Switching to electric driving: pitfalls; considerations; challenges and sustainable profits

For many companies, their vehicle fleet is one of their biggest environmental burdens – and, at the same time, a major cost driver. The switch to electric vehicles (EVs) offers enormous opportunities: lower CO2 emissions, lower fuel costs in the long run, and a better ESG profile. But the path from combustion engine to electric drive is full of pitfalls that can quickly become expensive if not planned carefully.

In this article, we outline the most important considerations – and the typical mistakes – that companies make when switching to electric vehicles.

1. Underestimating the total cost of ownership (TCO)

Many companies focus primarily on the purchase price of EVs, which is often higher than that of comparable combustion engine vehicles. But the real decision should be based on the total cost of ownership (TCO): purchase price, financing costs, electricity costs, maintenance, insurance, depreciation, and any subsidies or tax benefits.

In many cases, EVs are more cost-effective over their total lifetime – but only if the calculation is done correctly. Companies that only look at the purchase price often make the wrong decision.

2. Ignoring charging infrastructure

The switch to EVs is not just a question of vehicles – it also requires a comprehensive charging infrastructure. Companies need to plan where their vehicles will be charged: at the company's own premises, at employees' homes, or at public charging stations.

Installing charging stations at the company's premises can be expensive and time-consuming. Charging at employees' homes requires clear policies and reimbursement mechanisms. Public charging infrastructure varies greatly in availability and cost.

3. Neglecting energy costs

Electricity costs can vary significantly depending on the time of day, the charging method, and the energy tariff. Companies that don't actively manage their electricity procurement risk paying much more than necessary for charging their fleet.

ERA Group's energy experts can help companies to optimise their electricity procurement and reduce their energy costs – whether for fleet charging or for the company's overall energy consumption.

4. Failing to consider the full supply chain impact

The switch to EVs also affects the supply chain. Companies that use their own vehicles for deliveries or service calls need to consider the range, charging time, and payload capacity of EVs. In some cases, EVs may not be suitable for all use cases – at least not yet.

5. Overlooking employee needs and concerns

Employees who rely on company vehicles need to be involved in the transition to EVs from the start. Their concerns about range, charging, and the practicalities of using EVs in their daily work need to be taken seriously and addressed.

ERA Group can help companies to manage the transition to EVs in a way that is cost-effective, sustainable, and considerate of employees' needs. Our experts have deep knowledge of the EV market and can help companies to make the right decisions at every stage of the process.