Now is the Time for European Fleets to Start Planning Electric Vehicle Acquisitions

First in a series on global fleet electric vehicle prospects

By Mark Boada, Senior Editor

As some industry observers predicted, the time for electric vehicles (call them “EVs”) to become a significant component of fleets is rushing toward us faster than anyone anticipated just a few years ago. This is particularly true in Europe, where a number of initiatives, both public and private, are bringing the future of the all-electric fleet closer to today.

There could be no better indication that fleets on the continent should be preparing now to dive into EVs than the announcement last month that LeasePlan N.V. has launched a pilot electric vehicle leasing program for large fleets in 10 countries. The program was slated to be available beginning this month in Belgium, France, Germany, the Netherlands, Norway, Portugal and the U.K., and to be expanded to include Italy, Spain and Sweden early next year.

But LeasePlan plans go farther than merely facilitating fleet EV acquisitions. The company said it will help its customers create charging stations at their offices and employees’ homes, and will begin to provide EVs for its own employee fleet, the first fleet management company (FMC) to do so. The fleet management business being so highly competitive, you can expect other big FMCs in Europe to follow LeasePlan’s example in 2018.

Another major development was the publication of an article in the journal Applied Energy by researchers at the U.K.’s University of Leeds claiming that EVs – the exclusively electric kind– are now the cheapest kind to own in the U.S., the U.K. and Japan, with a total cost of ownership below that of gasoline- or diesel-powered vehicles.

One point to note: the study’s findings took into account generous government subsidies for all-electric vehicles, and in the U.S. they’re limited to the first 200,000 vehicles sold. Such subsidies, however, are offered in other countries, notably Norway, France, Germany, Belgium and the Netherlands, not incidentally the country where LeasePlan is headquartered.

These developments are only the latest in a string of events and conditions that make LeasePlan’s announcement so timely:

According to the European Alternative Fuel Observatory’s latest count, there are more than 118,000 EV charging stations in 32 countries across the continent – up from just 41,000 in 2014. Of the current number, however, nearly 90 percent are the slow-charging variety, which take as long as 6 to 7 hours to recharge a short-range EV battery fully and much longer for vehicles with a range of more than 100 miles.
In 2016, four major auto manufacturers created Ionity, a joint venture whose goal is to create a “super-fast” network of 400 stations for electric vehicles across 18 countries. The new breed of charger can fully recharge an EV in as little as 30 minutes, and Ionity plans to place them all within 75 miles of each other.
Meanwhile, a second high-speed EV charging partnership between E.On, a German utility services company, and Clever, a Danish firm that makes charging stations, are planning a European “North-South” supercharging network, with 180 ultra-fast chargers in seven countries, stretching from Norway to Italy by 2020.
Oil giant Royal Dutch Shell announced last month that it is joining the Ionity project with plans to create 400 high-power charging stations at its gasoline fuel stops across Europe by 2020, with 20 to open by the end of this month in Austria, Germany and Norway. Each station will have the capacity of 350 kilowatts, compared to the current industry standard of 50 kW, which will make recharging significantly faster, adding to the market appeal of EVs.
By last August, some 140 U.K. firms pledged to join the government’s “Go Low” program by converting at least 5 percent of their fleets to EVs. The pledgers include Microsoft, Ovo Energy, Santander Bank, Hewlett Packard, Unilever, IKEA, delivery giant DHL, and Chinese web retailer Baidu.

Sales of all types of electric vehicles are surging in Europe, up by 39% through September of this year. The carmakers behind Ionity are among the biggest in the world: BMW, Mercedes, Volkswagen-Porsche-Audi and Ford, all of which are making major investments in all-electric vehicles.

Mercedes, for example, said it intends to offer an electrified version of every model it sells by 2022. BMW and Volkswagen each has announced plans to expand the number of its electric vehicles models by 2025, with 12 new models for BMW and 50 for VW. Meanwhile, Volvo plans to offer nothing but cars with some degree of electric propulsion by 2019. Beyond these Ionity backers, Renault, Nissan, Tesla and Mitsubishi are among the leaders in European EV sales.

So, it appears that electric vehicles are overcoming key hurdles for fleets in Europe, including total cost of ownership, a limited charging infrastructure and a lack of leasing programs. Fleet managers need to start putting a fine pencil to their plans to put more of these kinds of vehicles into operation in the very near future.

In the words of LeasePlan CEO Tex Gunning: “Electric vehicles are what’s next.”

Read previous columns in Globally Speaking Archives

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