Are Electric Fleets Cheaper To Run?

If there’s two things we can be fairly certain about when it comes to electric and other ultra-low emission vehicle (ULEV) fleets it’s this: they are kinder to the planet and they are going to happen. With demands for clean air becoming ever more pressing, diesel’s popularity dropping like a hot stone and manufacturers from Audi to Tesla pouring billions into vehicle development, it’s only a matter of time before company fleet drivers are plugging in rather than filling up.

Are Electric Fleets Cheaper To Run?

One important question remains relatively unexplored, however, and that is are electric fleets not only cleaner but are they cheaper too? In this new blog from Quickfleetinsurance, the cheap fleet insurance specialists, we look at the evidence and see if doing good by the environment could also be good for your business’s bottom line.

Cost Of Vehicles

By far the largest single cost involved in running a fleet is the cost of the vehicles themselves. Whether you have 2 vehicles or 200, the cost of these is going to heavily outweigh other costs such as fleet insurance or fuel. At the time of writing electric vehicles are more expensive. Lease or buy the costs of these innovative – and let’s face it, relatively rare vehicles – are higher. An electric Ford Focus lists at £31,625 whereas the Focus 2.0 TDCi Focus Titanium Powershift Auto comes in at just £26,630. That’s a chunk of extra cash to have to find. Electric vehicles are set to fall in price as the technology becomes more advanced and production levels rise, but for anyone looking to go green at the moment is going to have to swallow this bitter financial pill.

Running Costs

The cost of running an electric vehicle is something that advocates of them have always been quick to point out and there undoubtedly big savings to be had. Running costs of 2-4p per mile compare very favourably with the 10-12p per mile associated with traditional fuels. These costs per mile will only decrease further as battery technology improves and they become more efficient and enjoy greater range. Also, with traditional fuel costs rising ever higher, so plugging in rather than filling up will soon make a huge amount of economic sense.

Electric cars are also meant to be more reliable and, as they are relatively simply machines mechanically speaking, they are quicker to fix when they do go wrong. This is all good news for fleet owners who are keen to keep their fleets where they belong; on the road.

Costs For Drivers

The decision as to whether to take a company vehicle by an employee is often one based on balancing the benefit with the benefit in kind (BIK) tax implications of having one. Recent HMRC BIK changes have made this decision much harder of late and this could have serious implications for the industry as a whole.

Electric vehicles are real winners in this area. Taking our Focus as an example, the Focus Electric will cost a 20% taxpayer £569 annually as opposed to £1,332 for the Titanium Powershift Auto. For 40% taxpayers these figures rise to £1,139 and £2,663 respectively. These obviously represent significant savings, especially over a typical three-year deal. And the savings don’t end there. ULEVs are also road tax exempt, you don't have to pay the London Congestion Charge and you can also benefit from free parking in many pay and display spots as councils seek to encourage ULEV usage.


The one thing that no business has enough of is time and for drivers of traditionally powered cars, vans and trucks, they could be about to lose a whole lot more of it. Why? Because of the introduction of Clean Air Zones (CAZs). Major UK cities including London, Southampton, Bristol and Nottingham are all planning Clean Air Zones in order to bring down pollution levels. Entering these zones in a high-polluting vehicle – especially an older diesel – will be at best expensive, with taxis facing daily charges of £12.50 and HGVs £100, and at worst impossible. Oxford is just one city that is considering an outright ban on non ULEVs in the city centre which would make visiting clients or delivering goods using traditional vehicles impossible. Clean Air Zones are soon going to be a widespread reality with many other cities following Glasgow’s lead, and so from a time and money perspective, fleets need to start thinking about going green in order to deal with them. Worryingly, a recent report showed that 20% of fleets were unprepared for them and a further 34% were simply going to pay rather than change. Money down the drain?

Fleet Insurance Costs

Insurance costs for all vehicles have risen over the past couple of years. Changes to the Ogden Rate and Insurance Premium Tax (IPT) have pushed up prices for all. Insuring electric vehicles has been something that the industry has been forced into taking seriously as their popularity continues to grow. From an insurance perspective there is potentially some good news. Owing to their greater levels of reliability and their (relative) ease of fixing electric fleet insurance quotes should be lower.

So, Are Electric Fleets Cheaper To Run?

The answer to this question is time dependent. If you are looking at changing now, then between the extra cost of the vehicles and the costs associated with having to closely monitor the mileage they do owing to a lack of fast charging points, then no. While electrically powered modes of transport remain in the experimental stages – which they realistically will until the mid-2020s – they will be more expensive.

However, if we look to the mid-long term they are not only destined to become a cheaper option, but they will almost certainly be the only option. Governments worldwide are announcing end dates for fossil fuel powered engines – the UK’s being 2040 – and as the technology advances we can look forward to a new era of cheap, clean fleets, which has to be good news for all.

Like Some More Help?

If you have any questions on insuring your fleet of company cars, or would like to see if we can save you some money on your insurance, get in contact today by calling us on 01869 389 421, or if you'd like to get a cheap fleet insurance quote then please click here now.

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