What is TCO for a fleet of company vehicles?
The Total Cost of Ownership (TCO) represents all the expenditure involved in owning and operating a fleet of company vehicles over a given period. It goes well beyond the simple purchase price, providing a global vision that is essential for any fleet manager wishing to control their budget effectively.
What are the components of TCO?
The Total Cost of Ownership (TCO) of an electric vehicle covers all the costs associated with its acquisition, use and ownership over a given period, generally 3 to 5 years. For a fleet manager, understanding and controlling these components is essential to optimising the financial management of an electric fleet. Here are the main elements that make up the TCO:
- Acquisition cost: This is the initial purchase price of the vehicle, including any taxes, registration fees and, above all, government subsidies or grants for electric vehicles (ecological bonus, conversion premium, various exemptions). This item is often higher for electric vehicles than for internal combustion vehicles, but is largely offset by the financial incentives.
- Operating costs :
- Energy: The cost of electric recharging, which depends on the kWh rate (home, off-peak hours, public charging stations), represents a significant part of the cost, but is generally lower than the cost of fuel for a car. thermal vehicle. Home charging at off-peak times is the most economical.
- Maintenance: EVs have fewer moving parts and benefit from the regenerative brakingThis greatly reduces the frequency and cost of maintenance (no engine oil, less brake wear). However, the battery is a potential cost item to be anticipated in the event of replacement.
- Holding costs :
- Insurance: Insurance rates may be slightly higher because of the value of the battery pack and specific guarantees, but tend to fall as the market matures.
- Depreciation: The loss of a vehicle's value over time, which varies according to the model and demand on the used EV market.
- Taxes and any other charges (e.g. the cost of installing a recharging point).
- Residual value: estimate of the vehicle's cost price at the end of the ownership period, an important element in calculating the final net cost.
By integrating these components, the fleet manager can accurately assess the TCO of an electric vehicle, compare different options and models, and thus control the total cost over time for optimised fleet management.
Why is TCO a key indicator for a fleet manager?
TCO (Total Cost of Ownership) is a key indicator for a fleet manager, as it provides a global and accurate view of the expenditure linked to the use of a vehicle over its entire lifetime, over and above the simple purchase price. Here's why it's essential:
- A complete view of costs: the TCO includes not only the purchase or lease price, but also energy costs (electricity or fuel), maintenance and repairs, insurance, taxes, residual value and management costs. This makes it possible to objectively assess the real profitability of an electric vehicle compared with a combustion engine.
- Budget optimisation: by controlling the TCO, the fleet manager can identify the biggest items of expenditure and take action to reduce them (for example, less expensive maintenance for EVs, savings on fuel thanks to electricity).
- Strategic decision-making: TCO helps you choose the most cost-effective vehicle over the long term, taking into account tax incentives, ecological bonuses, tax exemptions and hidden costs. This calculation is essential to justify investment in an electric fleet over the long term.
- Financial risk management: by anticipating all the costs associated with ownership and factoring in the resale value, the fleet manager reduces any unpleasant financial surprises that could weigh on the fleet budget.
- Monitoring and steering: TCO, combined with telematics tools, enables precise monitoring of usage, consumption and maintenance, promoting optimised management and greater economic efficiency of the fleet.
In this way, TCO is not just a financial indicator, but a strategic tool that guides fleet managers in the sustainable development and cost control of their electric vehicles. This global approach guarantees greater profitability and finer control of resources.
How does an electric vehicle affect TCO?
The integration of electric vehicles into company fleets is profoundly transforming the calculation of total cost of ownership (TCO). While the initial investment is often higher, electric vehicles offer significant savings over the long term, thanks in particular to lower running costs, easier maintenance and attractive tax incentives.
Understanding how each of these factors affects TCO is essential for fleet managers who want to optimise their budgets while meeting today's environmental and regulatory challenges.
Acquisition cost vs. operating cost
The cost of acquisition and the cost of operation are the two essential pillars for controlling the total cost of ownership (TCO) of an electric vehicle in fleet management.
