Is now the time for businesses to invest in electric vehicles?

Right now many businesses, small and large, will be putting investments on the long finger. Battered by lockdown and economic crisis, most will certainly not be thinking of changing their vehicle fleet over to electric power, but that – according to one senior member of the Irish motor trade – would be a mistake.

Mark Barrett is managing director of Harris Automotive Distributors. Those who motor past Dublin's Red Cow Inn will recognise Harris as the vast acreage off the Naas Road, swarming with vast fleets of vans and heavy trucks. Harris is now the distributor for the new LDV EV80 electric van, and the incoming new Maxus e-Deliver3, and Barrett says it's vital for businesses to start thinking – and thinking at the very least – about the switchover to electric power.

“It’s certainly time to start doing a bit of research, and see if and when the transition is feasible for you,” Barrett says. “Obviously, at the moment, everyone is worried about the economy, and some are just surviving, but we have noticed that with some of our clients, especially those in the delivery sphere, they’re out the door with work. Just as an example, in the UK we work with a milk delivery service, and they’ve switched to EV vans. They had 159 in service last year, and they’ve just ordered 100 extra, because they’re up 28,000 customers and that’s because of the lockdown.”

After the pandemic, every government is going to be looking to get in as much revenue as possible, so it will become a business imperative to go green

The rise and rise of home delivery shopping – which was gathering pace long before the lockdown – could also trigger a major rise in emissions. According to the European Commission, delivery vans account for some 12 per cent of overall vehicle emissions, and 2.5 per cent of the total carbon-dioxide emissions of the EU. Driving that figure down has been a key EU project for some time, and while van manufacturers actually hit emissions regulations targets ahead of schedule (reaching the 2019 target of 175g/km average fleet emissions in 2013 – the 2020 target is 147g/km), further restrictions are likely to be coming down the tracks, especially when it comes to city centres.

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"Just look at what's happening in the UK. For example, in London, on certain streets – and this was enforced with just three weeks' notice – you're only allowed to operate on those roads with an EV between rush hour times. If you look at the layout of Dublin, for instance, it's pretty easy to see how they could map out low-emission and zero-emission zones with the M50, the North and South Circular Roads and the canals."

Barrett also has a warning for those not paying attention to matters beyond Covid-19. “After the pandemic, every government is going to be looking to get in as much revenue as possible, so it will become a business imperative to go green. Once you start adding things like congestion charges to the whole life cost of a vehicle, the economics of it is just going to come out in favour of an electric van.”

So, what should businesses be doing? Barrett says that it’s not a case of simply trying to switch to electric tomorrow morning. “What are your daily activities? When we meet with a potential new customer, we chat about their business first. So what are your fixed routes? What’s your maximum driving mileage in a day? From that we start to get an understanding of what’s needed. If you’re going from Cork to Dublin now, and you need to be in Galway in the afternoon, then to be honest a diesel vehicle is still going to work out best for you for the moment. Now, when the public charging infrastructure improves, and you can take a break for a coffee for 30 or 40 minutes on a journey like that, then maybe electric starts to come into play for those longer routes.”

There’s more to it than merely how much mileage your van drivers cover in a day, though. “You have to look at shift work, too. So, is a vehicle coming back in, being turned over to another driver, and heading straight back out? If so, then you need to look at installing ultra-rapid chargers at your premises or your depot, and that adds to the cost. Plus you might need to upgrade your electricity supply to physically get enough juice in through the door,” says Barrett.

“So we go through that to make sure that the customer knows what they’re getting into, and is prepared. You know, selling a diesel or a petrol vehicle is pretty straightforward, but once you’re talking about electric what we don’t want to do is to sell something that we know, or our dealers know in their heart, that’s not really going to suit a customer’s requirements.

Government grants for moving to an electric commercial vehicle are small compared with other territories

“We’re seeing a massive appetite for electric power, but I would urge businesses to take some time now to think it through carefully. For a car it’s a little easier. You know, if you get to a public charger and it’s occupied, then it’s an inconvenience, an annoyance. For a van operator, that’s your livelihood, so it’s a different scenario.”

Barrett says a big issue is that Irish government grants for moving to an electric commercial vehicle are small compared with other territories. "In Norway, the grant amounts to up to 50 per cent of the cost of the vehicle. In the UK, it's up to a maximum of £8,000 (€8,874). Here? We get €3,800. Now, that's still a lot of money, but it's extremely poor compared to our neighbours, and let's face it – how much are we spending paying carbon emissions fines?"

It’s also worth noting that, when buying an electric vehicle, companies can write off the capital cost against tax in year one, rather than parcelling out depreciation year on year.

Even so, the electric delivery van segment is about to take off in a big way. Mercedes, Opel, Peugeot, Citroën, Toyota, Volkswagen and Ford all have fully electric or plugin-hybrid vans launching soon, or on the market already. Restrictions on city-centre and suburban use are unquestionably on the minds of legislators, not least given that so many more of us are now doing our shopping on a keyboard, rather than on a high street. Companies don't absolutely, unquestionably, have to go electric right now. But it would be foolish not to use this time to at least consider it.