Insights / Making the business case for an EV fleet

How to make the business case for an electric vehicle fleet

21st June 2021

As a corporate fleet manager, a procurement officer or an energy manager, you may be strongly convinced that electric vehicles (EVs) are part of your future transport mix. Or perhaps you’re just EV-curious.

If you’re going to move forwards, you probably need other people – like key stakeholders – on board, and you may need to be persuasive. You’ll need a strong business case. But the onus to create one doesn't necessarily fall on you.

How to make the business case for fleet electrification - Hero Image

At Drax, we’ll assemble the ultimate business case for you as part of our service. Before recommending any evolution of your fleet, we’ll determine your fleet’s potential and make sure there’s mileage in converting your ICE vehicles.

But, even before then, we’ve got some ‘laying the groundwork’ recommendations. Think of this as ‘Step Zero’ - the preliminary things you should do. It’s a bit like “building the case for the business case”.

• Don’t go solo

Big or small, tactical or strategic, evolving your fleet is still a change project. Studies have shown that fleet managers are eager to make the transition to electric but feel held-back by their leadership team. That leadership team hesitancy is actually helpful. It forces the process to be logical, data-driven and persuasive, not a leap-of-faith.

• Don’t dabble

Some key stakeholders can get impatient and be eager to jump on a change as if it’s an ‘initiative’. Your role is to harness their enthusiasm but show that you’re taking a methodical approach. Otherwise, their initiative-fever can quickly return to room temperature.

• Don’t think giant leap, think small steps

Electrifying your fleet is rarely a wholesale, single step change. From the outset, condition yourself and others that this may be something that is piloted, or trialled. If you have more than one site, it’s likely that one of those sites is the most practical place to implement an EV trial. By managing expectations, you can alleviate any change-anxieties.

• Don’t rely on other people’s data

Assessing the readiness of your fleet is not an arms-length exercise that uses only vehicle manufacturers’ ‘book data’, official charge point performance data or the experience of other fleets. Ultimately, the right solution for you will be based on a very bespoke assessment of your requirements and the real-world conditions your fleet has to perform within. Falling back on using official manufacturer figures (to justify their product) will have limited relevance.

Now you’ve laid the foundations, you can work through creating the business case in earnest.

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5 steps to build your ‘Step Zero’ business case:

Step 1: Align with business strategy

Even the most dedicated of us can’t necessarily recite the company’s vision and mission statements, but you probably know where to find them. So, why not re-familiarise yourself with the current mission statement and any other documents that outline your company’s vision, such as the most recent annual report.

Identifying what the business is trying to achieve - this year and beyond - and placing the (potential) benefits of fleet electrification against these - will help you to know how fleet electrification might be positively communicated - in line with stated company goals, such as…

• Financial

An EV fleet is potentially cost-saving, within a mid-to-long-term timeframe. EVs can lower operating spend by reducing energy costs by 2-3 times, and the maintenance of an EV fleet can cost 70% less compared to an internal combustion engine (ICE) fleet. Technological advances will give electric fleets the opportunity to optimise vehicle-to-grid (V2G) capabilities and potentially earn money. But, if the business is in short-term cost-cutting mode, it may not be the right time to get the attention needed for the change.

• Environmental

It would be rare today to find a business that has not placed sustainability goals in its objectives. Fleet electrification can make a significant contribution to hitting sustainability targets. Battery EVs show a better reduction in emissions (compared to ICE vehicles) over the lifecycle when accounting for production, use, and recycling. An EV is also three to five times more efficient than an ICE and going electric eliminates particulate pollution and so improves air quality. These are important considerations for organisations that want to reduce their overall energy consumption, have a positive impact on the environment and meet current and expected future regulations relating to carbon emissions and reporting.

• Health & Safety

Fewer components allow for more flexibility in vehicle design, and the position of the battery pack on the bottom of an EV provides more crumple zone space. The lower centre of gravity due to the battery position also improves handling and can help to prevent rollover accidents. Safety features including lane assist and vehicle sensors provide improved visibility. Remote software can update these capabilities as they are developed. Future electric vehicles will be automated, removing the risk of human error while driving.