- Acquisition cost: a higher initial investment, but one that is controlled
The purchase price of an electric vehicle is generally higher than that of a comparable internal combustion vehicle, mainly because of the cost of the battery. However, this initial leverage is largely offset by government grants and tax incentives (ecological bonuses, conversion bonuses, tax exemptions), which significantly reduce the outlay. - Operating costs: a major source of long-term savings
Electric vehicles are distinguished by their significantly lower energy costs than conventional combustion engines. For example, charging an electric vehicle costs around three times less than its petrol equivalent over the same distance. What's more, maintenance is reduced thanks to simplified mechanics, with fewer wearing parts and lower maintenance costs (no oil changes, less brake wear through regenerative braking). Lastly, depreciation is often smoother, as demand for used electric vehicles is growing, improving residual value.
For a fleet manager, understanding and comparing these two components (acquisition cost and running cost) is crucial. Even if the initial investment may seem restrictive, controlling running costs and making the most of subsidies can significantly reduce the electric TCO compared with internal combustion, making electric vehicles profitable over the long term and virtuous for fleet management.
Servicing and maintenance: how much can you save with electric?
Switching to an electric vehicle fleet enables fleet managers to make significant savings on servicing and maintenance, which contributes directly to controlling the total cost of ownership (TCO). Here are the main savings levers associated with electric vehicles:
- Drastic reduction in mechanical intervention: The electric motor is much simpler mechanically than a combustion engine. There are around twenty parts in an electric motor, compared with over a thousand in a petrol or diesel engine. This simplicity eliminates the costs associated with traditional operations such as oil changes, replacement of spark plugs, timing belts, fuel filters, gearboxes and clutches.
- Annual maintenance costs reduced by 30 to 40%: On average, the annual maintenance of an electric vehicle is between 120 and 200 euros, compared with 300 to 600 euros for a comparable internal combustion vehicle. This substantial saving accumulates over the life of the vehicle, amounting to several thousand euros in savings.
- Regenerative braking and limited wear on parts: The regenerative braking of EVs considerably reduces wear on brake pads and discs, often doubling their lifespan compared with brakes on combustion engines. This reduces replacement costs and the frequency of repairs.
- Extended service intervals: Electric vehicles can be serviced up to 30,000 km apart, compared with 15,000 to 20,000 km for internal combustion vehicles, reducing workshop visits and downtime.
- Specific, controlled maintenance: Some items still need attention, such as tyres (which are often put under greater strain because of the increased weight of EVs), brake fluid, battery coolant and windscreen washer fluid, as well as windscreen wipers and shock absorbers. The battery, the key component of the EV, is generally guaranteed for 8 to 10 years and requires no routine maintenance, although it is expensive to replace.
To sum up, the servicing and maintenance of electric vehicles offers a significant reduction in costs compared with combustion vehicles, thanks to simplified mechanics, fewer wearing parts and innovative braking technology. This is a key lever for fleet managers looking to control the TCO of their electric fleet.
Impact of grants and tax incentives on TCO
The impact of subsidies and tax incentives on the total cost of ownership (TCO) of electric vehicles is a major lever that fleet managers need to master as part of their energy transition strategy. These schemes have a direct and significant impact on the cost of acquisition, recurring tax charges and investment in recharging infrastructure.
Here are the main points to consider in 2025:
- Attractive tax breaks :
Fleets of 100% electric vehicles benefit from major exemptions such as the abolition of the annual tax on CO2 emissions (ex-TVS) and the annual tax on atmospheric pollutant emissions. These exemptions considerably reduce the recurring tax charges linked to vehicle ownership, with a positive impact on the TCO. - Abolition or maintenance of purchase subsidies :
Following recent reforms, certain forms of assistance such as the conversion bonus and certain local surcharges have been abolished. However, a new, more targeted aid framework has been introduced, with the ecological bonus transformed into an energy saving certificate (CEE) premium for new cars, subject to price and tax income conditions. For electric vehicles acquired before certain deadlines, the traditional ecological bonus remains partially applicable. - Exemption from vehicle registration tax :
In 2025, 100% electric vehicles will continue to be registered free of charge, reducing the initial cost and optimising the long-term profitability of the electric fleet. - Tax credit for charging infrastructure :
Installing a charging point at home or on site can qualify for a tax credit of €500 per connected point, reducing the costs associated with setting up the charging system, a significant item in the TCO of electric fleets. - Developments in systems :
Public support is tending to be refocused, with a reduced budget for 2025 compared with 2024, and a gradual reduction in direct aid, which is encouraging fleet managers to integrate this aid into an overall strategy combining cost optimisation, choice of suitable vehicles and anticipation of regulatory changes.
