The high price of going electric for smaller operators

Electric has been widely adopted as the viable solution for most light commercial vehicles (LCVs) uses. While plug-in vans only accounted for 3.6% of all new van registrations in 2021, the Society of Motor Manufacturers and Traders (SMMT) predicts that electric van sales are likely to double to 6.4% of the new van market by the end of this year.

Smaller operators, however, may still struggle with the cost of transitioning their van fleets to electric. While there are government grants to support the uptake of new battery-electric vans, some SMEs may face challenges with the cost of purchasing these vehicles second-hand, as there is currently no government scheme in place to subsidise this.

“As the market grows, and the nation heads further towards fossil fuel phase-out deadlines, consideration will need to be given to offering further support for SMEs if prices remain a key barrier to uptake,” said Denise Beedell, Public Policy Manager, Logistics UK.

Recent increases in energy prices will also impact the transition to electric vehicles. While electric vehicles are expensive to buy compared to their petrol or diesel equivalent, the acquisition costs are partly offset by their lower running costs.  However, electricity prices for businesses will be up to 24% higher than they were in the final quarter of 2021, and may rise further as the Energy Bill Relief Scheme ends in March 2023.

“Logistics operators typically operate on low profit margins,” Beedell said, “and, with the increased energy costs, the business case for investing in new electric vans has – sadly – become less clear.”

*www.logistics.org.uk/van

Published On: 06/10/2022 15:51:25

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