Are electric vans worth it?
As a tradesperson, your van can be the lifeblood of your business, getting you between jobs, sometimes doubling as a break room, office, and more. So, the van you choose not only has an initial cost, but is a long term, strategic investment for your business.
And with electric vehicles now an option, how do you know if it’s the right choice for you, your trade or even your fleet? The decision to switch to electric isn’t just about cutting down on emissions; it’s also about practicality, cost-effectiveness, and long-term sustainability.
But is there a hidden cost to an electric van? We’re exploring all things EV to help you decide if they’re really worth it!
Why should I consider an electric van?
Electric and hybrid vans have grown in popularity among business owners, as prices have become more affordable. There variety of makes and models has expanded, with manufacturers producing electric versions of their flagship van models, such as the Ford E-Transit or the Renault Kangoo.
What’s more, the number of areas implementing congestion charge zones is growing, and these boundaries are expanding. So, for traders around areas such as Bristol and Greater London, an electric van might work out cheaper in the long run, when you consider the daily charges of serving clients in these communities.
Fully electric vans are designed with shorter, urban routes in mind, such as delivery services. The major advantages are the low running costs and of course, the positive impact on local air quality. A few larger electric vans have been released in recent years, so the need for a lot of storage on-board doesn’t mean you can’t go fully electric.
EV grants and incentives
As the Government pushes towards Net Zero goals, there are several financial incentives for businesses to help more make the switch to electric. For a business owner, this could offer a serious saving. At a glance, these include
Reduced road tax rates, depending on whether you drive a fully electric or hybrid vehicle
Congestion charge exemptions
Plugin grants towards the cost of a select group of models
Cash grants for charger installations
Capital allowances
Fuel duty savings
What are the downsides of Electric Vans?
There are, however, drawbacks to driving an electric van. For most drivers, the range is the biggest anxiety, i.e. how long can you go for between charges. The average electric van range isn’t quite the same as electric cars, and could be a blocker if you need to travel long distances.
Some of the overall top rated electric vans are the Renault Kangoo ZE, at 186 miles and the Ford E-Transit offering 196 miles, but the standard is currently around 90-120 miles. The alternative option is a hybrid, which has both an electric motor and a petrol combustion engine. Then you can switch to petrol if you run out of charge.
How long do Electric Vans take to charge?
The charging times for electric vans can vary between models, and the charging method. For example, a Volkswagen eTransporter battery will charge from 0% to 100% in around 5.5hrs using a 7.2kW home wall box. However, a public DC rapid charging point will charge the battery to 80% in just 45 minutes. So, if you are concerned, make sure you check with individual manufacturers about specific makes and models.
What are the running costs of electric and hybrid vans?
If you are considering an electric or hybrid van, you’ll need to consider the following:
Upfront purchase costs/monthly leasing costs
The cost of installing charging points at home/your place of work
Ongoing cost of electricity for charging
Maintenance costs such as repairs, MOTs and more
Your insurance premium
While low emission vans can be more expensive, particularly to set up with charging accessories, they could save you money in the long run, as electricity is a cheaper fuel source than petrol or diesel.
However, the maintenance and insurance premiums for electric vans specifically may detract from any fuel cost saving. There’s plenty of debate out there about whether EVs are actually more reliable or cheaper to maintain. In theory, EVs have fewer moving parts than a traditional petrol engine, so should be ‘simpler’ to fix, or at the very least, have less than can go wrong.
But in practise, this isn’t necessarily happening. In fact, with more time spent in workshops and a lack of mechanics trained to fix EVs, both factors are contributing to higher repair costs. And this is having an effect on insurance premiums.
Howden UK and Ireland CEO Carl Shuker explained: “You’ve got length of repair times going up, you’ve got the cost of the component parts going up, and you probably see more EVs written off because residual values are particularly low at the moment.”
Accidental damage claims for EVs are on average 35% more costly than similar ones for combustion vehicles. The industry has clearly struggled with the aftershocks of the supply-chain issues sparked by the pandemic and the Ukraine war. For insurers, there’s little they can do to reduce the cost of EV insurance, money because premiums are based on the cost and frequency of claims.
What’s happening to the EV market?
After an initial buzz, the EV market is facing challenges. Electric van sales failed to take the big step forward that will be required if the industry is to easily hit the targets set out in the zero-emissions vehicle mandate, with a 12.3% drop in sales compared to February 2023 and an overall market share of just 4.7%.
And even though the overall ban on pure petrol and diesel vehicles was delayed from 2030 to 2035, the government has stuck by plans to bring in a target each year from 2024. Electric vans will have to account for 10% of manufacturers’ sales in 2024, with this figure rising each year. The overall market share for battery electric vehicles in 2023 to date is currently at 5.4%, so brands have some way to go.
Save on your insurance, not the service
There’s a lot to weigh up here. It’s a crucial decision to make for you and your business, but it can be overwhelming to wade through all the pros and cons of different vans.
Remember, you can get an insurance quote before you make a decision to purchase a vehicle. Our commercial insurance experts would be more than happy to talk through all your options and the considerations you need to be aware of.
To get insightful, expert advice, simply pop into your nearest commercial branch, or give the team a call.
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Sources: Go Small Business, What Car?, NimbleFins, Bloomberg