So, for a fleet manager, understanding and incorporating these tax breaks and incentives into the TCO calculation is essential to maximise savings and ensure the long-term use of electric vehicles within the fleet. These advantages need to be combined with savings on maintenance and fuel to achieve complete control over TCO.
How can you optimise the TCO of an electric fleet?
To control the total cost of ownership (TCO) of an electric fleet, it is essential to adopt a global and strategic approach. TCO is not limited to the purchase price of vehicles alone, but encompasses all the costs associated with their acquisition, use and maintenance over time. Optimising this cost therefore means taking action on a number of interdependent levers, from precise fleet sizing to advanced recharging solutions.
In this context, there are four key areas of focus for fleet managers wishing to maximise the profitability and performance of their electric fleets:
- Right-sizing the fleet according to actual usage to avoid costly overcapacity
- Choose the electric vehicle models best suited to your specific needs, taking into account criteria such asautonomyconsumption and power
- Deploy a recharging infrastructure capable of responding efficiently to day-to-day needs and minimising downtime
- Implement a smart charging strategy to control energy costs while optimising vehicle availability.
These levers combined can significantly reduce TCO, ensure sustainable fleet management and anticipate regulatory and technological developments. We will go into more detail on each of these points to guide you towards optimum control of the total cost of ownership of your electric fleet.
Right-sizing your fleet according to usage
To keep the total cost of ownership (TCO) of an electric fleet under control, it is essential to size the fleet according to how the vehicles will actually be used. This is crucial to avoid overcapacity or undercapacity in terms of the number and type of vehicles, which can quickly undermine overall profitability. Here are the key points to consider for optimal fleet sizing:
- Precise analysis of operational needs: A detailed audit must be carried out of the journeys made (distance, frequency, type of road), the profile of the drivers and the missions carried out in order to define what percentage of journeys can be covered by electric 100% vehicles. Each use (short urban distances, intercity journeys, field operations) requires a different type of vehicle.
- Segmentation of user profiles: Identifying different profiles in the fleet (sales staff, technicians, mobile managers, logistics vehicles) enables the selection of electric vehicles to be refined according to the range required and the functionalities needed.
- Balance between number and type of vehicles: adapt the size of the fleet and the diversity of models to meet demand precisely, taking into account recharging requirements in particular, in order to limit downtime and optimise the utilisation rate.
- Forecasting the ramp-up: Gradually integrate electric vehicles, taking into account infrastructure constraints (charging points, available power) and increasing regulatory obligations (LOM quotas), for a controlled transition without the additional costs associated with poor anticipation.
- Using fleet management data: Use fleet management software to obtain a reliable map of usage and regularly adjust the fleet in line with changing needs and technological innovations.
In short, precise, scalable sizing can maximise the use of electric vehicles, reduce unnecessary costs associated with under-utilised vehicles, and effectively control the TCO of the electric fleet.
Choosing the right electric vehicle models
To keep the total cost of ownership (TCO) of an electric fleet under control, choosing the right vehicle models is a crucial step that has a major impact on profitability and operational efficiency. Here are the key points to consider when selecting the most appropriate models for your fleet:
- Adapting the range to the real needs of the fleet: It is essential to choose vehicles whose range corresponds to the daily journeys made by employees. For example, for frequent urban journeys, city cars such as the Renault R5 (400 km WLTP range) or the Hyundai Inster (300 km) are ideal. For long or regional journeys, opt for models with extended range, such as the Tesla Model Y (455 km) or the BMW i5 Touring (506 km).
- Load capacity and interior space: The boot volume or space available is crucial, especially for commercial vehicles and companies that need to transport equipment or goods. Versatile, modular models like the Renault Scenic E-Tech or utilities such as Ford e-Transit are adapted to meet logistical requirements.
