Navigating sustainable fleet management
08/10/2021
When it comes to the automotive industry, manufacturing is continually becoming more innovative and sustainable. The UK government has set a clear goal to end the sale of new petrol and diesel cars and vans in 2030 – meaning the UK automotive industry is required to make a significant commitment to make that happen. Retail giant Amazon, for example, pledges to have 100,000 electric delivery vans on the road by 2030. Similarly, Uber has joined forces with BP to convert its entire London taxi fleet to electric cars within five years.
The electric revolution in numbers
Take up of Electric Vehicles (EVs) is already accelerating, according to trade association The Society of Motor Manufacturers and Traders (SMMT). It says that 6,647 new EV registrations were recorded in the UK in February 2021, comprising of 3,516 battery-powered electric vehicles (BEVs) and 3,131 plug-in hybrid electric vehicles (PHEVs). This takes the combined total of plug-in vehicles on UK roads, at the end of February 2021, to over 455,000. In comparison, 2,508 BEVs and 2,058 PHEVs were sold in February 2020, totaling 4,566 new EV registrations, meaning that registrations of EVs is fundamentally rising in numbers.
Sustainability and environmental concerns
The UK government is required by 2050 to reduce its net emissions of greenhouse gases by 100% compared to 1990’s totals. The Road to Zero strategy, outlines the UK government's long-term plan to transition to zero emission road transport, by 2040, while reducing emissions during this period. The plan includes the introduction of ‘Clean Air Zones’ to improve the air quality in highly polluted areas. If a vehicle exceeds emission standards, motorists and organisations will have to pay a charge for driving in one of these zones. Some cities are already imposing these charges such as Bath and Birmingham and most cities will have introduced Clear Air Zones by 2022. Therefore one of the concerns a fleet manager will now face is how to reduce harmful emissions released into the environment, so as to avoid the payment of charges. There is however support available, as The SMMT has unveiled a blueprint to help deliver greater retail uptake of the latest electric vehicles, which includes measures to ensure that the electric revolution is affordable, achievable and accessible to all by 2030.
Risks surrounding managing an electric fleet
Many fleet managers looking to reduce their average emission levels are considering solutions such as Electric Vehicles. Zurich’s aim is to support organisations in achieving their goals and still provide comprehensive cover and risk management guidance. There are a number of different factors that organisations will need to adapt to:
Fleet managers: Fuelling a petrol vehicle versus an electric vehicle presents different tasks for fleet managers. Unlike traditional vehicles that can be filled up quickly whenever needed, electric fleet vehicles are typically fuelled either daily or overnight. That means fleet managers will need to more closely monitor charging to ensure vehicles are charged and ready to go. Because they are based on electricity prices that may be subject to complex
rate structures and demand charges, electric fuel costs are not as simple as £/litre at the pump either.
Facility managers: Electric vehicles go hand-in-hand with an increase in electricity usage. Facility managers must install and maintain an electric fuelling infrastructure on-site; typically a significant capital project requiring specific permitting and safety requirements. The electricity bill they receive every month that once may have only accounted for lighting and HVAC will need to be partially allocated as a fleet fuelling expense.
Drivers: Training updates need to be accounted for whenever new vehicle technology is introduced to drivers. Drivers must pay attention to an electric vehicle’s state of charge to be sure the “range is in their tank” is enough to accomplish their task. Because it might take between 30 minutes to several hours for a charging session, on-route charging requires more careful planning. On-route charging should therefore be minimized. Whenever possible, charging should occur while a vehicle is parked at its destination.
Zurich can help you to navigate the road ahead
We’ve made a commitment to sustainability and protecting our planet and we understand that our customers are making the same changes to their operations. As more of our customers are switching to EVs in their fleets, we have begun to review our fleet product and invigorated it in order to make provisions for the additional risks and exposures that EVs have, to ensure that our policyholders have peace of mind that they have adequate cover in place.
The car parc refers to the number of cars and other vehicles in a region or market, it is typically used to gauge the capacity within a market or region for aftersales. The UK car parc will be a mixture of EVs and Internal Combustion Engine vehicles (ICEs) for several years, until the ban of the sale of new petrol and diesel vehicles comes into effect in 2030. For this reason, instead of creating an individual EV proposition, we have included the below additional coverage into our motor fleet policy wordings:
- Defined an Electric Vehicle under our policy to provide clarity concerning the coverage provided
- Amended our definition of accessories to include charging equipment
- Added additional cover to Liability to third parties to include incidents like tripping over charging cables
- Irrespective of whether the EV battery is owned or leased, we can cover and make payments to the appropriate parties
- Our cover for the EV battery will be operative regardless of whether damage has incurred to the insured EV, for example due to an electricity surge
- As an optional extra, we can offer a hassle-free service to provide ‘like for like’ replacement EVs following damage to a vehicle
If you require further risk management or support with your Fleet please speak to your usual Zurich contact.
