What is the cost of owning a vehicle fleet?
For a company, the TCO (total cost of ownership) is an essential tool for assessing the overall cost of owning a vehicle or fleet throughout its life cycle. This indicator can also be used to define the operating costs of a fleet in several categories:
- fuel and electricity costs: these represent one of the most important items in the total cost of ownership for a small or medium-sized business. However, they depend on the type of fuel used by the vehicle, its average consumption, and the number of kilometers covered by the vehicle each year.
- repair and maintenance costs: these will depend on the vehicle's design, the quality of its components and its use. They include maintenance, out-of-warranty repairs, tires and insurance. Maintenance costs increase exponentially over the vehicle's lifetime, and can vary greatly over time. They represent about 20% of TCO.
- depreciation: the value of an asset diminishes over time as it wears and deteriorates. For a company, this represents the difference between the vehicle's purchase price and its projected resale price. It varies according to vehicle make, model, condition and mileage. It represents approximately 41% of the TCO.
- insurance: professional electric cars with a high insurance rating cost less to insure overall. What's more, taking out comprehensive insurance for the whole fleet rather than specific insurance for each vehicle can help you save money. Insurers offer specific insurance contracts for fleets of vehicles. However, before choosing an insurance policy, you need to understand the risks involved. For example, if you opt for an electric vehicle, you'll need to take out comprehensive insurance rather than traditional insurance.
TCO: how to calculate the cost of an electric vehicle?
We compared the TCO costs of the Mégane e-Techthe electric SUV from Renaultand its internal combustion equivalent. The aim of this study is to determine the financial advantages of an electric motor over a combustion engine.
We have chosen to consider the case of an executive who travels an average of 30,000 km per year on a full service lease. The TCO for a lease takes into account :
- rent or purchase price
- maintenance and tire costs
- insurance costs
- parking
- TVS
- ecological bonus or penalty
- fuel or refuelling costs
- amortization
Below is a detailed table of cost differences over five years:
| Car model | Renault Megane e-Tech | Renault Megane |
|---|---|---|
|
Purchase cost |
37 200 € |
29 300 € |
|
Government subsidies (Bonus écologique, prime à la conversion) |
6 500 € |
0 € |
|
Insurance cost / year |
840 € x 5 = 4 200 € |
840 € x 5 = 4 200 € |
|
Maintenance cost / year |
720 € x 5 = 3 600 € |
1080 € x 5 = 5 400 €
|
|
Cost of a terminal
|
1 200 € |
0 € |
|
Parking / year |
0 € |
720 € x 5 = 3 600 € |
|
TVS / year |
0 € |
290 € x 5 = 1 450 €
|
|
Fuel consumption and costs for 30,000 km |
816 € x 5 = 4 080 € |
3 600 € x 5 = 18 000 € |
|
TCO |
40 180 € |
61 950 € |
This TCO summary table shows that the electric car is more economical than the internal combustion car over a five-year period, with a purchase cost difference of €21,770. The difference will be even greater with leasing.
Tax benefits and assistance for electrifying your fleet
With the introduction of the LOM (the French law on mobility), companies are now required to have to have 10% low-emission vehicles in their in their vehicle fleets. This threshold will rise to 20% in 2024, 35% in 2027 to reach 50% in 2030.
Also read → The LOM law: what measures for transport mobility?
For a company, renewing its vehicle fleet is no longer a risk, thanks to the existing subsidies available for the acquisition of electric cars. They can even reduce the cost of electric cars by 15-25% compared with their combustion counterparts. Here are the various incentives available to small and medium-sized businesses:
Tax benefits
Exemption from company car tax
In France, companies that own or use private or multi-purpose vehicles are required to pay taxes on company vehicles (TVS). This obligation applies to all companies, without exception.
As a company that owns, uses or leases clean vehicles emitting less than 60 g/km of CO2, you benefit from an exemption from the new annual taxes on CO2 emissions and atmospheric pollutants, which replace the old TVS. This exemption is one of the elements in the TCO calculation.
Carte grise exempt from regional tax
Since 2020, unlike combustion-powered cars, electric cars have been exempt from the regional tax tax. A money-saving opportunity for your company.
Attention → The amount and percentage of exemption may vary from one region or department to another.
| Regions | Regional tax for 1 CV | Exemption percentage for clean vehicles |
|---|---|---|
|
Auvergne- Rhône-Alpes |
43 € |
100 % |
|
Burgundy-Franche-Comté |
51 € |
100% (0% as of July 1ᵉʳ) |
|
Brittany |
51 € (55 € from May 1ᵉʳ) |
50 (0% on May 1) |
|
Centre-Val de Loire |
49.80 € |
50 % |
|
Corsica |
27 € |
100 % |
|
Grand-Est |
48 € |
0 % |
|
Hauts-de-France |
34.5 € |
50 % |
|
Île-de-France |
46.15 € |
100 % |
|
New Aquitaine |
45 € |
0 % |
|
Occitanie |
44 € |
100% until February 28 |
|
Pays de la Loire |
51 € |
0 % |
|
Provence-Alpes-Côte d'Azur |
51.20 € |
100 % |
|
Guadeloupe |
41 € |
0 % |
|
French Guiana |
42.50 € |
0 % |
|
Meeting |
51 € |
0 % |
|
Martinique |
30 € |
0 % |
|
Mayotte |
30 € |
0 % |
|
Normandy |
35 € |
100 % |
Source : Service public
Beev recommends that you find out more beforehand on the prefecture's official website to find out which rules apply in your area. A simulator is also available on the portal to find out the price of a fiscal horse.