- Evaluate the power and availability of the recharging network: the possibility of rapid recharging and compatibility with local infrastructures means that vehicle downtime can be optimised. Models offering rapid recharging (80% in 30-35 minutes for Kia EV3 or MG4) facilitate operational management and reduce the indirect costs associated with downtime.
- Factor in the cost of acquisition and financial aid: The choice should take into account the purchase price, government aid, tax benefits and the overall budget allocated to the fleet. Models offering good value for money (MG4, Kia EV3, Renault R5) can offer an excellent compromise between initial investment and running costs.
- Consider on-board technologies and safety: Driving assistants, connectivity and integrated safety systems help to improve user comfort and safety, while optimising fleet management. This indirectly contributes to a reduction in costs linked to accidents and usage.
- Align the choice with the company's image and credibility: The vehicle contributes to the company's brand image and environmental responsibility, a significant factor in enhancing its image with customers and partners.
Deploying a suitable recharging infrastructure
To keep the total cost of ownership (TCO) of an electric fleet under control, deploying the right charging infrastructure is a crucial step in ensuring efficiency and budgetary control. Here are the key points to consider for optimum deployment:
- Precise analysis of requirements: assess the number of vehicles to be charged simultaneously, the length of time they will be parked each day, their mileage requirements and their charging capacity. This stage will enable you to correctly size the number of charging points and their power output to suit the fleet.
- Compliance with legal obligations: under the French Law on Mobility (LOM), companies with car parks with more than 10 spaces must pre-equip part of their spaces for charging and, since 2025, offer one charging point for every 20 spaces, with a minimum of 5% of spaces dedicated to charging. It is also compulsory to include spaces accessible to people with reduced mobility.
- Choice of charging points: depending on usage and charging profile (slow, accelerated or fast charging), select the right charging points to optimise charging time and energy consumption, thereby reducing operating costs.
- Installation and supervision: leave the installation to certified experts (IRVE qualification) to guarantee quality and compliance. An intelligent supervision solution can be used to monitor electricity consumption and the status of the charging points, and to manage the invoicing of users (employees, customers) for recharging.
- Optimising energy costs: consider energy management systems that limit the power used at peak times and make the most of off-peak times to recharge, helping to lower energy bills and improve TCO.
- Support and subsidies: take advantage of subsidies such as the Advenir programme, which finances part of the installation costs for collective company infrastructures, thereby reducing the initial investment.
In short, a well-designed recharging infrastructure that complies with regulatory constraints and is based on detailed management of needs and consumption is an essential lever for optimising the total cost of ownership of an electric fleet.
Implementing a smart charging strategy
To control the total cost of ownership (TCO) of an electric fleet, implementing a smart charging strategy is essential. Smart charging optimises energy consumption by adapting the charging of electric vehicles to the capacity of the network and actual needs, significantly reducing electricity and infrastructure costs.
Here are the key points for effectively integrating smart charging into fleet management:
- Dynamic load management: Recharging is modulated in real time according to the site's overall energy demand and available capacity, avoiding costly consumption peaks and overloads that could lead to penalties or additional investment in the network.
- Off-peak charging: By scheduling charging mainly during off-peak hours, when electricity rates are lower, the fleet benefits from substantial savings on energy bills.
- Prioritisation according to operational needs: The system adjusts recharging speed and timing according to vehicle mission constraints, guaranteeing vehicle availability while maximising the use of available power.
- Integration of renewable energies: smart charging can synchronise charging with on-site solar or wind power generation, increasing self-consumption and reducing energy consumption.carbon footprint of the fleet.
- Remote monitoring and control: A cloud platform centralises charging data to enable fleet managers to supervise, analyse and adjust charging programmes in real time, ensuring performance and cost control.
In short, adopting an intelligent recharging strategy not only makes it possible to smooth out energy consumption and avoid the costs associated with peaks in demand, but also to improve the sustainability and operational reliability of electric fleets. This approach is an essential strategic lever for optimising TCO in the transition to electric vehicles.
What tools and indicators should be used to manage the TCO of electricity?
To effectively manage the total cost of ownership (TCO) of a fleet of electric vehicles, it is essential to use tools and indicators that are precise and tailored to this specific situation. Precise management of the TCO of electric vehicles is based on the collection, processing and analysis of a wide range of data, combining technology, operational performance and environmental responsibility.
