Employers need to be wary of deploying EV-only policies before drivers are fully on board with electric vehicles, as they could put sustainability goals at risk.

If employees feel pushed into having an EV before they’re ready, there’s a chance they’ll opt into any cash allowance scheme in place

While fleet adoption of EVs continues at pace, Volkswagen Financial Services (VWFS) Fleet says businesses should still handle electric vehicle adoption carefully.

Latest figures from the Society of Motor Manufacturers and Traders (SMMT) show the majority of fully electric cars are acquired by business and fleet buyers; combined, these accounted for 77.1% of pure electric car volumes in 2023, compared with 57% of the overall market.

But VWFS Fleet warns that many drivers are still unsure of the new technology, as well as having concerns about range and charging anxiety.

David Watts, fleet product manager for electric vehicles, commented: “Although the transition to EVs is a future inevitability, for many fleets this is still a work in progress. If employers push EVs too quickly, without a clear and effective driver adoption strategy and policies in place it can have a number of unintended adverse sustainability consequences.

“Of course, the intention behind switching to an EV-only car policy is well-meaning. However, there will be drivers who don’t want an EV or who might feel it’s too difficult to live with. And if employees feel pushed into having an EV before they’re ready, and there’s a cash allowance alternative in place, there’s a chance they’ll opt out of the EV scheme and choose this instead.”

Employers have less control over the vehicles employees choose under a cash allowance scheme, and the average vehicle selected will typically be significantly older and more polluting than those offered under company car schemes.

“What this means,” said Watts, “is that while an EV-only car scheme on paper looks great for reducing a business’ Scope 1 (direct) emissions, employers are likely to actually see an increase in Scope 2 & 3 (indirect) emissions instead. The net result will actually likely see businesses worse off from a sustainability perspective than if they’d allowed people to access an ICE through the company car scheme in the first place.”

Instead of pushing for EV-only company cars at this stage, Watts suggests there are a number of alternative strategies that employers can adopt to reduce all emissions – beyond just Scope 1 – more effectively.

“Importantly, resolving this issue isn’t just about removing the cash allowance benefit, as this can have a number of adverse effects on employee engagement. Instead, employers should look at how they can add an element of control to the vehicles they allow to be driven for business purposes. For example, this may include tightening up the criteria of vehicles that employees can claim mileage on by introducing a maximum age and maximum emissions.”

Ultimately VWFS Fleet says getting EV adoption right is all about driver engagement.

“Employers need to be proactive about this by gathering feedback from employees, conducting surveys and educating drivers on EVs and the reality of living with them. They also need to openly communicate the benefits of EVs and take the time to carefully dispel the myths surrounding them.

“Once you have driver buy-in, you can begin to increase EV uptake through company car schemes, without risking an increase in the uptake of cash allowance schemes,” summed up Watts.