• Reputational

Public concern about the threat of climate change translates into demands from customers and investors. This brings the role of corporate communications into the mix of internal influencers and stakeholders. While regulatory compliance matters, for many other companies the opportunity to become an industry leader can be a powerful motivator to make the transition to an electric fleet. Certain clients might expect organisations working for them to show evidence of carbon emissions reduction now and in the future. Plus, at a practical level, customers and prospects might expect to plug into your charger when they visit.

• Motivational / employer brand

More than a nice-to-have feelgood factor, your company may have explicit goals around attracting talent, and motivating existing employees. Visible acts of forward-thinking and progress, like transitioning to an electric fleet, are sources of pride. It’s not just millennial and Gen-Z future employees who are attracted to work for a progressive company, either.

Step 2: Lead with the moon-shot

Working through these strategic organisational goals may have already given a sense of priority to your business case. If you’re still unsure which is the most important, you can also look for your company’s ‘moon-shot’ - a long-term, 10-to-25-year goal, guided by your company’s core values and purpose. You’re looking for something like…

  • Tesla: To accelerate the world's transition to sustainable energy.
  • General Electric: Become #1 or #2 in every market we serve and revolutionize this company to have the speed and agility of a small enterprise.
  • Drax: Enabling a zero carbon, lower cost energy future.

If the benefits of fleet electrification can be hitched to that moon-shot, any CEO will find your proposal irresistible. Start your case with this.

Step 3: Who has a stake?

The exercise of aligning with the company’s goals should lead you straight to key stakeholders, because those ambitions will have ‘owners’ within the company.

These are likely to include:

  • Finance Director
  • HR Director
  • Sustainability Director
  • Energy Manager
  • Head of Corporate Comms
  • Procurement Lead
  • Head of Talent / Recruitment
  • Fleet Manager (if this isn’t you)

To help you plan how to engage with the relevant decision makers, you could use a simple map, like this, called a Power Interest Grid.

Power interest grid

If the Finance Director has high power and low interest, they would be in the upper-left quadrant: “Meet Their Needs.” If the head of corporate communications is low power and high interest, then they are in the “Keep Informed” quadrant.

Anyone in the top-right “Key Player” quadrant should be actively courted and recruited for the project team.

Step 4: Find your champion or ally

You’ve obviously got ‘High Interest’ yourself, but if your own influence couldn’t be described as ‘High Power’ then you’ll need to look for a Key Player stakeholder to be your champion. An executive sponsor who will drive the project forward is a great asset. If you’re right about their own desire and commitment, they should be pleased to be asked.

Let them take the reins, pull together and brief the “Key Players” project team. Share your analysis of the alignment with business goals, and then work together to move this to the next step.

Step 5: Conduct a suitability assessment

This is where Drax's Electric Vehicles team come in.

Whether your project team is just you, or a group of six key players, we’re ready to listen to your goals. That way, we’re charged-up to know what’s achievable and then help you work out what’s realistic for you.

Bespoke data-analysis - our evSetup - will assess your fleet’s EV potential and understand your operational requirements.

Understanding the demands on your current fleet via our existing vehicle usage review provides crucial data for simulating how EVs would fare under the same conditions. So, we collect information relating to your vehicles’ mileage per trip and per day, load requirements, areas of operation and resting locations.

There’s no hiding that EV purchase prices are higher than those for traditional ICE alternatives. However, electrification holds the potential for savings, too. EVs avoid the costs of refuelling with petrol/diesel; have lower maintenance requirements; and offer tax benefits and toll, levy and congestion charge exemptions designed to incentivise conversion. We consider all these factors in our comparative cost analysis.

We’re hardware-agnostic for EV charge points. And with a keen eye on the latest developments in both energy and EVs, we’re able to make comprehensive assessments in delivering an accurate total cost of ownership (TCO) for you.

That’s when we give you a tailor-made business case, not just a PowerPoint presentation. We’ll arrange demonstration days for drivers and other decision-makers too, allowing you to try the recommended vehicles before committing to purchase.

With so many factors influencing your decisions, we’re here to help you solve the charging puzzle by providing clear, practical and future-proof charging recommendations.

Once you've proved your businesses suitability for electrification, you're ready to act. Read about the journey that will follow in our new guide - 8 steps to electrifying your business fleet.

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