What to consider when procuring an electric fleet?

More and more organisations are electrifying their fleet in pursuit of sustainability. The changing mobility landscape, the growing number of suppliers and the ever-wider vehicle choice bring new challenges and pitfalls. What are the consequences for your procurement strategy, how do you minimise risks during supplier selection, and which best practices can you learn from?

Fleet purchases used to be relatively simple, because brands and models with combustion engines were largely comparable in technical specifications. Today you must examine and compare all specifications carefully to select vehicles fit for purpose. That starts with understanding and specifying the precise minimum requirements for your electric fleet, such as range and charging speed. For light commercial vehicles, add considerations such as maximum payload and whether a tow bar can be fitted, which is not possible on every electric vehicle. During procurement, the emphasis thus shifts to functionality rather than price.

It is, but instead of looking at price alone, it is important to calculate the integral costs of the electric fleet. Components such as investment value, depreciation, tyres, energy, maintenance, repairs and insurance have a substantially different impact on the total cost of ownership of electric cars compared to combustion cars.

Tenders have traditionally been a good way for public-sector organisations and some large companies to negotiate significant volume discounts, either directly from manufacturers or through selective vehicle contracts with leasing companies. For electric vehicles, however, much lower discounts are offered. With EV technology improving rapidly, it can be wiser to opt for the flexibility of a lease framework agreement rather than committing to a brand or model that may quickly become outdated.

By working with a leasing company, government organisations can moreover benefit from investment subsidies they would otherwise be excluded from. Note: EV rates differ greatly between leasing companies, so invest time in finding the right partner.

It is admirable that organisations want to electrify their fleet in support of their sustainability goals, but these need not be pursued dogmatically. First and foremost, the fleet must functionally support business operations. That may mean accepting that electrifying 100% of the fleet within the desired timeframe is not possible, especially for commercial vehicles.

One solution is to segment the fleet based on specific requirements, then assess which segments can be electrified now and which you want to reassess at regular intervals. After all, the technology evolves continuously.

The EV market is so dynamic that it can be hard to keep up with what leasing companies and manufacturers offer. Fleet procurement requires far more preparation than before, and those who continue to tender must ask new and different questions to obtain the right information for cost analysis and risk assessment. Most organisations lack the internal capacity for this complex and time-consuming process. An external specialist then provides the necessary expertise and helps you make the right decisions based on your situation.

Molthoff Fleetmanagement advises and supports the procurement of electric vehicles: from insight into your current needs and future options to full tender support. We also guide the transition from a traditional car policy to alternative and sustainable forms of corporate mobility, from mobility policy to implementation.