AUTOMOTIVE CURRENTS Company Cars Go Electric

It's boom time for electric cars, with new models launched all the time, and countries beginning to scrap internal combustion engines. But are all-electric vehicles really suitable for business? We survey the scene.
E-fleets are not on the streets – yet.


Torsten Kolander’s 600-horsepower Tesla Model S electric car can really move when he steps on the accelerator. But he tends not to use that extra power much—there’s always a nagging doubt that bursts of speed will use up energy. Fear of an empty battery is a painful reality for electric car users in 2016.

Limited range is only one disadvantage suffered by electro-pioneers — the brave souls who drive a purely electric car, without a hybrid engine and with no conventionally-powered second car. Electric-only drivers have to plan journeys carefully: charging stations are still thin on the ground. A special home-charging box is more or less a necessity; charging off standard mains power can take up to 40 hours. And if you want to use an e-car for business, prepare for a complex tax regime and problems with leasing.

But a small but growing band of pioneers are going for it, switching to pure electric for business and home use.

Mr. Kolander, a video producer, is one. He uses his electric car for customer visits and private trips, including long vacation drives. Always a sports car nut, he began saving for a €120,000 ($135,000) Tesla as soon as he saw the designs. He loves the speedy technology, but says “the sustainability question” is also close to his heart.

For shorter journeys, electric is great, but going over 150 km takes luck and strong nerves. Peter Wüstnienhaus, E-mobility expert

People like Mr. Kolander used to occupy the narrowest of niche markets. But suddenly a mass e-car era seems to be upon us. Barely a week goes by without new tax breaks and premiums for all-electric use. Norway is discussing a ban on internal combustion engines. And a flood of new models may soon make electric a truly mass-market phenomenon. In March, Tesla presented its “Model 3,” promising 350 kilometer range at a price point of $35,000. Other manufacturers are following suit: GM wants to beat Tesla to market with its Chevrolet Bolt and Opel Ampera-e. Volkswagen will build a million VW e-cars by 2020.

Klaus Baumgärtner is chief executive of Bridging IT, employing 500 computer specialists in Mannheim in south-west Germany. In private life, he just returned from a quick vacation trip to Bordeaux. Over 1,300 kilometers, or 800 miles, all in the Tesla. He had to charge up every 350 kilometers or so, he said, “but who wants to drive all that way without a break?”

There are Tesla Supercharger charging stations roughly every 150 kilometers on western Europe’s highways: their 135 kilowatts can fill a lithium battery in thirty minutes, up to eleven times faster than the competition. When not on vacation, Mr. Baumgärtner uses charging stops to check his mail. A phone app tells him where he can find the nearest charger.

Mr. Baumgärtner’s company has 22 electric cars in its fleet, a sixth of the total. The sales team use them “like any other company vehicle,” said fleet manager Dirk Braun. The vehicles have racked up nearly one million kilometers since the company’s ambitious project began in December 2014 — now other firms are asking about their experience. Above all, it took a lot of planning, says Mr. Braun. All participating employees install a charging box at home, running 100 percent on green power. They each pay €150 per month, covering most of the differential with a BMW or an Audi: “We didn’t want the firm to cover everything,” said the fleet manager. Now no one wants to go back to diesel. Customers are impressed too, by the Tesla’s sleek lines and solid performance.

At the lower end of the market, things aren’t so smooth. Peter Wüstnienhaus, an expert on e-mobility, commutes 60 kilometers a day in his Renault Twizy. “You have to distinguish between short and long journeys,” he said. For shorter journeys, electric is great: in stop-and-go traffic, frequent braking recharges the batteries. But “going over 150km takes luck and strong nerves,” he added: problems will ease as new models emerge, but in the meantime, prospective consumers should carefully analyze their car use.

The devil is definitely in the details. In some countries, chargers run at a tortoise-like 3.1 kilowatts. Check out Facebook groups and you’ll find stressed and angry drivers, swapping war stories about blocked, broken or missing charging stations. German transport minister Alexander Dobrindt has promised €300 million to extend the network. But drivers complain of chargers lacking where they are needed most — on highways around big cities. Worse: not every charger can be used by every e-car.

“Charging infrastructure is the key to e-car normalization,” wrote consultants PwC in a recent study. Alongside availability, charging speed is vital. Some low-end models, like the Renault Zoe, sometimes charge so slowly that an hour charging translates as an hour on the road. Public stations can take up to ten hours to charge a Tesla: simply not a practical solution.

But domestic chargers are no panacea. Regular power outlets have an upper limit of 4.6 kW. At that rate, a Tesla can take 36 hours to charge, a smaller car 10. And blowing an electric fuse is all too easy. Installing a faster box can increase speeds five-fold, but that costs money.

Speaking of costs, even with premiums, e-cars still have a bigger headline price than their gas-guzzling equivalents. Things improve if running costs are included. Some users say gasoline savings alone make e-cars worth it, especially if with cheap electricity, like hydroelectric in the mountains. But in Germany, electricity is a comparatively expensive energy, and low gas prices mean the differential can easily be erased. Mr. Wüstnienhaus says he pays about €4.50 per 100km, barely better than a small diesel-engine car.

Improved charging infrastructure is the key to e-car normalization. PwC e-mobility consultancy report

But maintenance costs for electric vehicles are impressive. No oil changes, no fan belt replacements. Even the brakes last much longer—90 percent of braking is done with the generator, not the pads. Insurance costs less too, and—in Germany at least—the car is untaxed for the first ten years.

“A fully electric fleet makes sense within an overall energy strategy,” said Roland Schüren, who runs a chain of 18 bakeries in north-west Germany. For Mr. Schüren, electric cars are just one aspect: his carbon-neutral bakeries generate their own electricity. Electric motors power all vehicles: his Tesla Model S, electric delivery vans, right down to the electro-quads ridden by company apprentices. Pride of place goes to his solar-powered charging stations: they come on stream after 1 p.m. every day — before that, electricity is needed for baking bread. Mr. Schüren says it makes financial sense — gas and maintenance savings cover the higher initial outlay within 9-12 months, he says.

Among small and medium-sized businesses, word has gotten around about Mr. Schüren’s experiments. A Stuttgart company recently called to pick his brains. “This guy has five shops in the city center,” said Mr. Schüren. “If there’s a smog alert, diesel vans are banned from the road, and he can’t deliver.” So are electric delivery vans really a solution? “Yes, in theory, if mileage stays under 150 kilometers day,” he added. But everyone has to be on board. Recently, one dispatcher forgot, squeezing an extra delivery onto an existing itinerary. Just thirteen more kilometers, but enough to run down the van’s battery. The driver had to spend an unscheduled hour recharging at a supermarket.


This article originally appeared in WirtschaftsWoche. To contact the author: [email protected]