Dashboards and fleet management software
To control the total cost of ownership (TCO) of an electric fleet, dashboards and fleet management software are essential tools. These technological solutions provide real-time visibility and accurate data on all electric vehicles, their usage and associated costs.
Here are the main functions and benefits to be exploited:
- Detailed, centralised monitoring: recording of key data such as registrations, models, mileage, maintenance status, energy consumption and usage history. This centralisation facilitates macro and micro analysis of TCO.
- Real-time visualisation: instant access to vehicle status, remaining range, charge level and recharging data, optimising planning and avoiding unforeseen events.
- Predictive management and planning: scheduling automatic maintenance and overhauls, anticipating future costs and helping to plan the energy transition.
- Behavioural analysis: monitoring driving behaviour to reduce fuel consumption and wear and tear on vehicles, helping to cut operating costs.
- Optimising resources: Intelligent allocation of vehicles and charging points, coordination of charging times to reduce energy costs and maximise vehicle availability.
- EV-specific indicators: precise measurements of electricity consumption, CO₂ emissions, and energy costs, essential for effective management of electrified fleets.
- Customisable reports and alerts: Set up automatic alerts to warn of anomalies, maintenance delays or budget overruns, making it easy to react quickly.
- Transition support: Some software packages include decision-making tools to help you choose the best ways to integrate electric vehicles into your fleet, and monitor the impact on CSR (Corporate Social Responsibility).
One of the best-known solutions is Beev Fleet Manager, which combines these advanced functions to provide precise management of TCO and energy performance for both small and large fleets.
Analysis of driving and charging data
To control the total cost of ownership (TCO) of a fleet of electric vehicles, it is essential to analyse driving and recharging data. This data can be used to optimise the use of vehicles and the management of recharging infrastructure, thereby reducing operating costs.
Here are the key points to consider:
- Precise collection of driving data: average speed, journey times, start-stop cycles, actual energy consumption. These indicators are essential for identifying usage profiles, adapting the fleet to real needs and improving energy efficiency.
- Analysis of charging data: charging time, power delivered, frequency and location of charging, detection of inefficient behaviour such as the "suction car" (vehicle remaining connected after full charge). This monitoring means that recharging sessions can be better distributed, energy losses avoided and vehicle availability maximised.
- Optimised energy efficiency: by cross-referencing driving and recharging data, it is possible to implement intelligent recharging strategies (dynamic power management) that reduce energy costs and minimise battery wear and tear.
- Data-driven predictive maintenance: continuous monitoring of performance indicators and anomalies detected in recharge and operating data helps to anticipate breakdowns, enabling proactive maintenance that reduces repair costs and downtime.
- Personalisation and real-time management: data analysis makes it easier to adapt services to drivers' specific needs (pricing, access to terminals, timetables), thereby improving overall satisfaction and productivity.
To sum up, detailed analysis of driving and recharging data is a strategic tool for a fleet manager wishing to optimise electric TCO, by improving performance, availability and control of energy and maintenance costs.
Environmental and financial reporting
Environmental and financial reporting is an essential lever for controlling the total cost of ownership (TCO) of electric fleets. It involves integrating precise tools and indicators to monitor the ecological and economic impact of electric vehicles within the company, in line with growing regulatory requirements, in particular the CSRD directive. For a fleet manager, this translates into several key areas:
- Measuring greenhouse gas (GHG) emissions :
Tracking emissions from scopes 1 (direct emissions), 2 (indirect emissions linked to energy consumption) and 3 (other indirect emissions, particularly in the supply chain) enables us to accurately assess the fleet's environmental performance and identify ways of reducing emissions through electrification. - Collection and consolidation of energy consumption data and associated costs:
Detailed monitoring of electrical usage, recharging and maintenance costs makes it easier to compare internal combustion and electric vehicles, so as to optimise purchasing and usage decisions, with a direct impact on TCO. - Alignment with ESG requirements and the CSRD :
Reporting must include mandatory ESG indicators in order to comply with increasing regulatory transparency (from 2024 for large companies), particularly with regard to the energy mix and the proportion of EVs in the fleet. - Use of dedicated digital tools:
AI-supported fleet management platforms automate data collection, emissions calculation and accurate reporting, simplifying decision-making and financial management. - Vehicle environmental score :
Taking into account criteria such as consumption, manufacture and recyclability, which influence financial aid and tax mechanisms (ecological bonus, reductions in benefits in kind), is essential to optimise TCO.
