TCO for electric cars: 5 key questions
Driving your company towards green mobility has never been easier. Figuring out the costs of an electric fleet on the other hand, can be quite a hassle. By answering five questions, you’ll be up to speed with the the financial specifics of fleet electrification in no time.
1. What is Total Cost of Ownership all about?
Why are a lot of fleet managers still hesitant to switch to electric vehicles? Their price tags. True, a lot of EVs are more expensive than their ICE counterparts. But there’s more to be reckoned with than the cost of the vehicle alone. From subsidies to lower maintenance costs: when considering an electric fleet, it’s smarter to look at a more extensive parameter: Total Cost of Ownership.
TCO is the sum of all predictable costs regarding a vehicle. These are the most important building blocks:
- The initial investment: as EVs are becoming increasingly popular, their prices are likely to move closer and closer to those of traditional vehicles.
- Costs associated with maintenance and repairs: EV’s have fewer components and moving parts, resulting in lower maintenance costs and downtime
- Tyre costs: for the time being, EV tyres are more expensive and larger, since they carry the increased load of the battery. You’ll have to replace them more frequently than on a traditional car.
- Residual value: Although EVs and particularly BEVs are relatively new to the used-car market, they already show better residual values than ICE (Internal Combustion Engine) cars.
- Energy and fuel costs: these will depend on the type of vehicle you choose: a PHEV (Plug-In Hybrid Electric Vehicle) or BEV (Battery Electric Vehicle). Read more about the difference in our TCO whitepaper.
Try our free TCO Simulator
For your convenience, we’ve developed a TCO Simulator that takes every factor into account. Vehicle make and model, expected mileage, depreciation, fleet size, maintenance, insurance costs plus fuel and/or energy consumption, among others. The TCO Simulator even takes local legislation and regulations into account. It’s available for Belgium, France, Germany, the Netherlands and the UK.
2. What are my charging options?
Of the forementioned costs, the price of charging will take up the biggest part of your budget. EV drivers have different options when it comes to charging, each with its advantages and downsides.
It’s advisable to address the use of public charging stations in the company vehicle policy and to encourage employees to use cheaper alternatives. Of course, if you encourage charging at home or work, you’ll have to take infrastructure costs into account. The Athlon EV-whitepaper explores EV-charging further.
The most popular charging options:
At the officeThe cheapest option, since electricity costs are usually lower than anywhere else
At homeSlightly more expensive than office charging
At public charging stationsThe most expensive option, especially when choosing charging stations with High Power Charging technology
3. What about the rules in different EU countries?
Taxes, subsidies and other incentives have a sizeable impact on TCO. These vary widely at European and local levels. Did you know that TCO differences could amount to more than €10,000 depending on which European country you’re located in? Be sure to check out your country’s rulebook in order to make a proper calculation.
Also, it’s important not to forget that many countries have introduced taxes on CO2 emissions. You’ll need to take them into account when establishing the TCO of a traditional vehicle, just as you take subsidies, rebates and incentives into account in calculating the TCO of an EV.
4. Why do I need to take taxes for drivers into account?
The amount that drivers are required to contribute to the costs of a vehicle vary from country to country, and will vary over time. You’ll need to take these incentives or costs into account because your drivers will. The amount of taxes to be paid for a PHEV and a BEV will surely steer them into a certain direction. You need to be aware of this to understand people’s choices.
Example: In Germany, the difference in taxes for an employee between a PHEV and a BEV isn't very significant. In the Netherlands on the other hand, a BEV is much cheaper from a driver perspective. Unsurprisingly, there is a preference for the BEV in the Dutch market.
5. Why is it important to listen to drivers?
You’ll need to meet the demands of your employees. The possibility of having an EV as a company car will surely come with many questions, like home and office charging possibilities, incentives, car policies, and so on. To get everyone on board, a tailored approach will be necessary for each driver. Make sure to check out the EV-whitepaper for an overview of considerations you should explore.
A smooth switch
With so many governments offering subsidies or incentives, the increasing popularity of EV’s, and the growing environmental concerns, the time to switch to an electric fleet has never been better.
Do you still have questions regarding this changing market? Are you unable to find exactly what you are looking for in an EV? Do you want more information about contracts? We’ll help you navigate, step by step.