The Business Case
Are EVs practical for businesses?
In short, yes – EVs are the more practical choice for business. They are more cost effective to run, easier to maintain, and deliver a superior driving experience.
In a petrol car, travelling 12,500km a year costs about $2500. A fully electric vehicle for the same distance only costs about $500. That’s a significant reduction in costs for any business, especially one that involves a lot of driving.
What about range? It used to be the big drawback but modern fully electric vehicles have a range of between 120-160km of travel – the average daily trip in New Zealand is 29km and 90% of travel by car in NZ is less than 90km. Improved battery range and charging infrastructure has now made long-distance BEV fleets entirely possible. To decide if an EV is right for your fleet, work out the daily travel of your vehicles. If some cars need recharging during the business day, you may be able to identify periods where the vehicle could be plugged in. This could be at the office, during employee breaks or meetings, or look at one of the public fast chargers available around the country. You can locate these chargers on the Plugshare app.
Our members have been through this process and EVs are working well for their fleets – get in touch with us if you’d like to chat to one of them about the practicalities of EVs in your fleet or read our case studies below.
Case StudiesCase studies of companies already using EV
To support New Zealand’s EV uptake and sustainable business practice, Downer is integrating EVs into its operations. We have switched two ICEs for EVs for the Hamilton Infrastructure Alliance network inspector cars, and added an EV pool car at the Auckland and Wellington offices.
Ever-expanding charging network
There is an ever growing nationwide network of rapid DC chargers and the technology is rapidly improving – between 15-50 kWh compared with the average 8-10 kWh at your office. That means your drivers can recharge their vehicles in less than half an hour, rather than requiring overnight charging.
The costs of running a fleet of EVs are far less than those of petrol or diesel fleets, and they are continuing to reduce as EV uptake gathers momentum. Many fleets are taking the opportunity to review their vehicle needs as they start the transition to electric. Often this review shows that by using the fleet more efficiently, they could reduce their vehicle numbers.
Charging and health & safety
Overseas uptake shows 95% of recharging is done overnight at work or at home with little extra investment in infrastructure required. This means most of your fleet charging can be done overnight, at your drivers’ homes or at your worksite. This is especially true if you begin your transition with your pool cars. You can install chargers where they are normally parked overnight, saving time refueling.
EVs can be charged on standard sockets, although other sockets and supplies such as wall mounted or fixed pedestal chargers allow more convenient and slightly faster charging. Some businesses choose to invest a bit more and install rapid chargers – making faster charging possible and an excellent PR opportunity. For instance, when Fuji Xerox installed charging stations at their airport warehouse and made them available to others, they made charging more efficient, and attracted people to their brand – a win-win.
When you are ready to extend your fleet transition to long-distance vehicles, you don’t have to worry about your drivers stopping overnight. Soon, rapid chargers will be established at over 100 sites nationwide, such as some petrol stations and shopping centres, with more being installed in the near future. These are places your drivers might visit for half an hour anyway, so they can recharge vehicles while they’re stopped for a meal or break.
Charging EVs on standard household sockets is safe as long as a few simple precautions are taken. Click here for information on how to charge.
What are the financial drivers for using EVs?
An increasing amount of global-facing corporates are committed to carbon reduction goals and sustainability targets. With an 80% reduction inCO2 emissions, environmental and leadership considerations are at the forefront of the decision to transition fleets to EVs. There are also key financial benefits to transitioning your fleet.
Although purchase costs are often higher, the lower running and maintenance costs of EVs quickly begin to counter this upfront investment. Some companies are beginning to offer extended leases on EVs.
Total costs of an EV fleet depend on a number of factors, including initial costs, your usage profile and capital. In the first instance, have a look at the EECA’s TCO tool to see what the total cost of ownership would be for your fleet.
However, to understand how transitioning your fleet to EV could positively impact your bottom line, contact any of these leasing companies to discuss your situation:
EVs’ ever-reducing costs
As with any developing technology, the economies of scale affect the individual unit cost of an EV. Starting the transition of your fleet to EVs now is a smart move – you can already benefit from cost savings and these will only improve your efficiency as the EV technology and infrastructure improves.
One cost that is set to decrease is batteries. A UBS Global Research report in August 2014 predicted that by 2020, the cost of batteries will reduce by 50%. Then there’s the competition – more and more car companies are producing EVs each year:
“In each of the years from now to 2020, there will be around 7-10 new models a year introduced into the market. Increased competition along with reduced battery prices will reduce the cost of EVs. (Many More Plugin Vehicle Models About to Reach New Zealand, MIA, 2016)
EVs’ lifecycle – are lithium batteries a problem?
There once was a concern around the environmental impacts of lithium batteries and their disposal. Since then, the technology has improved significantly. Individual cells can be replaced in the battery, meaning these batteries are almost never thrown away.
A Life Cycle Assessment report, commissioned by EECA, compared overall environmental impact of EVs and petrol or diesel cars. It found that taking into account manufacture, use and disposal, EV’s have a lower environmental impact. Click here to read the full report.
Further, batteries in modern EVs retain their value even once they are no longer useful in cars. They can be easily re-purposed for highly valuable uses such as stationary storage.
What are the socio-environmental drivers for using EVs?
EVs also come with socio-environmental benefits, which support and enhance most corporate social responsibility and triple bottom line reporting metrics.
In New Zealand there are two main sources of CO2 emissions – agriculture and energy. Energy accounts for 42% of the total, and transport makes up 43% of the energy emissions. Since 1990, emissions from road transport have increased by more than 60%.
80% of New Zealand’s electricity is generated from renewable sources, with an aspirational target of 90% by 2025. Charging EVs overnight will help to smooth out some of the peaks in our electricity demand and will help achieve the 90% renewable electricity target.
The greater the proportion of renewable electricity we produce, the greater the CO2 emissions reduction you will get from driving an EV in New Zealand, making EVs a win:win.
Drive Electric – doing our bit
DE was set up in 2012 to encourage people to consider buying an EV as their next car. A big part of that is simply about sharing information, but we’re also involved in a few other projects too.
Awareness, agreement and action
In 2014 we hosted a Ministerial Round Table with wide participation from industry. This gathering recognised the need for society to change its motoring habits, and agreed to collaborate in consumer education and promotion of a common goal – more EVs on the road.
Following this meeting, DE will work collaboratively with executives from automotive and electricity industries and their government counterparts to create a roadmap with shared goals to the Government Stimulus Package. This roadmap will provide initiatives and clear steps to get us there.
Motorsport with a difference
Innovation in automotive technology has usually been driven by motorsport, and that’s why Drive Electric established EVolocity – a programme to encourage schools, universities and businesses to design, build and race EVs.
Ruapuna Motorsport Park in Christchurch was the site of the first EVolocity event in 2014, with more to follow. In 2015, Drive Electric sold EVolocity Ltd to Rob McEwen, former DE Excutive Director and now a Life Member.
PlugIn – electric mobility awareness
The biggest job in establishing more electric driving is in education and awareness. PlugIn is an online programme offering useful information, education and calculators.
The programme is also part of live events such as test-drives and races, so EV technology can be experienced up close and first hand.