Think that it’s only possible to use battery powered commercial vehicles over short distances? Whether you’re an SME or a large corporate, perhaps it’s time to think again…
Many businesses are taking it slow when it comes to van electrification, because they’re concerned about range and costs. But, this isn’t always the case: if you crunch the numbers and get your planning right, it is possible to drive high mileages in electric vans. Here we explore how.
A couple of caveats though. We’ve taken a look at one van as an example, and of course, with other models, range and costs may change. But for starters, this should get you thinking…
A scenario for electric van drivers
We’ve chosen the Vauxhall Vivaro-e electric van (which is also produced as the Peugeot E-Expert and Citroen E-Dispatch) which has an official tested range of 205 miles from its 75kWh battery pack.
Assume that it’s unlikely in the real world you can achieve the official lab tested range very often, and with payloads, weather, road conditions and driving style reducing efficiency, this van’s range could be around 20% less than quoted, at around 165 miles. Doesn’t sound much, but it might be enough…
The perception is that vans do vast mileages every year, charging up and down motorways, but the reality is rather different. Department for Transport research showed the average van travels 13,000 miles a year, around a third travel regionally every day, and half only travel about 15 miles from their base on a typical day.
So how does electric fit into these scenarios? Let’s take a slightly above average mileage driver doing 25,000 miles annually working regionally 250 days a year, in the West Midlands. Based in Birmingham, they are going to be driving as far north as Stoke-on-Trent, west to Shrewsbury, south to Cheltenham and east to Northampton – all of which are in a 50-60 mile radius.
Not surprisingly, this driver would average around 100-120 miles a day going to jobs and back to base, and as a result, that’s well within the real-world performance of their 165 mile electric van.
Of course, there are days when they are doing far more than 165 miles (and then others when they do far less), but we’ll come to that later. The key now is to do those miles as cost effectively as possible.
Make every cheap mile count
A mid-range Vivaro diesel van also doing around 20% less than its official tested figure should achieve about 32mpg. At an average fuel cost of around 135p per litre (excluding VAT) over 25,000 miles it is using around £4,800 of diesel, equivalent to 19p per mile.
Now for the electric alternative. Here, accessing cheap electricity could be key. If you can identify drivers who can charge at home overnight, and they are on the right domestic electricity tariff, the savings can be notable.
Let’s look at how you can charge that 75kWh battery at home.
Some providers are offering EV specific tariffs at around 10p per kWh for off peak charging. Available overnight for around seven hours, that means 70% (or 52kWh) of the battery can be charged for just £5.20. Assume the rest (around 20kWh) needed charging at a higher rate of 28p per kWh, then this would cost £5.60. Together, the battery is fully charged for about £11.
Simply then, they can do 165 miles at £11, equivalent to 6.6p per mile. If a driver could achieve this over 25,000 miles (and we know that’s probably not practical, as it would require some more expensive public charging from time to time) the overall energy cost would be £1,650 – about £3,855 less a year than the diesel equivalent.
Then factor in you’ll be likely to keep a van for four or five years, or more, and that saving could balloon to around £15-19,000 per vehicle.
The cheapest 75kWh Vivaro-e is priced at around £40,000 (ex VAT) with the Plug-in Vehicle Grant included, while the lowest-priced diesel Vivaro is around £28,000 (ex VAT), meaning the cost saving for using electric could even cancel out its initial higher cost, depending on various factors, and that’s for outright purchase. With leasing, you might be able to get their outlay costs closer, accentuating the saving.
Making public charging work
Of course, if your electric van can’t be charged at home (or on lower tariffs in a work compound), and is heavily reliant on public charging, then it might be that the sums don’t add up.
If you had to charge in public at an average of 60p per kWh all the time, then your energy bill for 25,000 miles would be £6,750. It’s not vastly more than the diesel (and some may potentially be offset by lower servicing costs, of which more later) but it’s enough.
Instead, the trick is to use public charging when it’s only really needed, and then only to get you back to base, or home, where cheaper electricity is available.
Accessing the cheapest electricity
To make high mileage vans work, it’s essential to access the cheapest electricity as much as possible. That’s where Allstar can help. Allstar Homecharge* not only takes the hassle out of paying for charging at home for your employees, but gives you a complete record of all their charging and tariffs.
That way, you can ensure you can keep costs as low as possible, and measure how much charging is being done on the lowest tariffs.
Then, on the road, they can use the Allstar One Electric card to access thousands of chargers to make top-ups to get them home, with the payments made easily either through the card or via Allstar on Zap-Pay.
Factoring in VAT
One other cost to factor in is whether you can reclaim the VAT on filling up and charging. For business mileage, most VAT register companies may be able to reclaim VAT on business use of petrol and diesel, as well as electric from public charging, all of which are rated at 20%. Home electricity VAT is rated at 5%.
Being able to potentially reclaim VAT could have a major effect on comparative costs – in our example of a diesel van it would reduce the fuel bill by around £1,000.
An electric van charged at home may well still be cheaper overall though, and HMRC says that it is possible to recover the input tax for charging an EV at home for business purposes as long as mileage is recorded.
With Allstar Chargepass* and Allstar fuel cards, all VAT payments can be monitored, giving fleets visibility over costs, and invoices are HMRC compliant too.
Making the costs of running electric vans work
Crucial to making electric vans work on your fleet is keeping their running costs as low as possible, in order to maximise the savings you’re getting back in energy costs.
Firstly, there’s the Government grant available which could pay for 35% of the purchase price up to a maximum of £5,000, if the eligibility criteria is met, which helps offset some of the higher up-front cost involved with electric vans.
Then there are other cost benefits, with currently no road tax and no London Congestion Charge to pay.
There are also potential savings to be made due to less maintenance for electric vehicles - Vauxhall claims the SMR costs for a Vivaro-e could be 30% lower than an equivalent diesel van.
So, high mileage electric vans can be done
If you can identify the right van and driver, get your mileage and routing sorted, have a robust payment strategy and wide-ranging charging infrastructure in place, and procure vehicles cleverly too, these figures show high mileage electric vans can work, no matter the size of your business.
Of course, this isn’t going to be the case in every scenario, but increasingly it is the case as range increase and prices drop. It pays to do your own sums, and see whether it could work for your business…
Take a look at how Ringtons adopted their mixed fleet here.
*In order to comply with HMRC Vehicle Fuel benefit businesses may require a process to identify and reclaim payments for private use.
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