Opinion: Real-world difficulties of setting EV SMR budgets

By Paul Hollick, chair of the Association of Fleet Professionals (AFP)

How electric cars are performing when it comes to service, maintenance and repair (SMR) has been the subject of much discussion among fleets in the last year or so, with often contradictory reports about how they are faring in the real world.

At the Association of Fleet Professionals (AFP), we’ve just created what is hopefully the definitive word – at least for the moment – in the shape of a new report written in conjunction with Expense Reduction Analysts. It really underlines the current difficulties in this area.

The fact is that electric car SMR is a relatively new management discipline and, in most cases, setting an accurate budget is a long way from easy. There are few or no historical precedents and even the most well-informed experts have limited data available. Many projections are available but limited actual experience. Leasing company fleets are in the same boat as everyone else when it comes to this.

However, we have found variations that in a few cases run into four figures between SMR budgets set for same vehicle by different leasing companies.

Our advice is that fleets should engage in an active dialogue with their suppliers where they feel that the budgets set are incorrect. This is very much an ongoing industry conversation.

The report also breaks down the different elements of electric car SMR and tyres are emerging as the leading issue.

They make up the vast majority of EV budgets and it does seem clear that these vehicles tend to have much higher wear rates than petrol or diesel cars, while the tyres themselves are generally more expensive and sometimes are designed with lower tread from new.

Furthermore, the increased weight of EVs and their high torque levels mean that tyre life will depend very much on how vehicles are driven, leading to large potential variances in cost even from driver to driver.

All of this represents a higher financial risk to lessors and could account for a large part of the budgetary variances we are seeing.

Perhaps importantly, the report indicates that expense of tyres can largely counteract the inherent lower servicing and inspection costs EVs enjoy over internal combustion engine vehicles because of their reduced number of wear parts.

While there is no doubt still much to learn about electric car SMR, we think the report provides as accurate a picture as can currently be constructed but expect this to very much remain a live dialogue within the AFP for the foreseeable future.