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Analysis: Is small EV-EN more beautiful for electric cars?

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A proliferation of small electric vehicles has come to the new car market in 2020, offering fleets even more affordable ways to switch to electric

 

Amid the chaos of 2020, it may have gone unnoticed that the small electric car is now a big deal. Less than 12 months ago, fleets looking for small electric models were pretty much limited to the Renault Zoe, but this year we’ve seen the arrival of the Honda e and Mini Electric at the premium end of the scale, as well as the forthcoming new electric-only Fiat 500. The Peugeot e-208 and Vauxhall Corsa-e both arrived during the first lockdown period, around the same time as Renault revised its trailblazing Zoe, and Seat’s Mii went all-electric alongside the electric version of the VW Up.

So are these new small EVs suitable for a fleet application, and are they appealing to business operators and drivers?

Renault fleet boss Mark Dickens says: “On the corporate side, we’re seeing increased demand from those companies that are signed up to EV100 [a climate group pledging to bring forward adoption of EVs], and within that you question where does a B-segment vehicle sit in a company car environment? It’s because they have downsized out of C-segment into B-segment.”Small EV-EN and Fleet- Image 2

Honda has just landed a big fleet deal for its new e EV, with 30 cars going to Chesterfield-based house builder Avant Homes (pictured, above). The brand’s fleet engagement section manager, Jacqueline Rowe, says: “Fleets are interested in the smaller electric cars such as the Honda e, and as a result Honda is being invited to a large number of tenders.

“I think there are three main avenues for this to progress,” she continues. “Firstly, policies are changing within businesses wanting to be green. Secondly, perception of the electric vehicle is changing as the true future, rather than a concept on the distant horizon. Finally, the BiK saving to a driver is a big reason for change.”

As a result, despite Honda’s e not being the most fleet-orientated of products, the brand is still expecting up to 30% of its volume to be corporate.

Vauxhall’s Corsa-e was the brand’s first full electric model when it launched earlier this year, and the company is finding a fairly even split in terms of fleet customer interest in its electric car versus the traditional petrol and diesel alternatives.

“In the public sector we are seeing particularly strong interest, as the authorities strive towards their goal of being ‘carbon-neutral’ in major conurbations by 2025,” says Vauxhall fleet operations director Mark Pinkney.

“We have also had major sales success with significant blue-chip businesses, including BT and Centrica. Fleets who have job-specific needs, in terms of general location of use of a vehicle, are engaging with our strategy of offering conventional engines and battery electric power in the same bodystyle. This allows them to be adopters of BEV in appropriate areas without applying a disjointed vehicle policy across their business.”

Peugeot’s UK managing director, David Peel, tells Company Car Today: “The demand is very much public sector, we’ve done 200 e-208s to one public sector customer that I won’t name, so there is really growing demand in the public sector and salary sacrifice for electric product.

“We are working carefully with major customers to integrate onto price lists and do it responsibly, because we don’t want to flood these cars into the marketplace and damage the residual value.”

Renault has also seen big interest in the Zoe from local government, with Dickens listing off 140 cars to South Lanarkshire Council, as well as others to Islington and Aberdeen councils, while he claimed up to 400 Zoes have gone into the NHS.

“The public sector is really taking off on electric,” he says. And the Zoe is flying in 2020, with Renault claiming that it has enjoyed a four-fold increase in orders compared to 2019, which itself was a five-fold increase on the previous year.

The electric superminis fall into two very distinct camps, with the more premium and fashionable models (the Mini Electric and Honda e specifically) offering lower range for the same price as more volume-brand models such as the Peugeot e-208, Renault Zoe and Vauxhall Corsa-e that, for the same money, can offer more range (see table, above), but less cachet.

Rob East 2020Mini fleet boss Rob East says: “The battery range figure is, of course, an important consideration but for customers, particularly with charging opportunities at both home and work, and with increasing infrastructure, it doesn’t seem to be the critical factor.

“If I look at our end-user customers, many have increased charging in the office environment and adapted to enable charging at home. What’s interesting is that drivers and fleet managers are now really knowledgeable about the true range and how you can also optimise it using modern EV technology.”

Vauxhall’s Pinkney says the brand finds that when companies are “engaged in a realistic use review, the range sensitivity erodes”, pointing to the fact that vehicles covering 20,000 miles a year would average less than 56 miles per day. He also mentions that cars such as the Corsa can be rapid-charged to 80% of capacity from empty in half an hour, so “the range issue evaporates”.

Peugeot is finding from customers that a range of 200 miles is proving “more than sufficient for both cars and vans”, according to corporate sales manager Graham Smales, especially given the pandemic-induced reduction in travel.

“The total cost of ownership of a small electric car also makes them a compelling proposition, he continues. “Reduced fuel costs, reduced service content, congestion charge exemption and much stronger current and projected residual values all make the TCO of electric cars more than competitive.”

Residual values expert Cap HPI’s senior values editor Chris Plumb says that initially the range figure is important, but that may change in time. “What we are seeing is that people will clamour for vehicles with a larger range because it gives them comfort, but as time goes on, people will buy a car that is priced at the point of their daily needs,” he tells Company Car Today.

“It all comes back to education with new and used cars, and getting the right vehicles for your needs.”

“If it can do 140 miles and you want a Mini then you will get a Mini,” he continues. “People that go for EVs have done research and understand what they are going for. Some may go for one with a larger range but may find they don’t do the miles and want a more premium one.”

So small electric cars are more than a little important to the corporate sector, and their importance will continue to grow as fleets evolve in the way they operate, making moves into EVs and smaller cars increasingly sensible alternatives.

PSA’s Graham Smales, concludes: “As communication in business settings continues to migrate online and telephone, with business mileage reduced, electric cars will provide a cost-effective solution for fleet managers and fleet users. Consequently, small EVs’ share of the true fleet market will only increase.”
Paul Barker