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CFC Solutions say rising fuel prices may speed adoption of electric vehicles

Rapidly rising petrol and diesel prices may help to speed up fleet adoption of electric vehicles, says CFC Solutions.

The fleet software industry market leader points out that petrol and diesel prices have risen by around 3 pence this month alone, and are roughly 40% higher than they were just three years ago.

Neville Briggs, managing director at CFC Solutions, said: "It is getting more and more expensive in real terms to get into a diesel or petrol car or van and just turn the key. Fleets are gradually adopting more fuel efficient vehicles and taking more notice of journey management to try to counter this but the gains they are making are nowhere near enough to offset fuel price rises.

"In this respect, EVs promise a step change in fuel savings. Figures as low as 2 pence a mile are being mentioned by some advocates compared to something like 15 pence for a normal petrol car. Even if the real world figure for EVs turns out to be higher, there are still substantial fuel savings to be made as well as the likelihood of much lower service, maintenance and repairs costs.

"While there are sometimes monthly fluctuations, the price of oil has risen historically well above the rate of inflation and there is every reason to expect that it will continue to do so. Although this will tend to increase the cost of electricity too, EVs will remain much cheaper in day-to-day operation."

Briggs said that if, as planned, some manufacturers and contract hire companies were going to separate the batteries from the vehicle itself in lease agreements, a major hurdle would have been overcome and that the last remaining issue would be range.

He said: "The longevity of the battery technology is something of an unknown and, with fleets potentially keeping cars or vans bought today for five years, their degradation is an issue on which they will be unwilling to take the residual risk. However, separated lease agreements solve this problem.

"This just leaves range as an operational issue. However, many fleets are now used to operating a degree of journey planning because of the high cost of petrol and diesel, and perhaps this is less of an issue than it would have been a few years ago. While a 100 mile range is clearly an issue for some drivers, for others it is more than adequate and the arrival of range extended EVs such as the Vauxhall Ampere will also potentially remove this anxiety.

"But what may really swing fleet thinking towards EVs is that, just as new electric models start to become available in larger numbers towards 2013-14, there is every possibility that we will be paying £1.50 for a litre of petrol or diesel – a price that could make the cost of charging an EV look very attractive indeed to car and van operators."

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