Like most small businesses, couriers are always looking to save money on the essentials. Be it by looking for cheap courier insurance, getting the most economic van or looking for the cheapest place to get diesel, there are many ways a courier can cut the costs of deliveries. One way that could significantly cut the cost of being a courier – one that may well have an impact of courier insurance quotes – is by driving an electric vehicle.
The Death Of Diesels?
Electric vehicles are the topic of much conversation in courier and fleet circles at the moment; in-part as a response to the backlash that has been unfurled against diesel vehicles. For decades’ couriers – as van drivers – have taken diesels for granted, and the rise of ‘lifestyle couriers’, many of whom have been encouraged to buy diesels owing to their environmental credentials, has seen the number of diesel vehicles on the UK’s roads soar.
Following the VW emissions scandal, diesel cars environmental credentials have been called into question. New research has shown that while CO2 emissions are lower for diesels, nitrogen dioxide, NO2, emissions are up to 400% higher. NO2 is thought to be extremely hazardous to public health and contributes to over 40,000 early deaths in the U.K. each year.
Such is the scale of the problem that in November 2016 the High Court ordered the Department for the Environment to come up with a new strategy for cutting fumes by the summer of 2017. A key component of this strategy – as hinted at by Phillip Hammond in the Budget – will be an unwelcome duty hikes on diesel vehicles. The current levels of U.K. fuel duty of 57.95 per litre is already hurting couriers and the changes in vehicle emissions duty (VED) that came in, in April 2017 are hardly going to help.
So, is now the time for couriers to look to electric vehicles? Let’s consider the pros and cons…
Electric Vans For Couriers – The Pros…
Leaving aside the obvious environmental benefits of reducing emissions by up 40% compared to standard cars, the main benefits of an electric fleet are financial. In terms of fuel costs savings, the numbers are frankly staggering. According to a recent British Vehicle Rental and Leasing Association report, electric cars cost between 2p and 4p a mile to charge (based on cars to doing journeys of around 100 miles per day). This compares to around 12p per mile for the equivalent diesel car – a saving that is surely music to a fleet manager’s ears if not that of the finance director. The F.D. will also find the fact that there are enhanced capital allowances available for electric fleet vehicles hugely attractive. These means that companies can relieve the cost of an electric car or van against taxable profits in the year of acquisition.
Courier Insurance Costs
Of course, electric cars do cost slightly more and that could sour of F.D.’s opinion of electric cars for the company’s fleet. However, with grants of up to £5,000 off the price of an electric car, 20% off the cost of an electric van, and grants available for up to 75% of the cost of installing a charge point, their mood could quickly return to sunny…
Electric Vans For Couriers – The Cons…
As with any new or emerging technology, there are downsides to electric vehicles from the perspective, the most obvious being:
- Vehicle range – The Nissan Leaf electric van will do up to 155 miles on a single charge. Not bad. And if you’re a courier who does lots of local jobs in a city or built-up urban area where charging points are plentiful then that could be enough. If, however, your deliveries take you into rural areas where charging points are few, then range could be a problem – especially given vans such as transits can get more than double that range on a single tank of diesel.
- Lack of vehicle choice – more and more manufacturers are bringing out electric vans, but the range isn’t as wide as for traditionally fuelled vehicles and couriers don’t have the same level of flexibility.
- Vehicle cost – at the moment they are more expensive to buy, and in the cut-throat world that is the courier industry, cost counts! Bloomberg New Energy Finance (BNEF) analysts predict that by 2022 electric vehicles will be cheaper, but that just means that those buying now are liable to see lower re-sale values when they come to sell.
- Refuelling times – as a courier speed counts and having to wait for hours to charge your vehicle isn’t really an option. Charging times will improve as will battery lives, but that will all take time…
Electric Vehicles For Couriers – Yes or No?
Between the savings on crucial areas of a courier’s business – fuel costs, courier insurance, congestion charges etc. – and the environmental benefits, electric vehicles for couriers do make a lot of sense. The main downsides remain range and charging times, but as these are simultaneously increasing and decreasing it does seem that the decision to go electric is one that is becoming increasingly easy to make.
If you’d like to discuss the insurance issues for electric vehicles for couriers, or would like to get a courier insurance quote – then please contact Coversure Redditch by calling us on (01527) 757 585 or you can email us by clicking here.