Three-quarters of fleets in the UK are postponing the switch to electric vehicles because of the rising costs associated with electrification, new research reveals.

The study from Bridgestone and Webfleet suggests that increased energy costs and falling values of EVs were factors cited by fleets to delay their adoption of the cleaner driving technology. Of 210 fleet companies that took part in the research, 78% said that cost pressures were influencing their EV strategy.

Cost pressures are making it financially challenging for fleets, with a sizeable number of fleets looking to extend their vehicle replacement cycles, reduce their fleets and make staff redundant. In this environment it was unfeasible for some companies to contemplate the significant investment that moving to EV entails.

“Cutting capital spend is the go-to survival strategy for many businesses as rising costs hit their bottom lines,” said Andrea Manenti, vice president for north region at Bridgestone EMIA.

“But when it comes to fleet decarbonisation and digital transformation, it is a case of kicking the proverbial can down the road”, said Manenti. “What’s more, by deferring expenditure and adopting a short-term approach to cost-control in these areas longer-term profitability risks being compromised.”

She continued: “With careful planning and management insights, the total cost of ownership (TCO) of electric vehicles – the cost of procuring, operating and maintaining them – can be lower than for their fossil-fuelled equivalents, resulting in savings over the fleet lifecycle.”

The rise in global electricity prices since the war in Ukraine has eaten into one of the biggest benefits of running an electric vehicle. Unless most charging is done at home, it is now just as expensive to use a public charging station as it is to fill up an ICE vehicle with unleaded or diesel.

Just as significant for the fleet sector is the falling residual value of used EVs. Losses of 25% after one year of leaving the forecourt are now not uncommon, weakening the case to fleet companies of investing in EV.