CASE STUDY: Accelerating the electrification of Aviagen’s car fleet using whole life costs
Aviagen is a renowned and long-established poultry breeding company, supplying broiler breeders to over 100 countries worldwide and with UK operations based in Edinburgh. The company has a long-term relationship with Arval which has been sole supplier for its core leased fleet of 90 vehicles for more than five years.
The Challenge
The company was facing increasing demand from its drivers to incorporate hybrids, PHEVs and electric vehicles (EVs) into its car policy, both to minimise benefit-in-kind taxation costs for employees but also offer more environmentally-friendly models.
Debbie Watson, Head of HR at Aviagen, explained: “We have a five tier choice list and the vast majority of our cars fall into the lower three of those levels. Historically, this was structured using monthly lease rates and because these tend to be more expensive for electrified vehicles due to their higher purchase price, adding appropriate choices at all levels was difficult.”
The Solution
Jacqui Lee, Business Manager at Arval, looks after the Aviagen relationship and said that the issues that the company were facing were not uncommon in the age of vehicle electrification.
Those fleets that use lease rates as the basis for their choice lists are finding that they need to change their approach.
“There is a well-proven answer to this problem, which is to rebuild those choice lists based on whole life costs. If you look at not just the lease rate, but the entire cost of the vehicle including factors such as fuel and maintenance over its fleet life, then you have the basis for encouraging electrification.
Hybrids, PHEVs and EVs might be more expensive to buy, but measured in terms of whole life costs, they are extremely competitive alongside petrol and diesel vehicles.”
Results
Debbie said: “The new choice lists that we have created, with the help of Arval, mean that hybrid, PHEV and EV models are now available at all levels, fully meeting our driver aspirations in terms of being able to access lower-tax, more environmentally-friendly cars.”
The revised car policy has been in place for a few months and despite interrupted supply because of the pandemic, the number of hybrids, PHEVs and EVs on the fleet has more than doubled.
“As cars are coming up for renewal, many employees are looking seriously at the electrified options.
In support of this, we’re having some building work done at our head office and installing chargers to support EV and PHEV drivers. One of the key points of Arval’s advice was providing the necessary infrastructure around adopting electrified vehicles."
Jacqui added: “Aviagen is an excellent example of how a fleet can move over from a petrol and diesel-based fleet and begin to progress towards the electrified model of the future, while managing costs effectively and meeting driver aspirations.”
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For more information and articles about Electric Vehicles, please visit our page - Go Electric | Arval Insights
To find out more about how Arval can help with your transition to Electric Vehicles, please visit – Electric Vehicles Fleet - EV Fleet | Arval UK
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