ABM Q4 - Flipbook - Page 89
Don’t delay HGV
electrification
→ Maria Bengtsson is mobility leader at EY UK
W
ith the impact of
geopolitical disruption
on supply chains and
economic growth
causing uncertainty,
many companies are
not currently prioritising
fleet electrification.
The roadmap for
regulation around the UK’s EV transition
also remains uncertain, with fleet
operators having to contend with
incomplete information, conflicting
guidance and fluid regulation.
The hesitancy to embark on the
electrification journey has been most
prevalent in the HGV space, with the
market penetration of new electric eHGV
registrations reaching just 0.94% market
share in Q2 2026, according to figures
from the SMMT.
However, the direction of travel for
mobility in the UK is clear, even with
potential updates to the ZEV Mandate
– for cars and vans, uptake of BEVs
is continuing to accelerate, thanks to
improving battery ranges, additional
charging options, more attractive price
points and more model choices.
While HGVs are lagging, the market
is quickly approaching a turning point
whereby electric powertrains are
becoming a more cost-effective solution.
For HGVs, the transition to electric
tends to be more complex than for
smaller vehicles. Deferring planning and
implementation processes to a later date
could prove to be expensive.
Lower than expected
The perceived TCO of eHGVs is
undoubtedly one of the most prominent
barriers. However, EY research shows
that TCO parity with diesel HGVs is
possible. With the right strategy, it could
even be lower for eHGVs than for diesel.
In addition, upfront costs are decreasing,
with average battery prices having fallen
up to 40% in the last two years.
Finally, the Government has introduced
several schemes in support of vehicle
electrification. There are grants for
depot charging, with several application
windows across 2026 and 2027, funding
up to 70% of charge point and civil costs,
up to a maximum of £1m across all sites.
With grid upgrades costing up to
£5m and taking up to three years,
inadequate grid connection at a depot is
a significant barrier to electrification.
Companies should explore what grid
capacity their fleet actually needs, and
whether battery storage could work as
a supporting solution and a potential
additional revenue stream.
Many have never previously had
to actively manage their electricity
strategies, but when it becomes one of
the largest cost items for a business, this
can have a material impact.
Companies should also consider
tax reliefs such as capital allowances
and R&D tax credits when planning
their electrification processes. Having
an informed view on what tax credits
are available and how expenditure
can qualify for credits is essential –
particularly in pursuit of minimising TCO.
As early as possible
The fact-finding journey around charging
requirements, energy requirements,
implications for operating models,
analysis of different product offerings
and staff training should start as early
as possible, and then be continuously
updated and adapted as systems
become more advanced, new vehicles
enter the market and opportunities for
maximising operational efficiency arise.
The incentive for HGV fleets to
accelerate their electrification journeys
is both clear and compelling, with
cost savings, competitive advantages,
regulatory compliance and enhanced
future agility all potential upsides if the
process is carried out in a timely and
efficient manner.
Q4 2026
AUTOMOTIVE BUSINESS
89
