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3 ways procurement can add more value to the EV transition

20 November 2023 3:34

women on phone standing next to car

A successful fleet transition to electric vehicles (EVs) is a real opportunity to set your organisation up for future success. A robust procurement approach balancing both budget and sustainability goals can help minimise financial risk, crucial when embarking on such a significant organisational change.

Here are three considerations from Interleasing’s Group Procurement Manager, Ashley Hilton, on what to look out for to get the most value for your organisation and make it a smooth transition for everyone involved.

 

1. Understand the full scope of potential savings

When it comes to balancing budgets, legislation means fleets can potentially make tax savings on EVs. Together with savings on fuel and maintenance, the total cost of ownership could be less than an ICE vehicle.

“It’s a significant business change, so start by understanding your current state and opportunities, as well as priorities in line with wider business goals.”

Ashley Hilton, Group Procurement Manager, Interleasing

Here are two opportunities to save:

  • Leverage the Federal Government’s fringe benefits tax (FBT) exemption on electric cars. This incentive program means you can make an eligible EV available to an employee as a driver assigned vehicle, without paying FBT. Which according to the Electric Vehicle Council, could add up to a saving of over $10,000 per year (depending on individual circumstances).
  • Enjoy lower running costs on EVs compared to petrol cars, including fuel and servicing expenses. On average, EVs typically cost 70% less per km than a petrol-powered car, while servicing is less as EVs have no internal combustion engine (ICE), multi-speed transmissions, head gasket or spark plugs1. Uncovering the value that’s on offer can help mitigate the initial acquisition costs of bringing EVs into your fleet.

 

2. Understand what value means to your organisation

As a significant and sometimes complex change, it’s important to get EV transition right the first time. And that means knowing what represents good value for your organisation. Ashley suggests procurement managers should think about the transition program’s total value when making recommendations.

Uncovering the value that’s on offer can help mitigate the initial acquisition costs of bringing EVs into your fleet.

“Procurement’s main consideration should be value, but this can be different things to different organisations. It can be lowest price, or highest quality, highest spec, highest volume, or lowest carbon footprint. The more you know, the closer you’ll be to getting it right.”

Ashley Hilton, Group Procurement Manager, Interleasing

Once you know what your organisation will measure and value, an experienced EV transition partner, like Interleasing, can help you balance priorities and price so you can build an EV solution that’s fit-for-purpose.

 

3. Find a partner with purpose 

For many organisations petrol vehicles are all they’ve ever known. Partnering with a fleet management organisation (FMO) that has specific EV experience beyond vehicle supply can help you set your new fleet up for a successful future.  

“Ultimately, procurement managers want their recommendations to be a success. Success isn’t just about saving money. Because if the vehicles aren’t fit-for-purpose, or the charging infrastructure isn’t right, or drivers aren’t well educated, that's not the best outcome.”

Ashley Hilton, Group Procurement Manager, Interleasing

The actions and credentials of your transition partners and suppliers also impact your own organisation’s sustainability outcomes, so it’s important to think carefully when considering partners for your fleet transition. Things like a net zero target, using Indigenous suppliers and having a stance on modern slavery are important ESG considerations for your organisation, as well as things to look out for when considering potential partners.

At Interleasing we have successfully transitioned over 30% of our fleet to electric, and can draw on this experience to guide other organisations through the complexities of fleet electrification. We’ve also partnered with Greenfleet to offer carbon emission offsetting to counteract emissions that can’t be reduced or avoided.

 

Procure your way to EV success

An experienced partner can help with all the new elements of electrifying your fleet. This includes designing and installing your charging infrastructure solution, arranging drive days, and facilitating the use of EV charge cards.

“Having a dedicated manager with experience in every aspect of the transition, beyond the vehicles, will help you get the best outcome. And it will make the job easier in the short and long term,” says Ashley. Interleasing’s dedicated EV infrastructure team offers a complete end-to-end fleet transition and sustainability service for assessing, implementing and managing your transition to electric vehicles. If you want to talk about electrifying your fleet, get in touch with one of our experts today.

 

1.Green Vehicle Guide, Electric vehicle myths busted, 2023

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