Charging infrastructure ‘biggest bump in the road’ for electric vehicle take

In the UK, sustainability targets and lower running costs have increased EV company car take-up to 8%. REUTERS/Nick Carey

July 31 - In 1891, Gustave Trouve added a small electric motor and a rechargeable battery to a tricycle, and began to trundle round the streets of Paris, a full five years before Karl Benz’s first vehicles powered by the internal combustion engine went into production.

Since then, internal combustion has dominated, but with more and more businesses adopting targets around emissions and sustainability, the tide is now starting to turn, and nowhere more than with the humble company car.

In February, the Climate Group released the latest update on EV100, an initiative to make electric travel the norm. It revealed that businesses that are part of the project are now running more than 400,000 electric vehicles (EVs) globally, a 94% year-on-year increase.

The Progress and Insights Report also showed that the EV100 network, which includes global names like Barclays and Siemens, as well as local organisations such as New York’s port authority, has rolled out 30,000 charging units across 72 global markets, part of a commitment to install them at more than 6,000 sites globally by the end of the decade.

Sandra Rolling, director of transport at the Climate Group, has called on governments, carmakers and other businesses to match this ambition. “Far more vehicles need to switch to electric,” she says.

Workers assemble Chevy Bolt EV cars at the General Motors plant in Michigan. In the U.S. the IRA is incentivising EV cars. REUTERS/Joe White

“To support this, charging infrastructure must be built out rapidly and manufacturers must expand the volume and variety of vehicles on the market. Governments need to provide clear direction in the form of phase-out dates, supported by ZEV (zero emission vehicle) and CO2 standards.”

Avninder Buttar is vice president of strategy at Element Fleet Management, a Toronto-based company operating across Canada, the United States and Mexico, as well as Australia and New Zealand, and part of a global alliance with the French car-leasing company Arval.

He believes that many of the traditional obstacles to fleet electrification are dropping away. Availability has soared he says, with original equipment manufacturers (OEMs) collectively planning to spend $526 billion on electrification between now and 2026. Costs have also dropped as battery technology has improved, and with electricity cheaper than oil, EVs are more economic to run, too.

In the UK, for example, 8% of company cars are EVs, compared with fewer than 1% of the total UK car market. Lauren Pamma, a programme director for the Green Finance Institute’s Coalition for the Decarbonisation of Transport, puts this down to a combination of corporate sustainability targets and progressive fiscal policies, along with lower running costs and government initiatives.

“It not only ticks the green box, but there are actually a lot of other benefits that come out of driving electric vehicle fleets,” she says, such as the PR value of customers seeing popular brands on the side of EVs.

A number of UK government initiatives have supported the take-up of EVs, such as low rates for benefit-in-kind (BiK), which can mean significant tax reductions for employees choosing an EV over an internal combustion engine (ICE), and the fact that electricity isn’t classed as a fuel, so companies can offer employees the option to recharge for free.

Tesla has made its proprietory Supercharger network available to all vehicles. REUTERS/Mike Blake

The biggest barrier to EV take-up remains the global charging infrastructure, or lack of it, and this is where more government intervention is needed, says Buttar, whether by carrot or by stick. In western Europe and Canada, he says, they’ve adopted the latter, with strict rules setting out when the sale of new ICE vehicles will be banned, and restrictions on where the most polluting vehicles can go without paying a fee, such as London’s ultra-low emission zone.

Other governments have gone for an incentive approach. In the United States, both the Infrastructure Bill and the Inflation Reduction Act have allocated huge amounts of money to EVs to incentivise buyers, develop the charging network and, says Buttar, upgrade the grid and ensure there is enough capacity to cope with the surge in electrification.

As well as depot-based charging infrastructure, fleets also need to be able to tap into public charging networks when they’re out on the road. In the UK, there are plans to install 300,000 charge points by 2030, but Pamma points out that “it’s important not to focus on the absolute number but that they are in the right place”.

“One of the things that is stopping people putting in infrastructure at the moment is that they don't know how much it is going to be used,” Pamma adds. She hopes that new financing such as pay-on-use, which can offset the initial outlay on infrastructure by staggering repayments depending on how often it is used, will help take “the risk away from people building in advance of needs".

With McKinsey estimating that the market for fleet-charging services in the U.S. alone could be worth $15 billion a year by 2030, it’s little surprise that individual car manufacturers are also getting in on the act. Following Tesla’s decision to make its proprietary Supercharger network available to all vehicles, not just its own, Mercedes is the latest company to enter the market. In January it unveiled plans to install 10,000 recharging hubs, open to all EV users, across the globe by the end of the decade.

Without this public network, range anxiety will remain an issue, says Buttar, even if many EVs can now travel up to 500km between charges. “Sometimes you will need additional range – and if you don't have public charging infrastructure spread out enough, you don't have the confidence… so you take an ICE vehicle instead, and that’s counterproductive,” he says.

Less than 1% of private vehicles in the UK are EVs, with lack of infrastructure seen as a barrier to take-up. REUTERS/Toby Melville

The growth in fleet electrification is also boosting the market in secondhand EVs. More than 50% of new EVs are bought by fleets, says Pamma, and are typically sold on after three to four years. “We wouldn’t be seeing that supply of used cars coming through if it wasn't for that,” she says. “It's a big feed into the used car market.”

Fears about long-term battery performance are also being allayed, with specialist companies now focused on battery health analysis and charging history. One OEM Buttar has worked with puts a warranty of 10-12 years on its battery, and expects a degradation in battery life of just 15-20% over the whole period, he says.

“Company car fleets are on the right journey,” says Pamma, and the next step is to start electrifying vans and light commercial vehicles. Concerns that need to be overcome are about expense, payload and range, as well as issues such as refrigeration, or drivers that take their vehicles home at night but don’t have domestic charging, she says.

A new Climate Group initiative, EV100+, could move this forward. The commitment is focused on medium- and heavy-duty vehicles, and the five launch members are already transitioning over 90,000 vehicles to zero emission by 2040, across Europe, China and India.

Elsewhere, in January BP pulse opened eight dedicated electric truck charging stations at key sites in Germany along the Rhine-Alpine corridor, one of Europe’s busiest road freight routes. The chargers are capable of adding up to 200km (124 miles) of range in just 45 minutes.

“Companies need to be looking at what their fleet profile looks like: which of the vehicles can they choose now, and which might they have to do later,” advises Pamma.

Mark Hillsdon is a Manchester-based freelance writer who writes on business and sustainability for The Ethical Corporation, The Guardian, and a range of nature-based titles.