Latest Public Sector News

23.06.17

Managing grey fleet: the key to unlock electric vehicle use?

Source: PSE Jun/Jul 17

Ian Featherstone, fleet advice manager at the Energy Saving Trust (EST), explains why managing the grey fleet can help determine if electric vehicles (EVs) can be used cost-effectively as pool cars.

EST has worked with fleets for many years identifying where energy, emissions and cost can be stripped out to increase efficiency and save money. Our reviews can cover a wide range of a fleet’s operation, including company car and van policy, mileage and fuel reduction strategies and grey fleet. Identifying opportunities for the cost-effective use of ultra-low emission vehicles (ULEVs) – vehicles with tailpipe emissions not exceeding 75g/km CO2 and with a minimum of 10 miles zero emission driving range – has become a day-to-day part of our work.  

Grey fleet – business mileage covered in an employee’s own vehicle – is integral to service delivery in many organisations. While its management can be difficult, the financial savings and reduction in risk by doing so make the effort involved worthwhile, if not essential. 

The key to effective fleet management is data collection and analysis. Once available, data can be used to address many aspects of vehicle management, allowing cost and carbon savings to be realised.

Validating grey fleet journeys and mileage 

We find that organisations in the public sector often want to reduce grey fleet costs and use EVs, so what data are needed and where should they start? Mileage reporting and the checks to ensure that both drivers and their cars are roadworthy can be less rigorous than is ideal in many organisations. The first task, therefore, is to collate data on the drivers and the vehicles they are using and put in place a mechanism whereby these core data can be maintained. Next, it’s necessary to understand the journeys being made, why they are made, their origin and destination, how long they take and their duration. When this detail is understood the most appropriate, cost-effective alternatives can be put in place. 

This is achievable in-house, but organisations will often engage a mileage management specialist or another supplier offering this service. The benefits are immediately obvious – once drivers are logging journey start and end points either online or via phone apps, mileage claims tend to shrink, potentially for a number of reasons which could include previously estimating journey mileage and rounding up. Putting some form of mileage capture into place will usually reduce claims and costs by 10% and often more. 

Having validated grey fleet journeys and mileage, what’s next? Let’s consider some grey fleet statistics: the average grey fleet car is 8.2 years old, 0.3 of a year older than the average car in use; just 9% have the highest (5) Euro NCAP rating and average emissions are 152g/km CO2, compared with 120.1g/km for the average new car registered in 2016 (SMMT). It therefore  makes sense to substitute grey fleet use where possible with cleaner, safer vehicles or alternative transport options. 

A hybrid solution, informed by the data available and communicated via a travel hierarchy, almost always works best, from conference calls where appropriate to the use of public transport where practical, and hire cars for longer journeys where not. For users travelling higher mileages, lease cars, perhaps as part of a salary sacrifice arrangement, can be an appropriate solution with well-managed grey fleet travel plugging any gaps not covered by the alternatives. 

Determining whether EVs can be used as pool cars 

The data allowing staff mobility to become safer and more sustainable can also inform the cost-effective use of ULEVs. Taking pool cars as an example, they can be a great way of providing staff transport or they can be a rapidly depreciating, underused problem. An understanding of grey fleet use, particularly where the travel is generated from, allows appropriate pool cars to be put in the right locations and policies amended to ensure they are used. 

Understanding the nature of trips grey fleet drivers undertake will help determine if EVs can be used cost-effectively as pool cars. When it comes to EVs, the higher the mileage that can be achieved, the greater the fuel savings – take £100 saving per 1,000 miles driven as a starting point. It’s worth considering that pool cars can now be provided on a car club model, including EVs or plug-in hybrids, solving booking, vehicle access and maintenance issues and possibly even providing a service to the local community outside working hours. 

There will be a requirement for charge points and driver training, but the organisation benefits through understanding these aspects of operation, and equipped with this knowledge managers will be able to identify wider opportunities for the use of ULEVs across the organisation. Drivers will become more familiar with the vehicles too and may choose a ULEV as their next personal vehicle, potentially improving the emissions profile of the remaining grey fleet. And it doesn’t end with pool cars, ULEVs are the most cost-effective choice for salary sacrifice schemes and are not impacted by the recent changes to legislation in this sector.

FOR MORE INFORMATION

W: www.energysavingtrust.org.uk

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