The fleet sector is facing a myriad of challenges. Pricing volatility, raw material cost increases, material shortages — the list is endless. These stresses are affecting the sector at a time when it is undergoing significant developments with the emergence of zero emission vehicle technologies and mobility solutions.
These factors make the job of procuring fleet assets and services more challenging, especially for public bodies who are responsible for delivering services to the public. How long will the price be valid? What is the delivery lead time? How will VED affect the vehicle in future years? Are the Government’s grants changing? What are the whole-life costings? Those responsible for sourcing vehicles have a lot to consider.
TPPL provide a range of procurement solutions and services available to the public sector, supporting organisations to help them reach efficient, value for money outcomes whilst procuring fleet assets, services, and relatable applications, such as grounds care equipment, plant machinery and handheld tools.
We have two solutions available to procure charging infrastructure in support of electric vehicles (EVs) and are the first to offer a compliant procurement solution for hydrogen infrastructure available to all public sector organisations.
There is pressure, and a real desire, to begin making the switch to EVs – but there are various barriers in the way.
Purchase prices of EVs are higher than petrol and diesel. That makes it almost impossible to justify awarding a tender to an EV over an ICE vehicle using traditional evaluation criteria. Range anxiety is still an important concern. Then there’s availability. Not every vehicle has a viable electric alternative. Finally, there’s the cost and time of putting infrastructure in place.
Underlying all of this is the fact that councils can’t simply choose to go electric if it’s completely cost prohibitive and unsuitable. They have a duty, not just to the climate, but to spend public money responsibly and efficiently.
We are seeing range and availability slowly improving. The EV market is in better shape than it was three or four years ago. And TPPL has solutions in place, such as our charging point DPS, to address the problem of infrastructure.
So, the final piece of the puzzle for us was a way of helping our members’ deal with the problem of high purchase prices, through developing an operational lifetime cost calculator.
Whole life cost calculators evaluate purchase costs, energy versus fuel costs, service maintenance and repair (SMR) costs and residual values. Our model has been developed using the factors that Government suggest we consider in these kinds of policy appraisals. It is not just our opinion of what should be included or how each factor should be weighted. TPPL haven’t come up with the inputs, though we have compiled them and produced the model based on these inputs.
Our model evaluates purchase costs, energy versus fuel costs, and SMR costs. In addition to these core criteria, we have incorporated Government guided increasing costs for CO2 emissions based on the central estimates for carbon costs.
Pollutant emissions including NOx, particulate matter, and hydrocarbon emission damage costs are included in the model, based on the urbanization profile of the members’ location. Urban areas incur greater damage costs due to the increased consequence of poor air quality in densely populated locations.
Finally, we apply recommended adjustments for inflation and for the Social Time Preference Rate. For health-related costs, such as damage costs from pollution emissions, there’s also a built-in assumption that willingness to pay for healthcare costs increases over time – again this is a Government recommendation for policy appraisals.
To date, a number of examples produced using the calculator demonstrate EV whole life costs can reach parity with comparable ICE vehicles when applying typical municipal usage parameters and retention periods.
We are also now beginning to see more significant development of the hydrogen infrastructure economy, which, if supported positively by the Government, will provide a host of new opportunities for fleets.
But EVs are a viable option still. As always there is no ‘silver bullet’ and room for new technology more suited to specific user requirements exists. So let’s get behind it and put the infrastructure in place!