CASE STUDY: EV adoption at Johnson Controls
Johnson Controls is a worldwide leader in fire, HVAC and security equipment for buildings. It employs more than 105,000 people in around 2,000 locations across six continents.
The Challenge
Arval has a longstanding relationship with Johnson Controls, providing the vast majority of its 30,000 unit international fleet as part of its Element partnership, and is responsible for 2,800 company cars in the UK alone.
Johnson Controls wanted to be able to integrate EVs into their company car choice lists for the first time.
Because the Johnson Controls’ fleet is operated across 26 European countries, the difficulties of using whole life cost (WLC) methodologies to include EVs on the same choice lists as diesel and petrol vehicles were insurmountable, so an alternative solution was required.
The Solution
Tim Wright, EMEA fleet manager at Johnson Controls, explained: “What Arval were able to do to overcome the issue with WLCs was to reverse engineer the lease rates for EVs to make them comparable to petrol and diesel vehicles. This involved looking at variables such as subsidies available for EVs in each country as well as local taxation.”
“The other move we have made is to increase the number of manufacturers with which we work to offer a wider EV choice. In recent years, we have mainly used a group of around half a-dozen badges for company cars, but for EVs this has been extended as appropriate.”
Paul Marchment, Business Manager at Arval UK, said:
“We have used our own company car scheme as a learning model for EV adoption and, applied the best practice lessons we have learnt when our customers have been constructing their own EV initiatives."
As explained by Tim, “Since the launch of the revised scheme, 55% of new orders have been EVs. The benefit-in-kind situation in the UK means that EVs are extremely attractive to our company car drivers. A typical 40% tax payer with a diesel vehicle could easily go from paying £3,000 per year to nothing.
People have simply taken to the EV concept. They value the driveability of the cars, they soon overcome any range anxieties, and they want to play their part for the environment.”
Paul Marchment added, “The benefit-in-kind situation means that cash-takers can move back into the company car scheme and have a brand new EV, while paying little or no personal tax. We are working on ways of making the process of returning as easy as possible for them.”
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