February 28, 2023 | Automotives Blogs
Of late, there has been a lot of talk on ESG and sustainability. However, businesses have not done much to implement their plans.
They can no longer delay action, given the increased scrutiny of regulatory authorities. But where should they begin?
Their vehicle fleet is a good place to begin.
By replacing gasoline and diesel vehicles with electric vehicles, they can reduce their carbon footprint and take a decisive first step toward sustainability.
Globally, 10.5 million new electric vehicles, including battery electric vehicle and plug-in hybrid electric vehicle, were delivered in 2022, registering an increase of 55% YoY.
Corporate demand for EVs has increased across various sectors while the adoption of internal combustion vehicles has reduced. Data of 2019 versus 2021 across eight major sectors shows a reduction of around 25% in the share of diesel vehicles. This reduction in the share of diesel vehicles is accompanied with around 28% increase in the share of electric vehicles.
The substantial change in the corporate passenger fleet make up highlights the increased focus on EV transition.
There is little doubt that electric vehicles are more expensive than their internal combustion engine counterparts. Despite the initial cost, the inclusion of electric vehicles in corporate fleets can offer several advantages. Here are some of these.
Global organizations with operations in multiple countries and jurisdictions may find it difficult to understand the purchase and tax incentive structure related to electric vehicles. To avail such benefits, they must have thorough knowledge of the tax landscape across various countries and states. To simplify this process, lease providers and fleet management companies (FMCs) are actively offering advisory services to support clients in EV transitions.
Transitioning to EVs can create a win-win situation for corporations and government authorities. Before finalizing a strategy for such a transition, companies must understand the complexities around government incentives and prepare accordingly.
Companies must consider various factors such as:
Proactive and detailed planning with a trusted advisor that has deep industry knowledge can ensure a seamless transition to EVs.
Learn more about spend management for corporate fleet by downloading the 2023 GEP Spend Category Outlook.
Author: Abdeali Dholkawala