve set to work developing a 10-year rolling programme to map out where the company needs to be in terms of electrification, and how he is going to get it there. We caught up with Steve to hear more about Eric Wright’s journey, including its policy changes, the process of selecting the right vehicles, overcoming teething problems and what business fleets will look like in the future.

Making the case

Looking back to the beginning of his plans to overhaul the company car scheme at Eric Wright, Steve remembers: “With post-pandemic supply restrictions, discounts disappearing and material and production costs, we found that EVs were more expensive to buy.”

There was also some doubt still that battery power was really the future, but Steve pushed on. “The benefits of battery power outweigh the doubts, and it will be the future in one form or another. There’s likely to be an evolution in how you get that power, with developments in hydrogen fuel cells for instance, but ultimately electric driving is where we’re heading.

“We took all ICE vehicles off the choices list back in 2020 and reduced it to a mix of hybrid plug in, hybrid or fully electric”. Without the option to choose a new ICE vehicle, Steve expects “it won’t be long until the balance in the scale of production tips, unit costs come down and we’re able to offer an even wider selection. It’s then that we’re likely to see the final transition to an entirely electric fleet on the roads.”

To prove to senior leadership that the benefits were worth the extra cost, Steve assessed the whole life cost of EVs and the environmental benefits they would deliver, making sure the vehicles would also eventually be cost-effective. The EVs had to fit the business’s current whole life cost budgets.

“We looked at cars for each of our eight grades, from entry level to director, and considered them against our budget across a 12-month period.”

In the past year, inflationary pressures have driven up the cost of everything, including vehicle leasing. Like all businesses, this meant that the choice of vehicles Eric Wright was able to offer staff within its current budget had reduced significantly.

But Steve saw the challenge as an opportunity to create positive change. “We streamlined our approach to offer a fixed choice list of vehicles, with appropriate EV models decided for staff across each of our eight grades. This enabled us to provide staff with desirable, low emissions vehicles, without creating an unsustainable cost burden.”

He continues, “The whole life costs of EVs are lower than ICE vehicles, despite the initial unit cost, demonstrating the long-term benefits of implementing EVs. Once we could prove this, it was about incorporating that whole life model to calculate the value of vehicle we want to offer at each level”. This meant finding options for desirable cars, that staff were genuinely interested in driving.

Leading the change

With the sale of new ICE vehicles set to be ended by the government from 2030, a key aspect of the new company car policy at Eric Wright was moving away from its original free choice list for employees, whereby staff could choose any car on the market, towards a fixed list comprised entirely of EVs and hybrid vehicles.

Steve believes that looking at this through a 10-year lens allowed him “to avoid the usual ‘knee-jerk’ reaction that fleets may fall into, especially those without dedicated specialists”.

He notes: “It’s so important to keep a mindful eye on regulatory changes and recognise that the goalposts are the same – net zero – but we might have to use different tactics to get there. Fleet professionals should stay on their toes and be able to adapt and even change their way of thinking as new ideas present themselves.”

Steve already knew which vehicles he wanted to introduce and worked with Lex Autolease to pull together the costs he needed to inform his proposal. After an extensive consultation process with the senior leadership team, the business unanimously agreed to a whole life cost model, and Steve’s proposals for transitioning to electric vehicles (EVs).

Looking back on the process, he remembers, “There’s so much information out there that it can be overwhelming, so you need to have trusted sources like a leasing company that can help you work towards a clear vision. Tapping into the right expertise gives you the figures you need to prove that your approach is tried and tested.”

He notes that Lex Autolease share a report with Eric Wright every three months. “This helps us put concrete figures behind our journey to net zero, allowing us to compare with our peers in the sector and track exactly how well we’re doing towards our goals”.

Relieving cost and range anxieties

To practice what he preaches, Steve has been driving an EV for 11 years, “I can’t exactly shout about the benefits if I don’t know myself that it works, can I?” he laughs.

“I knew that from a business perspective, people were already on board with the introduction of EVs. Teething problems only appear on the personal side in terms of anxieties around added costs, practicalities of charging and the range of the vehicles.” But, to make sure staff are aware of the implications, Steve’s team then sit down with each employee for a one-to-one discussion.

Armed with in depth knowledge of charging infrastructure, Steve’s own experience of driving electric and independent analysis from Lex Autolease, the team was confident it could get drivers on board. “We send out a question list to every member of staff to check that we have what they need. For instance, if they charge at home, or if not, where they would look to charge, as well as their daily journeys and the maximum distance that they would travel.”

Steve adds: “A particularly attractive benefit for staff is that Benefit in Kind (BiK) rates for lower-emission vehicles are currently at 2%, which is fixed until April 2025, so this is a huge draw for them financially”.

