3 ways to reduce the impact of fuel prices on your business

At 2 euros for a liter of petrol, are you seeing business’s profitability going up in smoke? This is the now or never moment to turn to solutions that will help you reduce your fuel consumption – sustainably.

Given the price explosion at the pump and price unpredictability, reducing one’s fuel consumption is really the only practicable response for all those professionals who cannot do without their vehicle. This ranges from paramedics to haulers, including also all those tradespeople and service providers who are called to their customers’ premises and for whom neither teleworking nor public transport nor soft mobility solutions are realistic options.

The opportunity to kill two birds with one stone

Crises are situations that promote the acceleration of changes long considered necessary, but which are constantly being postponed because the cost benefit ratio is not big enough. As such, breaking through the psychological “2 euros a liter” barrier and with the price of diesel exceeding that of petrol on some days may do more for the energy transition than all the rational discourse on the need to dramatically cut greenhouse gas emissions to limit the effect on climate change. Putting it another way, by attempting to reduce the impact of fuel prices on your business today, you are acting both in your business’s best interests and in those of the climate. Delaying decisions you can make now to sustainably reduce your fuel expenditure is all the riskier because exiting carbon-based energy sources has never having been so high up the agenda, both for geopolitical and ecological reasons.

Here are three types of solution you can implement and, for greater efficiency and effectiveness, combine to protect your profitability and maintain your service quality, while improving your carbon footprint.

Transitioning to electric

Abandoning the internal combustion engine means saying goodbye to those painful visits to the fuel pump and eliminating your CO2 emissions. Recharging an electric vehicle’s batteries costs between 3 and 4 times less than filling up with petrol/diesel. Even if the price of electricity has also increased sharply (being indexed on the gas price), transitioning to an electric vehicle seems to be the ideal solution, especially in the following two situations:

  • Your employees do not have a high daily mileage. This means they can drive the entire day without stopping at a charging station. Battery performance is constantly increasing, but the real-world range of the most common models rarely exceeds 300 kilometers. Recharging times are also improving but, even with rapid charging stations, you need to reckon on 20 minutes to recharge 80% of the battery, and 30 minutes for the remaining 20%. This is all time during which your employees are not driving, and are not calling on your customers…
  • You are operating in dense urban environments. Low emission zones (LEZ) are proliferating. Sooner or later, depending on the urban area in question, only the least polluting vehicles are or will be permitted to operate. Let us remember that diesel vehicles are supposed to be banished from the Greater Paris region from 2024. Electric vehicles, cars or light utility vehicles, will protect you from these restrictions.

If you opt for this solution, however, you are going to encounter two important obstacles:

  • the cost price. Electric vehicles cost significantly more than internal combustion engine vehicles. Everything depends on the subsidies you can claim. If you get rid of your petrol vehicles licensed before 2006, or a diesel vehicle licensed before 2011, you are eligible for the government’s conversion premium. It can be up to 9000 euros for an electric utility vehicle and 5000 euros for a car. There may be other local subsidies on top, of as much as 6000 euros in the Île-de-France region. Something worth knowing, this subsidy is available whether the vehicle is new or second-hand, bought or leased. Leasing may be the good solution for gradually converting your fleet. It is up to you to do the arithmetic, factoring in of course the savings you will be making by eliminating overnight your trips to the fuel pump. 
  • Availability. The increase in fuel prices is boosting demand for electric vehicles, but the Covid crisis, the shortage of certain semiconductors and the saturation of the maritime transport sector have slowed the production and delivery of new cars. This means longer timescales for all vehicle types. In France, we are looking at a minimum of 6 months… The situation is also very tight on the leasing market, where supply currently exceeds demand, and on the as yet still very limited second-hand market.

Is “retrofit” a valid option?

Electric retrofitting consists in converting an internal combustion vehicle into an electric vehicle. This operation, permitted in France since the decree of 13 March 2020, seems particularly interesting in the current situation. It is also environmentally virtuous since the re-use of the vehicle is an important raw material saving. Unfortunately, this sector is still very underdeveloped, and we are a long way from all models being capable of being “retrofitted”.

To convert your diesel or petrol vehicle to an electric vehicle, it needs to have been on the road for at least 5 years. Next, the conversion kit for your model has to be available on the market, and you need to find an approved service provider to install it. Once these conditions have been met, the cost of the operation remains relatively high, but is cheaper than purchasing a new electric vehicle. According to a recent study by Ademe, the French Environment and Energy Management Agency, you need to budget for between 12 000 and 15 000 euros for a small city car and between 22,000 and 27,000 euros for a van. Subsidies can knock 5000 euros off the bill. ADEME considers this solution to be appropriate for companies with a light vehicle fleet, and especially for companies using very highly specified/equipped vans/trucks, typically belonging to tradespeople. Indeed, a retrofit avoids having to re-equip the vehicle and enables it to operate in low emission zones.

Deploying route optimization software

Whether you use internal combustion engine or electric vehicles, you have every reason to deploy software that will help you reduce mileage by optimizing your routes, be they regular or not. With internal combustion engine vehicles, the benefit is immediate: companies using Nomadia optimization solutions achieve fuel expenditure savings of between 10% and 30%. For example, using our TourSolver solution,

If you have already converted to electric, you will be making savings of the same order of magnitude, but on smaller sums. The benefit of optimization software, however, remains undiminished because by optimizing the sequence and mileage of each route, you can eliminate trips to the recharging point in the midst of the working day. The resulting time saving enables you to increase the number of points served per route, or the number of calls per day.

Irrespective of the characteristics of your vehicle fleet, optimization software enables you to maximize your vehicles’ utilization rate. That means that you can do as much or more with fewer vehicles. Not only do you consume less energy overall, but you are making additional savings on your fleet’s maintenance and insurance cost lines. For example, for the same number of routes, Sodexho is using 10 vehicles fewer than before and making annual savings of 150,000 euros.

> Find out about our optimisation solutions’ ROI

> Calculate the savings you can make

Adopt eco-driving

Of all the possible options for reducing the impact of the cost of fuel on your business, eco-driving is without doubt the one requiring the lowest upfront investment. By training all their drivers in the principles of eco-driving, companies can reduce their fuel consumption by between 15% and 20%. For large fleets, not only does that represent very significant savings, but also an appreciable reduction in greenhouse gas emissions because, quite logically, the less fuel you burn, the less you emit.

The training benefits from being accompanied by fitting vehicles with eco-driving boxes, which prevent drivers from falling back into their previous bad habits. The box offering has expanded considerably, and it is now possible to equip a vehicle for 150 euros – a very reasonable investment to make given a fuel reduction of between 5% and 15%, depending on situation and vehicle type.

You have no control over fuel price movements. This is no reason to put up with increases that cripple your profitability, and which can be fatal to your business. Thanks to the options we have described in this blog, you can significantly and sustainably reduce your fuel consumption, protect your company and your employees’ jobs, and restrict your carbon footprint.

These are 3 good reasons to act now!

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