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What best practices can you adopt to reduce TCO on a long-term basis?
To keep the total cost of ownership (TCO) of a fleet of electric vehicles under control over the long term, it is essential to adopt strategic and operational best practice. These optimisation levers not only reduce operating costs, but also maximise the fleet's economic and environmental value. Success requires a comprehensive approach that includes driver training, careful anticipation of the vehicle life cycle, and rigorous monitoring of costs to adjust management as closely as possible to the realities on the ground.
Training drivers in electric eco-driving
To keep the total cost of ownership (TCO) of electric vehicles under control over the long term, it is essential to train drivers in electric eco-driving. This specific training helps to optimise the use of vehicles while reducing energy consumption and associated maintenance costs.
Here are the key areas to include in this approach, as part of best practice for reducing TCO :
- Raising awareness of the specific features of electric vehicles:
Understand how batteries work, and the impact of acceleration, regenerative braking and environmental conditions on range. This knowledge enables drivers to adapt their driving to maximise battery life. - Adoption of appropriate eco-driving techniques:
Learn to control acceleration and deceleration, maintain a moderate speed, anticipate traffic to limit sudden braking, and manage energy recovery during braking. These techniques significantly reduce electricity consumption. - Practical experience through supervised driving sessions:
Combining theory and practical workshops, drivers experiment with different driving styles. They benefit from personalised coaching to correct energy-guzzling habits and make rapid progress. - Monitoring and evaluation of progress :
Regularly measuring energy consumption and actual autonomy enables good practice to be promoted and training to be adjusted on an ongoing basis. On-board monitoring tools can make this easier. - Impact on TCO :
Optimised driving reduces the frequency of loads, wear and tear on components, and the need for costly repairs, all contributing to a controlled TCO over the long term.
By systematically training drivers in these methods, the fleet manager has a direct impact on the operational efficiency of his electric fleet, with a visible reduction in costs and an improvement in vehicle durability. This approach is essential good practice for any sustainable and economical fleet manager.
Regularly reassess TCO to adjust strategy
To keep the total cost of ownership (TCO) of your electric fleet under control over the long term, it is crucial to regularly reassess this TCO in order to adjust your management strategy. This proactive approach enables you to remain agile in the face of technological, economic and regulatory developments. Here are the best practices to adopt:
- Update calculation parameters frequently: Incorporate new costs linked to changes in electricity prices, actual vehicle consumption, and any changes to grants and tax incentives.
- Analyse actual vehicle usage: Use telematics data and fleet monitoring tools to accurately measure consumption, mileage and maintenance. This enables you to identify optimisation levers and adjust replacement or maintenance cycles.
- Track changes in servicing and maintenance costs: electric vehicles have a specific servicing profile (battery, software, charging points), and costs can change over time and with use.
- Reassess supplier agreements and leasing contracts: Leasing conditions, energy supplier rates and insurance contracts should be regularly renegotiated to optimise expenditure.
- Incorporate the results into the renewal strategy: Using the updated data, adjust the timing of vehicle renewal, model selection and the split between electric and combustion vehicles if necessary.
- Anticipating regulatory and tax changes: These factors have a direct impact on TCO and must be taken into account in the periodic review to maintain a clear view of the total cost.
Regular, rigorous reassessment of the TCO ensures optimised, sustainable fleet management, reinforcing cost control and the overall performance of your electrical strategy..
Conclusion
In conclusion, the transition to electric vehicle (EV) fleets represents a strategic and profitable investment for fleet managers. Although the initial acquisition cost of EVs may be higher than that of combustion-powered vehicles, this difference is more than offset by significantly lower operating and maintenance costs.
Calculating the total cost of ownership (TCO) is the key indicator for assessing the economic performance of an electric fleet. TCO includes not only the purchase price, but also the substantial savings made on energy, maintenance (fewer mechanical parts, regenerative braking) and tax incentives (tax exemptions, ecological bonuses).
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