Incentive tax depreciation for company electric vehicles
There is a ceiling on the depreciation of electric vehicles. However, the depreciation threshold for an electric car is higher than for a combustion-powered vehicle.
For a Renault Zoé e-Tech emitting less than 20g CO2/km, the threshold is €30,000, while for an equivalent internal combustion vehicle it is €18,300.
Below is a table showing the maximum non-deductible depreciation for a passenger car purchased after 2022:
| CEILING | 2022 | 2023 |
|---|---|---|
|
30 000 € |
< 20 g de CO2/km |
< 20 g de CO2/km |
|
20 300 € |
From 20 g to 50 g |
From 20 g to 50 g |
|
18 300 € |
From 60 g to 135 g |
From 60 g to 130 g |
|
9 900 € |
> to 135 g |
> 130 g |
Damping of the electric battery
Unlike the cost of electric cars, which is not capped, the battery is not capped and can therefore be fully depreciated. However, it must be invoiced separately from the vehicle.
VAT tax deductibility
VAT on passenger vehicles is not recoverable. Whether you own a combustion or electric vehicle, you'll have to pay VAT when you buy it. If you drive a commercial vehicle, you should know that by switching to electric, the VAT on your vehicle is 100% deductible. However, VAT on electricity used to recharge an electric vehicle is subject to a tax deduction.
Government and regional aid
The ecological bonus
Thanks to the ecological bonus, you can benefit from €3,000 for the purchase of a passenger car and €4,000 for the purchase of a light commercial vehicle (LCV). This aid is available to companies leasing or purchasing an electric, hydrogen or plug-in hybrid vehicle. For a company wishing to purchase a Tesla Model 3the acquisition cost is €44,990. The bonus is €12,147.30 (27% of €44,990). Since this amount exceeds the €3,000 ceiling, the company will benefit from a €3,000 ecological bonus.
| Since 01/07/2021 | From 01/01/2023 | |
|---|---|---|
|
LEGAL ENTITY |
|
|
|
Véhicules électriques < 47 000 € |
4 000 € |
3 000 € |
|
Electric vehicles > €47,000 |
2000 € |
0 € |
The conversion bonus
The conversion bonus is a benefit which, as a reminder, can be combined with the ecological bonus. It encourages you to electrify your vehicles, with grants ranging from €6,000 for an electric car to €10,000 for an electric van.
This is in return for scrapping your old polluting cars with a Crit'Air 3 sticker or higher. However, certain conditions must be met to qualify for this assistance:
- Scrapped diesel vehicles must be registered before 01/01/2011 or before 01/01/2006 for an electric car.
- vehicles with a Crit'air 3 sticker or higher.
A company wishing to acquire a Tesla Model 3 for its fleet can benefit fromfinancial assistance of €2,500. Taking into account the ecological bonus, the electric vehicle costs €39,490 (44,990 - 3,000 - 2,500).
Key stages in converting your fleet to electric
Having analyzed the benefits of the transition to electric cars for a company, it's time to look at the steps you need to take to make it a success.
Audit your vehicle fleet
A fleet audit is a comprehensive assessment of all the vehicles used by a company. This tool makes it possible to analyze the costs associated with owning and maintaining these vehicles, as well as their use and environmental impact. To do this, the company needs to ask itself the right questions about its current fleet:
- daily mileage (forrange and recharging power),
- the number of passengers required,
- payload and useful volume.
This analysis highlights the strengths and weaknesses of the company's current fleet, and provides recommendations for improving fleet efficiency and reducing costs. The company will be able to better understand the costs, benefits and challenges associated with owning and using its vehicle fleet, and subsequently implement actions to optimize its management.
A fleet audit is a process that requires certain key points to be taken into account:
- fleet policy
- review fleet safety policy
- check health and safety policies
- vehicles
- review remarks on vehicle condition
- review vehicle defect forms
- review vehicle monitoring procedures
- review the projected vehicle replacement plan
- analyze fuel consumption
- drivers
- assess drivers
- inspect insurance agreements
- check operator license
- check operator license
- third party
- review third-party service providers
- fleet safety
- assess safety
- operational
- review inventory
As a small business, Beev recommends that you carry out an internal audit every year, and an external audit whenever your fleet undergoes major changes.
Drawing up your company's car policy
As a complement to the fleet audit, we recommend drawing up a detailed list of all the vehicles in use, including their respective makes, models and characteristics. Your company's car policy is a crucial element of its overall strategy. It enables you to determine the ideal organization of your fleet, assigning the most suitable vehicles to each employee. So you can easily decide whether an employee needs a company car or a service vehicle.
