What is the Total Cost of Ownership?
If you are trying to understand what the true cost of owning an electric vehicle across its lifetime is, there are many factors to bear in mind, aside from the purchase price.
It’s not easy to predict the total cost of ownership (TCO) of an electric vehicle (EV) yourself, but if you speak to a fleet management company, they will be able to give you a clearer indication of what you can expect to spend.
How much does it cost to run an electric fleet?
The TCO for an electric car, van or LGV doesn’t just include the purchase price of the vehicle itself. There are several other factors to consider throughout the whole period of having an EV in your possession, including the costs of charging and maintaining it.
The total cost of ownership can be broken down into the following factors:
Vehicle cost
Whether you choose to lease, rent or buy your vehicle outright, there will be payments made to acquire the vehicles in the first place.
You will spend more upfront if you choose to buy your vehicle outright, but it’s worth considering the total cost of spreading your payments out – this could cost you more long term.
If you decide to lease or rent a vehicle, depreciation is another cost to factor in. It’s wise to understand what condition the vehicle needs to be returned in and your mileage limit to ensure you aren’t hit with any fees when handing the vehicle back.
Cost of charging infrastructure
When you invest in electric vehicles, you also need to factor in the costs of being able to charge from home and/or the workplace. This includes the cost of installing charging points.
It’s worth bearing in mind how many compatible charging points there are near where you live to reduce the risk of range anxiety. Zap Map is a handy resource to help you understand what facilities are close to you. The number of public charging points in the UK is expanding rapidly, but blending that with home and deport charging gives even further coverage. Whilst there is further upfront cost to installing your own charging infrastructure, once it’s done it’s there to stay. So, while there may be a large upfront cost for your first set of EVs, the cost will be spread out over the entire lifespan of your EV fleet, including vehicles brought in at a later date.
Difference in refuelling
The price of filling up internal combustion engine (ICE) vehicles – petrol and diesel cars or vans – has rocketed recently, putting more pressure on businesses’ and individuals’ budgets.
Electric vehicles may typically cost more upfront, but the cost per mile of EVs can be considerably cheaper than their petrol and diesel counterparts. A TCO analysis will factor in this cost and compare other EV models to help you make an informed decision on what is right for your fleet.
Insurance costs
If you’re driving your electric vehicle for business use, you will need to insure it properly. Third-party liability cover will need to be taken out to ensure you’re covered should any accidents occur.
For a fleet of vehicles, you can insure all of the vehicles under one policy for easier management. It’s important you keep on top of your fleet so you have appropriate cover for all vehicles and drivers within your business.
Servicing, maintenance and repair (SMR) costs
As with ICE vehicles, electric vehicles will need servicing to ensure they stay on the road for longer, as well as within the manufacturer’s warranty. Failure to maintain newer vehicles can void the warranty and leave the owner with a lower value asset and high SMR costs.
A fleet management company like Rivus Fleet Solutions, will be able to help you plan when SMR activities are due on your electric fleet so you never fall behind.
Disposal costs
A common expense that is sometimes overlooked is the moving on of vehicles at the end of their cycle to make way for a new fleet in its place.
If you need to sell your fleet in anticipation for a new set of vehicles, a fleet manager can help with arranging this transition on your behalf. It’s worth preparing far in advance of getting your new fleet so the transition is as smooth as possible.
Remember, you can save on EV costs
One key advantage of using EVs in your fleet is the associated government incentives. It is worth seeing what incentives and subsidies are in place for consumers and businesses to help you pay less. The UK Government has invested in support for EV models by rolling out new charging points ahead of the phase-out of petrol and diesel vehicles by 2030.
There are subsidies in place to help with switching over to a new electric car or van, so speak to a fleet management company or visit the Government website to find out how you can get help with switching.
Get help managing your EV fleet
Rivus has a dedicated Electric Vehicles as a Service (EVaaS) offering to help business decision-makers get their drivers on the road with EVs.
With the market constantly changing and advancing, we can help you by modelling the size and type of fleet that will suit your business the best and lay out a full plan so you can see the TCO of your required fleet with no hidden charges.
Our team can also support you with analysing fleet performance, so you can understand how both your vehicles and drivers are operating.