“It’s all about taking a step back and looking at what range you need in reality. You might be doing 300 miles a day and it would still be doable in an EV, so it’s about having those conversations with drivers and changing perceptions.”

Beyond a company car

It’s now that Steve reminds us to look at the plan in a holistic way. “You’ve got to think further than journeys to and from work, it’s also about how members of staff will use their cars outside of work, and making sure the options on offer still suit.”

The team at Eric Wright has noticed more and more people are happy to make the shift to electric once they have all the right information. “It’s now a slick programme, and volume is coming back, manufacturers are bringing back discounts, so the choices we made are proving to be right. Nobody wants a diesel car anymore.”

Steve forecasts: “In the next 12 months, even the legacy ICE vehicles in our fleet will be out. It’s fantastic to see people who are currently driving ICE models keen to learn more about transitioning and are open to the idea of EVs. That’s why the one-to-one meetings are so crucial to our strategy, it gives employees full confidence that making the change will benefit their pockets as well as the planet.”

Not only for Eric Wright but across the general property and construction industry, filling vacancies is a key priority, with the government recently relaxing immigration rules for the sector to help plug skills gaps1. So, Steve wanted to provide benefits for future employees, too. “We’ve got to make this accessible for people that want to come and work for us, the option of a company car has always been a draw for potential candidates, and now electric vehicles are part of that tick list. Eventually, all fleets will be electric, but we intend to get there first.”

Focused on fleet

To enable Steve to develop his 10-year plan, Eric Wright established a dedicated role for him to focus entirely on the firm’s fleet.

“The firm saw the value and influence of having someone concentrated entirely on fleet operations, which used to be only part of my job,” Steve explains. “Allowing me to focus solely on this, has huge potential, not only in terms of our net zero strategy, but also allows me to manage the risk and additional costs that come with the move, making sure it is the right way to go in terms of climate change, the business and our drivers”.

It has also allowed Steve to take on a fleet administrator apprentice. He jokes “we’re not getting any younger, so we need to train people up”. 

He believes real benefit comes from bringing in fleet-specific trainees. “They’ll not only have the skills needed for the job, but also understand the ins-and-outs of the organisation, as well as the legal and logistics background that will support them in their development to fleet manager.”

Steve believes succession planning, alongside a clear roadmap and a focus on bringing the company’s drivers along on the journey, is how Eric Wright will continue progressing along the road to electrification.

Speeding ahead on electric vans

For many businesses which have a variety of different transport needs, cars are just one part of the fleet electrification puzzle.

National tool and equipment hire provider Speedy has a fleet of 1,340 vehicles, of which 775 are light commercial vehicles (LCVs), used by its engineers and delivery drivers across the country.

Speedy has been an early adopter of eLCVs, outpacing many others in the sector on the journey. By early next year, almost a third of its LCVs will be electric, and the business has plans to add a number of EVs each year, to align with its ‘Decade to Deliver’ strategy. We spoke to Speedy’s Fleet Director, Aaron Powell, to find out about his experience so far, and how he’s working to deliver on the business’s sustainability ambitions. 

Setting the strategy

Like Eric Wright, Speedy’s push for electric vehicles (EVs) has been driven by the business’s sustainability strategy. Its ESG director, who sits on the executive board, introduced ‘The Decade to Deliver’, which sets out a path for Speedy to become carbon neutral within the decade.

“We started with the cars, because this was where the technology was most advanced,” Aaron explains. “We changed our company car list to only offer hybrid and electric cars, and by the end of next year colleagues will only be allowed to choose an EV.”

Since then, Speedy has moved with the pace of technological development, trialling its first eLCV in 2020 when they became available, and expanding its fleet more rapidly following the introduction of the E-Transit.

“The HGVs are behind, purely because of range,” says Aaron. However, Speedy has ordered six electric HGVs to trial this year and is keen to be leading the way as technology develops.

Speedy is unusual in its dedicated supply arrangement with Ford, something which Aaron says has delivered numerous benefits.

“You have a better grip on your data by using the same manufacturer,” says Aaron. “If you have one driver that’s getting 120 miles and another 50 in the same vehicle type, you know the only variable is how well they’re driving.”

Aaron has also found that working solely with Ford has provided opportunities for collaboration when developing vehicles. “We’re working with them on telematics, to identify vehicles before they break down. For our engineers, we wanted to have a three-pin plug in the cab so they can charge tools, but we didn’t want it to impact on range. So, they put solar panels on the roof, which assists the 12V battery to operate the ancillary equipment.”

It also makes maintenance more efficient, as Ford can fix multiple vans in a single visit, and drivers have a single number to call if they have an issue.

Counting the costs

Speedy’s transition to electric hasn’t come without its challenges though. Aaron has found that eLCVs can be double the price of their ICE counterpart.

