Understanding the total cost of electric vehicle fleets

14th May 2021

3 white electric cars in a row, each connected to a charging point

A common myth surrounding electric vehicle fleets is that they will cost your business more than fossil fuel burning vehicles. This is the main reason why 50% of fleet managers are cautious about making the switch.

However, when we break down the cost of electric vehicle fleets, it becomes clear that this caution is not completely justified.

The on-the-road price of electric vehicles

The on-the-road price refers to not only the list price, but the cost of other factors such as fuel, insurance and road tax. It’s the cost of buying the vehicle and being able to legally drive it.

Whilst it’s true that the initial cost of purchasing an electric vehicle is going to be steeper than buying a new diesel vehicle, this shouldn’t put fleet managers off. Once you’re managing electric vehicle fleets, you’ll realise the extra cost was worth it in the long run.

Let’s look at the Citroen C4 as an example.

The diesel version has an on-the-road price of £26,040.

This vehicle’s electric counterpart, the e-C4, has an on the road price of £29,680.

This initial extra cost of over £3,000 per vehicle is what makes fleet managers shake their heads. After all, when purchasing multiple of these electric vehicles, the extra cost of constructing your fleet could seriously add up.

The total cost ownership of electric vehicle fleets

However, once you’ve got your electric vehicles on the road, you’re going to start saving. Let’s look at the Citroen C4 example again.

Assuming the cost of diesel is 126.5p per litre (an average UK Price in March 2021), it would cost £2.85 each day for a 25 mile journey. Over a year, this journey would cost £1,040.

The cost of doing the same daily journey in the electric C4 is proof that cost of running electric vehicles is not something fleet managers should be worried about. The daily cost of the 25 mile journey would be £1.10. Over the year, that journey would cost £402.

That’s a saving of £638 per year, just by using electric instead of diesel.

Since electric vehicles do not emit harmful CO2, they are exempt from road tax. This small saving will also add up over time.

The more mileage your electric vehicles do, the more extreme the savings can be. Having 3 Citroen e-C4s in your fleet doing 50 miles a day for 3 years will completely negate the extra cost of the initial purchase of these vehicles, just from savings on fuel costs.

Of course, the costs will vary depending on which vehicles you use, but the e-C4 is a perfect example of the types of savings you could be benefitting from.

Government grants making EV purchasing easier

Row of white Tesla electric cars charging at a station

The UK government also offers a grant to assist in the purchase of low emissions vehicles.

This is part of the government’s 10-point plan for a “green industrial revolution”, which includes the 2030 ban on the production and sale of new petrol and diesel vehicles.

The percentage of the grant offered depends on the vehicle. For cars, the grant will pay for 35% of the overall price up to a maximum of £2,500.  The car must cost less than £35,000 for it to be eligible.

For large vans, the grant will pay for 35% of the overall price up to a maximum of £6,000.

It’s unlikely the government will offer these grants forever, so it might be worth considering making the transition to EVs now whilst they are still available.

How else can I save money with electric vehicles?

If you are running fleets of electric vehicles, you should be using a fuel card to optimise the benefits. With the right card, you could see cheaper charging costs and more convenience in terms of where you can charge your vehicles. Many fuel cards offer competitive prices on both electric and fuel, meaning you can slowly make the transition to keep up with the industry-wide switch to low emission vehicles.

To find out more about how a fuel card can help you, get in touch with our expert team. They’ll find the best option for your fleet.