Should small businesses stay with petrol and diesel vehicles?

Is your business still using petrol and diesel vehicles in fear of the unknown of switching to electric? Fear not: Allstar’s fuel and electric cost data shows what your costs could be for all fuel types.

For small to medium businesses, every shift in cost base can have a big impact on the bottom line. With many considering the switch to electric vehicles, there are varying different financial implications to consider, and it may even be that they decide that sticking with petrol and diesel is the way to go.

Considerations (or even unknowns) include funding and purchase, service, maintenance and repair, insurance, tax and used values. In this article though, we’ll look at the cost of fuelling traditional petrol and diesel vehicles against charging electric alternatives for some typical small business users, based on real-life 12-month fuel and vehicle efficiency data from Allstar. Please note: all fuel and electric prices stated here include VAT (5% domestic electric /20% public electric, petrol and diesel).

A small business with one small van

Running a single van mostly on local jobs and taking it home at the end of each day, our small business owner would have the opportunity to plug in overnight, which means the vast majority of electric mileage could be powered that way. If this business had run a diesel van for the past year, according to our AllCosts data*, it would have cost £2,016 in fuel for 12,000 miles. However, if that same business chose to go electric, with 90% of the charging done at home, and only 10% at public charge points for the odd ‘top up’, then it could have saved nearly £500.

According to our Allstar AllCosts data*, the cost of charging at home is much cheaper than in public (an average of 24p per kWh compared to 78p per kWh in public for Spring/Summer 2024), and so in this instance, just 10% of charging using public points would cost the business 28% of the overall spend.

Small diesel van

Small electric panel van

A small delivery business with five large vans

A delivery business with five vans, in which the drivers can’t plug in at home and so have to charge in public all the time, would cost far more to go electric.

In fact, those five vans would cost the business half as much to run if they stayed with diesel. It shows the importance of being able to charge at home and access lower domestic tariffs in this instance and why, in some cases, fuel is still a good option.

5 x large diesel vans

5 x large electric vans

A director level company car driver

A small business director looking to change from their large petrol SUV could make a major saving if they went electric (and that’s before their personal Benefit-in-Kind bill is factored in, which is likely to be far lower for the EV). Driving 15,000 miles a year, and able to do 80% of their charging at home, this director could save more than £1,000 a year by going electric.

Large petrol SUV

Large electric SUV

A small engineering business with 10 cars

This business has 10 cars which engineers use to visit sites. The crucial consideration here is how many of those engineers can charge at home: at the moment let’s say they can only manage 60% of their charging domestically because some don’t have home chargers, and they also do a high mileage of 18,000 miles a year. In this scenario, the difference in cost between petrol and electric isn’t much – only about £1,000 over 180,000 miles. So other factors might be a consideration for a company to choose electric over ICE: being seen to be more sustainable, charges for Zero Emission Zones, or how much time spent using public charge points will interfere in work time. If this business could switch the amount of charging done at home to 80% of its total mileage, its cost would come down considerably, to under £22,000 a year, and the switch to electric would be a big win.

10 x petrol family hatchbacks

10 x electric family hatchbacks

These examples show that for small to medium businesses, there are many positives for going electric, as long as the right conditions are met, while petrol and diesel still have a place for many too.

To make the right choice, you need to think about the mileages and routes your drivers do, the type of vehicles and their range, accessibility to charging at home and in public and finding lower fuel prices and tariffs for electric.

However, if you’re not ready to go electric and fuel works for you, Allstar Chargepass could help you to save money at the pump across the Allstar Discount Diesel network, alongside access to major low cost supermarket sites.

For more information on costs of fuel and electric that will help your business make the right decision about what to do next, download our Allstar AllCosts report here.

Stay tuned with Allstar for more tips on optimising your business vehicle fleet and making informed fuel choices!