“To help negate the cost, we took the electric vans over a five year period, rather than the three we usually take diesel for, to reduce our monthly payments,” advises Aaron.

He’s also seen benefits in terms of whole life cost. “We’re doing well on fuel reduction because of the switch, and if we can use our own chargers at site, we get a really good rate on charging overnight.”

He continues: “Lots more towns are becoming congestion zones,” creating another saving for choosing an eLCV, which are exempt from the charges.

However, Aaron says that because the sustainability strategy is being driven from the top, there’s a willingness to invest for a better future.

Charging challenges

Aaron still believes the biggest hurdle that’s preventing EV adoption is charging. “Everyone says they have range anxiety, but I think it’s charger anxiety,” he argues. “It’s finding a charge point that’s working, or if there’s a queue you’ve got to wait, and then worrying if there’s going to be enough chargers at the depot.”

Under ‘A Decade to Deliver’, Speedy’s plan is to create bespoke low carbon sites, such as its Innovation Centre in Milton Keynes, which has 670 solar panels to power charge points. However, while this process is still underway, the business has struggled to install chargers at some of its rented locations.

“Our Southwark depot is under the arches where the train goes overhead, so we can’t install charge points due to government restrictions,” says Aaron.

As the business is growing rapidly, Speedy doesn’t expect to be in some of its rented locations long enough to realise the return on investment of installing chargers. The turnover of staff in the industry has also presented a similar problem with paying for chargers to be fitted at employees’ homes.

But Aaron has a solution: “We’ve given drivers what we call a ‘juice booster’ cable, which allows them to charge from a three-phase or three-pin connection if they’re on site or at a depot. For when they’re on the road, we’ve given them an Allstar card, which allows them to access charge points across the country.”

Speedy also has the advantage that the team doesn’t tend to work nights or weekends, so vehicles can be charged during downtime.

Going the distance

To manage charging concerns, Speedy has been strategic in its introduction of eLCVs.

“We used 12 months of telematics data to identify the vehicles that never did more than 150 miles on any given day and transitioned these first,” explains Aaron. “Any driver who does a few journeys of 200 miles a day each year will be at the end,” allowing time for battery technology to catch up with these drivers’ needs. 

Likewise, it identified drivers who mainly covered central London and other city centres as prime for an eLCV.

Finally, Speedy is introducing specialist routing software to optimise mileage. Aaron explains: “At the moment, a delivery driver might decide to go to a certain location first as they know they can get a sandwich there. Our new software will tell them which way to do deliveries, and how much mileage this has saved them.”

However, the biggest challenge Speedy has faced on its journey is opposition from drivers. Aaron laments: “People haven’t wanted to go electric as they think they can’t just pull into a fuel station, fill up and away they go.”

But he believes that educating drivers is the solution. He advises: “Just get some demo vehicles, get your drivers in them and show them. Teaching drivers how to get the best out of their vehicle and the best range will make them better drivers.”

Aaron believes that the most vocal opponents of electric can end up being the biggest cheerleaders. “Give it to the ones who moan the most and get them to have a go. It’s just like driving an ICE vehicle – the vans have heated seats, air conditioning, a Satnav. And in the end, they’re the ones which come back and say: ‘I love it, it’s great!’”

Once someone is converted, Aaron is keen to turn them into an advocate. Speedy recently participated in the Lex Autolease-sponsored EV Rally 2023, which sees teams cover more than 1,200 miles across over five days to visit all capital cities of the UK and Ireland. They test the capabilities of EVs and public charging infrastructure.

“We got two of our drivers from Yorkshire and Scotland involved in the rally and both of them now can’t wait to get an EV!”

Looking to the future

Aaron believes electric is the future and is committed to seeing his fleet reach net zero. However, it’s not just a matter of doing the right thing.

“The next phase of our sustainability plan is stopping dealing with partners who don’t have any ESG plan that runs concurrently with ours,” emphasises Aaron. And this is a trend he’s seeing across the industry.

“Some of our customers, such as the likes of HS2 and big construction companies are starting to say they only want electric cars on site, and they only want EVs delivering to their site.”

The fleet transition aligns with wider plans to introduce electric tools and machinery, develop greener depots and offices, and install more electric chargers at its sites. They want to ensure the business is fit for future and remains a preferential supplier to its customers.

Aaron also says the industry feels the government’s net zero targets looming large.

“We’ve got to do it, and you don’t want to be there in 2040 thinking, ‘I’ve got to change thousands of vehicles, and how am I going to fund it all?’ The way we’ve planned our renewals will get us there way before 2040,” Aaron explains.

He highlights: “Responsible companies want to get there quicker than the government has mandated.”

Speedy and Eric Wright are both great examples of businesses that are leading the way in their sectors, with ambitious targets and a clear vision of how to get there.