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Company cars: the growing demand for electric mobility

There is something new about company fleets vehicles. After years of experiments, attempts and, sometimes, sudden reverses, it seems that the time has come for the electric engines in company fleets: no longer seen as a curious exception in favor of “green” supporters – and useful, at least, for the sustainability/CSR budget – but as a long-term solution inspired by the post-pandemic concept of “new normal”.

Several factors are contributing to change the language of fleet managers towards hybrid and electric cars, which are in good part moving from a skeptical position to a new sense of urgency. Let’s see some of them.

The economic and political context. The conditionalities for the use of the funds granted by the Next Generation EU Program clearly indicate the goal of sustainability as a priority in defining the commitment plans that European countries must formulate in order to receive funds. Furthermore, we can certainly say that the most influential European countries have been led by “green leaderships”.

Car manufacturers. To prevent the hefty fines expected in 2021 in case of failure to meet emissions targets, all OEMs are cutting their diesel models range in favor of corresponding hybrid and electric models. For companies, continuing to maintain a diesel-based car list would soon mean running out of their reference car models, as is already happening in several realities.

Company fleets. Most of the major global companies have launched or are launching quite aggressive internal programs to reduce emissions: a typical goal is to halve CO2 emissions by 2025. In addition to this, on the one hand a steady reduction is expected of the price gap between hybrid/electric cars and traditional cars, on the other hand the residual value of diesel cars is constantly decreasing, causing growing remarketing problems both for companies and for leasing companies (depreciation of used cars and increase in leasing fees).

Company drivers. The appeal of ecological cars is significantly increasing according to the company assignees: a research carried out recently by GR ADVISORY through various surveys carried out on behalf of large global companies, has shown that a good number of company drivers not only see favorably the electric car, but even are ready to adopt it, having installed the charging system at home. The work organization based on smart working and work at home, which rapidly spread following the covid-19 emergency, has reduced the needs of travels by car, their frequency and their duration, making the hybrid and electric solution more easily implementable.

Private drivers. The progressive hiring of younger professionals belonging to generations Y and Z, more oriented towards green economy and “sharing” concept, is raising serious doubts on the future value of the company car as a benefit, as well as accelerating the green transition within fleets.

For all these reasons, the green fleet, which for many years was a chimera subject to endless discussions, has finally acquired a sense of urgency; obviously, between the desire and its accomplished realization it is necessary to complete a series of activities that guarantee the achievement of the objectives.

When we talk, for example, of hybrid cars we are referring to four different technological solutions with numerous pros and cons that must be evaluated on specific business needs: from the plug-in system – which guarantees great savings in fuel and emissions but requires a lot of discipline in constant recharging – to full hybrids – which without the need to recharge guarantee constant savings – to mild hybrids which, in some cases, even have higher emissions.

Other basic aspects are the quantification of the current average kilometres per year for each category of drivers, the actual cost of acquiring the vehicle and the incentives, both those of goverment to the the company and those that the company reserves to drivers, in the user-chooser realities, to convince them to choose a “green” vehicle.

Creating a business case that comes to predict the effects on total cost and emissions is absolutely necessary to avoid to fail, even if relying on theoretical data in forecasts is very limiting: in this case, telematics can offer an invaluable contribution in determining real emissions. compared to those declared, even if more realistic since the WLTP homologation was adopted.

In short, we can certainly say that this delicate and important moment of transition represents an opportunity to evaluate the current situation of each fleet and reflect on what objectives can be achieved, shifting the focus from the short term to the medium and long term.

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