What Van? Britain's biggest and best van buyers' guide

Leasing: Try before you buy

Date: Friday, August 18, 2023   |   Author: Jack Carfrae

We would bet that any van fleet operator reading this probably has vehicles that are older than average. Either that, or you have recently got shot of some LCVs that had run beyond their original term. 

Those who have just replenished a large portion of their fleet can look away now, but for anyone in need of new LCVs with an eye on electric, another long-term lease may not be
the way to go.  

One of the UK’s biggest contract hire companies claims that noncommittal, sub-two-year contracts are among the best ways to establish electric vans because their try-before-you-buy nature and the ability to showcase the vehicles to different employees and departments are effective techniques for a soft launch. 

“Vans on a five-year contract is kind of standard,” explains Arval’s consultant, Ben Edwards. “We’ve got some clients with some very ambitious [EV] targets – we are talking about 2027/28 for a lot of them – but if we can get them into a lease for, say, three months or six months to give it a try and make sure it’s fit for purpose, then you can pass the van round different depots, different entities, different drivers. It gives everybody that kind of softer exposure so that you are not just forced into it, which really works.” 

Such contracts can be extended at will and many are. Edwards says they frequently segue into full-blown leases after the initial trial period.  

“If you took it out for, say, a three-month lease, then decided to keep it for nine months, that’s fine. We just amend the contracts and it runs like a contract hire. And then, we’ll quite happily put an order in and you keep hold of that van until we get your [electric] one. We’ll get it wrapped, racked and everything else, and there’s your new EV, all kitted out and ready to go.”

In December 2022, the company announced that its mid-term rental product, Arval Flex, which offers vehicles on flexible contracts up to 24 months, had grown by more than 50% in a year to 3,800 vehicles (including cars) and reached circa 4,100 by the middle of this year. It is a drop in the ocean compared with the firm’s total 187,000 vehicles, of which the Flex fleet accounts for 2.2%, but Edwards is a staunch believer in its function as a bridge between ICEs and EVs. 

“I think nearly 100% of all EV vans that have gone out [on flexible contracts] are still out,” he says. “Nobody has actually returned them, and then they’ve taken more.”

Holding fire 

Despite all of the above and the general zeitgeist, fleets may actually be better off avoiding electric LCVs entirely for the time being. That is not to say everyone should stick with diesel forevermore and the 2030 ICE deadline for vans (2035 for hybrids) is alive and well (we are paying no heed to recent government murmurs about a potential extension, at least not yet) but the proficiency of large electric vans, especially, remains a stumbling block.  

“Electric vans have always been a bit of a struggle because there’s a question of whether the larger ones are actually capable of doing the job,” says Edwards. “We already know that when a car says it will do 280 miles but you’ve got five people in it and your boot’s full, your range is significantly less. Well, most vans don’t go out empty; engineer vans and utility vans are full most of the time, so those ranges need to be [more] realistic.”

For businesses in this demographic, the advice is to run down the clock on diesel vans and wait until plug-in equivalents have the necessary laden range to cope. 

“You are going to order diesel right up until the deadline because that EV just isn’t going to be there,” explains Edwards. “There’s some nice stuff coming through[...] but especially for those large vans – 3.5 tonnes, and you might well be towing a digger or something like that – an electric van just isn’t feasible at this stage and time. There isn’t a product that can do it, and those that can, by the time you’ve got them loaded, your range is pitiful.” 

Edwards’ statements were backed up by the Association of Fleet Professionals (AFP) in July, which claimed some of its members were holding off on electric LCVs for exactly these reasons. “For many, it has become clear that electrification is just not going to happen at the expected speed, so they are returning to established strategies,” claims AFP chair, Paul Hollick. “Many of our members who were committed to electric van adoption as soon as supply was available have slowed or even put a temporary halt on the rate of acquisition. They are hitting a range of operational issues – range, payload, charging infrastructure and more – that means replacing existing diesel vehicles directly with electric equivalents is not yet practical.

“This doesn’t mean they are intending to resist electrification but that more work needs to be done in all kinds of areas including domestic and public charging, changes in operational practices and improvements in the vehicles themselves.”

Edwards reckons that fleets that are new to electric vans are better off initially running them in bite-sized form. If they are applied to areas of the business where they are not incumbered by the aforementioned issues – i.e. the range, the payload and the charging cycles are fine for the job – then operators can get used to them ahead of a wider scale rollout when more capable models are available. 

“With cars, it’s just a blanket approach; it’s a much bigger project for vans,” says Edwards.“You really need to tailor and target certain sectors, and not everything is going to be able to be done now. It’s about cherry picking those areas where it can be done, building your experience with it as a business, looking at the way your downtime is and at your charging opportunities. Do it on a case-by-case basis.”

Case study: AkzoNobel

Decorative paints and performance coatings specialist AkzoNobel took three electric vans via Arval’s Flex-EV scheme on a trial basis around 18 months ago. The move was part of a series of efforts to cut the fleet’s CO2 and aimed to establish how well the vehicles met operational requirements in real world conditions, including using telematics to
collect relevant data.

“We knew that we needed to increasingly electrify the fleet in order to meet sustainability and colleague satisfaction objectives,” says AkzoNobel’s UK fleet manager, Karl Allward. “However, we wanted to make this a relatively natural process over time, rather than suddenly stipulating that drivers should drive certain types of cars and vans.” 

“We want to adopt a gradual approach that will allow us to learn as much as possible over a period of time before adopting vans in quantity. Particularly, these vehicles are a good fit for our Dulux Decorator Centres, where they have localised delivery routes that are suitable for the range and payload eLCVs can offer today.”

Arval’s Edwards explains that the focus was on lower mileage vehicles, which were deemed more suitable for the tasks at hand. 

“Once they can clarify that the vehicle will be suitable and test the range in real world application, they can then look at those depots that have got a bit of a higher mileage [requirement] then put that vehicle there. They can trial it and make sure it’s actually fit
for purpose, so they’re getting a real use case out of it without having to commit to a vehicle for three or four years. If it doesn’t work well, they can hand it back, and there’s no penalty.”

Allward agrees with Edwards that compared with cars, electric vans need “greater consideration” due to the impact of hefty payloads on range. However, he added that the trial had positive results and suggested the firm would invest further in plug-in LCVs as a result.   

“Our experience so far has been relatively successful,” he says. “We will be looking to add electric vans into lower stress roles in the short-to-medium term, before looking to full electrification of the fleet towards the end of the decade. As with the car fleet, we believe it is best to make this a gradual process in order to minimise any operational impact.”

 

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