Tips for managing Electric Vehicle (EV) costs
EV cost management
As we move into a new era of transportation, more and more businesses are pivoting their fleets to EVs.
The shift towards more sustainable vehicles brings many benefits, including reduced emissions and lower maintenance costs. However, it also presents new challenges, particularly around managing and forecasting the cost of charging these vehicles.
In this blog post, we aim to answer these burning questions and provide you with practical tips on how to account and forecast for EV charging costs.
What are some of the best ways to account and forecast for EV charging costs?
Managing EV charging costs involves understanding the factors that influence them. Key among these is the cost of electricity, which can vary based on location, time of day, and the provider.
For example, the energy price cap (the maximum price suppliers can charge for domestic electricity) is reviewed twice each year by Ofgem with changes to price caps announced in advance. If your drivers commonly use home charge points for their vehicles, this can give useful advanced warning of likely changes to their charging costs.
Other factors include the efficiency of your specific EV models and the distance they typically cover. By tracking these variables, you can establish a baseline cost and adjust your forecasts as necessary.
How can I calculate EV fuel cost per mile?
The calculation for the cost per mile of an EV is fairly straightforward:
1. Look up the how much electricity your vehicle consumes per mile, which is usually given in miles per kilowatt-hours (mi/kWh).
2. Divide this by the average cost of 1 kWh of electricity from your charging source (usually provided in pence/kWh).
However, the cost of electricity will vary (sometimes significantly) depending on the source, so you need to be careful about what you use for this figure. A home charge point used during ‘off-peak’ hours will usually cost significantly less than a public Rapid charge point.
What do I need to factor in?
Several factors come into play when managing and forecasting EV charging costs:
- Charging habits: As mentioned, electricity costs vary based on location, time of day, and the provider. Check your tariff (for workplace charge points), your employees’ tariff (for domestic charge points), or the average rates for the most likely public charge providers/locations your drivers will use.
- Vehicle efficiency: How many miles your EV can travel on a single kWh of electricity will significantly impact your cost per mile. Remember, a longer range/larger battery doesn't necessarily mean better economy.
- Usage patterns: The total mileage your fleet racks up, how frequently the vehicles are used, and how often they're charged can all influence the overall cost.
Understanding these variables and how they interact is the key to managing and forecasting your EV charging costs effectively.
Getting a handle on EV costs
As someone navigating the transition to electric vehicles in your business, a primary concern is to ensure the cost-effectiveness and efficiency of your fleet. Here are a few key considerations to keep in mind:
How Alphabet can support your journey
Get in touch
Embracing an electric fleet is not just about contributing to a greener future, but also about efficient and cost-effective operations.
We're committed to providing you with the best possible solutions, guidance, and support.
Reach out to Alphabet today on 01252 976 010 to learn how we can help devise a comprehensive charging strategy tailored to your business.
