Date: 19th December 2023
A comprehensive new report on electric vehicle (EV) service, maintenance and repair (SMR) from the Association of Fleet Professionals (AFP) underlines the “real world” difficulties of setting budgets in what remains a relatively new discipline.
Produced in conjunction with fleet consultancy, Expense Reduction Analysts, it shows significant variations in the SMR budgets allocated by vehicle leasing companies for particular models over the length of a contract.
Paul Hollick, chair at the AFP, said: “For some time, there have been conversations across our membership about leasing company EV SMR, with questions asked about some of the costs being charged. As a result, a number of fleets have unbundled the SMR element from their lease and either brought management in-house or employed a specialist third party.
“The fact is that EV SMR is a relatively new management discipline and, in most cases, setting an accurate budget is a long way from easy. There are few or no historical precedents and even the most well-informed experts have limited data available. There are lots of projections around of varying value but limited real world experience. Leasing company fleets are in the same boat as everyone else when it comes to this.
“However, we have found variations that in a few cases run into four figures between SMR budgets set for same vehicle by different leasing companies. Our advice is that fleets should engage in an active dialogue with their suppliers where they feel that the budgets set are incorrect. This is very much an industry conversation.”
An interesting aspect of the research is that certain leasing companies seem to quite dramatically favour certain manufacturers, specific models and even types of EV when it comes to setting budgets.
Paul said: “Generally, dedicated EV manufacturers have much lower servicing budgets applied by leasing companies compared with other brands, we have found, particularly when set alongside the German premium manufacturers.”
The report also breaks down the different elements of EV SMR and finds that the budgets allocated to tyres are the most problematic, he added.
“Tyres make up the vast majority of EV budgets and it does seem clear that these vehicles tend to wear them out faster than petrol or diesel cars, while the tyres themselves are generally more expensive and sometimes are designed with lower tread.
“This expense can largely counteract the lower servicing and inspection costs EVs enjoy compared to internal combustion engined vehicles. Furthermore, the increased weight of EVs and their high torque levels mean that wear rates will depend very much on how vehicles are driven, leading to large potential variances in cost even from driver to driver.
“All of this represents a higher financial risk to lessors and could account for a large part of the budgetary variances we are seeing.”
Copies of the EV SMR Report are available to AFP members only. The report can be downloaded from the Resources section of the Members Area – Login (theafp.co.uk)