It enables you to determine the ideal organization of your fleet, by assigning the most suitable vehicles to each employee. So you can easily decide whether an employee needs a company car or a service vehicle.
With Beev, get a personalized car policy for your company, free of charge.
Choose the right financing solution
When a company wants to renew its vehicle fleet, it's important to consider its financing options:
- cash purchase on credit
- the long-term leasing (LONG-TERM LEASING)
- the rental with purchase option (LOA)
However, leasing is the most popular option for companies (about 82% of companies). In addition to allowing companies to change vehicles regularly, they can benefit from services (maintenance, insurance, assistance, etc.).
Installing charging stations
Under the French LOM law (loi d'orientation des mobilités), companies will be obliged to install a recharging infrastructure charging infrastructure. This will provide an additional service for your employees. As with the purchase of an electric car, as a company you are eligible for Advenir aid which aims to facilitate the installation of recharging infrastructure for businesses.
It offers fleets the opportunity to benefit from a bonus of up to €960,000 for a private parking lot. To receive the Advenir bonus, it is imperative to choose a certified installer and use a qualified electrician. IRVE (Infrastructure de Recharge pour Véhicules Électriques) qualified electrician.
Also read → The installation of charging stations in companies
| BENEFICIARY | TOTAL AID RATE | CEILING HT PER POINT |
|---|---|---|
|
Private parking for truck fleets |
50 % |
From €2,200 to €960,000 |
|
Private parking lot open to the public |
30 % |
From €1,000 to €2,700 |
|
Private parking lot open to the public (intermediate target) |
30 % |
1 000 € |
|
Fleets and employees of short-term rental companies |
20 % |
600 € |
Source : Advenir
To benefit from these subsidies, precise and rigorous administrative procedures are required. It is therefore advisable to call on the services of a specialized installer. This approach guarantees that the subsidy will be paid out correctly on completion of the project. One piece of good news is that the Advenir program, which was due to end in 2022, has been extended to the end of 2025.
Find out more → What are the certifications and deadlines for installing a recharging point in a company?
Monitor progress and evaluate the results of the transition to electric vehicles
Finally, it is important to monitor and evaluate the results of the transition to electric cars. We recommend that you keep track of costs, energy consumption and emissions. This will enable you to assess the benefits of the transition for your company and identify areas for improvement. This will enable you to assess its effectiveness over time.
For example, your electricity bill is a good indicator of whether your costs have fallen. We also advise you to monitor the company's fleet emissions to see if they have decreased since the vehicles were electrified. By keeping an eye on these metrics, you can identify areas where you can improve your transition to electric vehicles to maximize your benefits and minimize costs.
A big question for your company is how to manage its fleet of electric vehicles. Fortunately, there are tools available to help you manage it more effectively and make certain tasks easier. It's important to have efficient fleet management systems to monitor the performance of electric vehicles throughout their life cycle.
Fleet management applications help keep track of charging times and vehicle autonomy. The aim is to plan routes accordingly. Here is a non-exhaustive list of applications currently available on the market:
- Geotab
- FleetCarma
- Chargepointfleet
- Greenlots
They all have their own specific features, and can be adapted to suit your company's needs. Here is a summary of the advantages and disadvantages of each of them:
| ADVANTAGES | DISADVANTAGES | |
|---|---|---|
|
Geotab |
Real-time monitoring of vehicle performance via data sensors.
Detailed route analysis for better fleet planning.
Large data storage capacity.
Integration with a wide variety of electric vehicles.
Detailed and accurate performance reports.
|
High cost and complexity of implementation.
Advanced functionalities requiring training and expertise.
Unintuitive user interface.
|
|
Fleetcarma |
Provides precise data on each vehicle's energy consumption and CO2 emissions to optimize fleet utilization.
Reports can be customized to meet specific business needs.
Real-time geolocation functionality.
|
Limited to vehicles equipped with FleetCarma hardware.
Some important features are only available in premium packages.
High cost.
|
|
Chargepointfleet |
Compatible with various types of electric vehicle.
Provides detailed reports on fleet performance.
Easy to use and set up.
Advanced load management to avoid downtime and maximize vehicle
vehicle utilization.
Real-time battery condition monitoring.
Optimized route planning for greater efficiency.
|
Limited to vehicles equipped with Chargepoint charging stations.
High cost. |
|
Greenlots |
Cloud platform for easy remote fleet monitoring and management.
Customizable charging strategies to meet specific business needs.
Compatible with a wide variety of electric vehicles.
|
Complex user interface.
High cost.
|
In conclusion
The electric car represents an opportunity for companies wishing to switch to healthier modes of transport. Managing a fleet of electric vehicles is a key aspect of the transition for a company. For small and medium-sized businesses, it's important to weigh up the advantages and disadvantages before choosing a management tool that perfectly meets your needs.
The electric car offers significant economic and environmental benefits that deserve to be taken into account. By investing in a well-managed fleet of electric vehicles, a company can improve its image with customers and partners by demonstrating its commitment to sustainable development.
