What are the current benefits and risks for companies when investing in electrified fleets?
The main risk is that it is still a relatively immature market, which creates concerns about performance, risk and longevity. However, the benefits of reduced running costs, as well as the reduction in congestion charges and additional tariffs for taking vehicles into city centres, will counterbalance these concerns.
Will the move from ownership to subscription models help to drive demand for electric vehicles?
There is a definite shift towards mobility as a service amongst Generation Z, and the same individuals are much more conscious of the damage that is being done to the planet. Therefore, the organisations that are looking to provide this service will definitely need to have an element of electric in the fleet to satisfy this demand, which will in turn increase the EV car park.
Do you think there is sufficient infrastructure to support the projected demand?
Not currently, but plans are in place to increase the infrastructure. We are already seeing high levels of enquiries through our partners Raw Energy and ChargePoint as both businesses and local authorities are looking at how they can develop infrastructure on a local level. Supported by national government schemes there is no reason that the infrastructure won’t grow in line with demand over the next few years.
One concern for buyers is the uncertainty around residual values of electric vehicles. Could PCH finance offer a risk-free route into EV ownership?
Providing the funders who sit behind the PCH schemes can get comfortable with the RV position on new electric vehicles then PCH can absolutely drive change on both private individuals, as well as company fleets that are opting away from company cars and moving into cash allowance schemes.
Does financing an EV insure the consumer from battery and car technology improvements and advances?
No, the client is still going to be locked in for the period of the Hire Purchase / Finance Lease – however this is no different to the changes in efficiency over the life of a lease of a traditional combustion engine. Unlike phones and IT, a car purchase is a longer-term investment and purchasers fully expect new models to be released in the current market, so this shouldn’t really have an impact.
Could the rapid development of battery technology be a deterrent to companies investing in EVs? As current technology may soon become redundant?
The batteries in the market at present are considerably more efficient than a few years ago, so that initial steep curve has already been climbed. Vehicles with extended range are now readily available and the technology is now proven. There are a number of models that can do in excess of 150 miles on a single charge, with a handful reaching nearly 300. Battery development will continue, but the law of diminishing returns has started to apply. Range anxiety is certainly now starting to become a thing of the past, and as more charging stations come online, that will continue.
The government has withdrawn subsidies very early for most in the car industry – when in the future would be a better time?
Subsidies are a good way of encouraging early adoption – however it isn’t the key driver.
Is it a case of patience or should the government be doing more now to encourage uptake in EVs?
People are becoming more and more aware of the importance of moving to EVs, however the government does need to keep up the information campaign. Also, as government moves forward with the planned introduction of LEZ and ULEZ areas, additional incentives like reduced BIK, will encourage Company Car drivers to demand electric options from their employer’s fleet.
The big change will come when the major manufacturers start mass producing some of these models in place of internal combustion engines – a number of manufacturers are currently announcing a series of models, including Audi, BMW, Renault, Kia and even Porsche….so it is definitely moving in the right direction.