Analysis
14 May 21

European fleet EV demand running ahead of infrastructure

Fleet appetite for electric vehicles is outpacing the infrastructure required to charge them and the ability of suppliers to satisfy specific fleet requirements, according to executives responsible for some of Europe’s largest fleets at the 2021 Global Fleet Conference.

Go to the Global Fleet Conference website to watch the Global Fleet Live Sessions and Regional Streams on Europe on-demand

Traditional barriers to electrification have fallen away in the face of corporate sustainability goals, generous EV tax breaks and the lower total cost of ownership (TCO) of EVs, convincing fleet decision makers that the future will be battery-powered.

Across Europe, 20 countries have CO2 as a key parameter of their company car tax systems, and on average EV drivers are taxed only 63% of what Internal Combustion Engine (ICE) drivers have to pay in taxation, according to LeasePlan’s EV Readiness Index 2021.

EVs' lower TCO

Moreover, the cost of electricity per kilometre is on average just 53% of the cost of petrol or diesel required to cover the same distance.

This means that in 11 countries, certain EVs have a lower monthly TCO than their ICE equivalents, according to LeasePlan, a situation which is spurring fleets to put electrification at the heart of their plans.

Speaking at the Global Fleet Conference, Gavin Eagle, managing director of LeasePlan International, said: “The move towards electrification is undeniable and unstoppable and that has been coupled with a real strategic drive from our international customers to want to move towards net zero emissions.”

Last year about 16% of LeasePlan’s vehicle orders were electric, and the company expects the percentage to rise further this year, although the growth may not be evenly spread across countries.

Wide range in EV readiness

“We see a large disparity in EV readiness between Western Europe and Eastern Europe. For a fleet manager at an international level looking to roll out a programme in a harmonised manner, that can create challenges,” said Eagle.

Countries such as Norway and the Netherlands have a high penetration of EV sales and a dense recharging network, whereas the Czech Republic, Poland, Romania and Slovakia are lagging a long way behind, according to LeasePlan.

“The roll out of the charging infrastructure is not keeping pace with the roll out of electric vehicles, and there is a disparity in the fiscal incentives and infrastructure readiness in markets,” said Eagle. “That’s why we are calling on policy makers to assist us. We see a real desire from our clients to electrify their fleets and we are there to support them, but we also need support from a regulatory, fiscal and infrastructure perspective.”

AbbVie's EV plans

Fleet electrification is central topharmaceutical firm AbbVie’s plans for the next four years, said Wojciech Regucki, the company’s EMEA fleet manager (pictured right), who is responsible for about 5,000 of AbbVie’s 16,000-strong global fleet.

AbbVie has consolidated the number of OEMs that supply its fleet from 25 to five, with ‘EV readiness’ being one of four key selection criteria in its RFPs, supporting the company’s carbon zero sustainability goals in its Believe It, Achieve It global fleet programme.

Mondelez International: extended EV trials required

Demand for EVs is also rising sharply at Mondelez International, the group which owns brands such as Orio, Cadbury, Milka and Toblerone. Regional fleet manager David Weeks, who runs 5,000 vehicles in Europe, said: “In recent months we have seen more mainstream electric vehicles at a price point that is more suited to our company and we are seeing big demand. As soon as those vehicles are available, drivers are coming to me asking for them.”

Overall take-up is still modest – about 100 to 150 EVs – but orders are growing fast, said Weeks.

“I am a big EV advocate and you need to get drivers behind the wheel,” he said, adding that driver perceptions have not yet caught up with the capabilities of the new generation of EVs, even in advanced markets.

“I would really like to accelerate electrification more, but it’s a big programme of driver education. You can’t just give a driver an EV for a couple of hours, they need to live with it for a couple of weeks to understand that it works,” said Weeks (pictured left).

A year ago the higher cost of EVs stood in the way of widespread electrification by Mondelez, but this is no longer an issue. Today’s challenge, said Weeks, is to transition tool car drivers to EVs.

“Even if the TCO works, if you can’t charge your car beyond your home it doesn’t work for the driver,” he said. “It’s really difficult to move the tool cars [to electric]; how do you get people to understand that 500km trips are possible? And that is a challenge, because when we have trialled it, it doesn’t work - chargers are down, too many [charge point network] cards are needed, and there isn’t a charger where their customer is.”

6-month flexi-lease needed

Vehicle funding models also need to evolve to support these trials, said Guillaume Pin, senior procurement representative Fleet, Travel and Logistics Europe, Ecolab. With 5,000 vehicles in 29 countries, Ecolab is looking to test the feasibility of electric vehicles with its drivers.

“Today one of our main projects around the fleet category is electrification,” said Pin. “We have recruited around 100 participants to volunteer for a pilot phase of six months all across Europe, and one of the main challenges we are facing today is basically the possibility to find flexible rental contracts of six months of the latest electric vehicles.”

Go to the Global Fleet Conference website to watch the Global Fleet Live Sessions and Regional Streams on Europe on-demand

Authored by: Jonathan Manning