INSIGHTS
Incorporating electric and hybrid cars into your business travel program
Electric vehicles (EV) and hybrid-electric vehicles have become increasingly common on our roads, with many drivers opting for these eco-friendly alternatives. But how is the EV-trend impacting business travel? As companies strive to meet sustainability goals, the integration of electric cars into business travel programs is a hot topic for corporate travel buyers.
A global perspective on EVs
In 2023, electric car sales reached nearly 14 million units worldwide, accounting for almost one in five cars sold. However, 95% of these sales were concentrated within China (25% of vehicles sold), Europe (14%) and the United States (7%). Even within these regions, the pace of adoption is still uneven. California, for instance, boasts a 20% EV adoption rate, with other U.S. states trailing behind.
The growth in EV sales suggests that the infrastructure and technology are maturing but there are still challenges. Obstacles to growth include vehicle production, development of public charging infrastructure, and the overall customer experience for electric vehicles vs. traditional cars.
Additionally, as of now, the cost is higher for electric cars than their petrol-powered rivals. However, some regions of the world offer government incentives to prioritise EVs. In Norway, where EVs make up over 90% of new car sales, benefits like reduced company car taxes, reduced tolls and parking fees, and bus lane access have driven widespread adoption.
Adapting corporate travel policies for electric cars
The question of including EVs in travel policies is no longer if, but how. But this transition comes with its own set of challenges.
Availability: Major car rental companies have added EVs to their fleets. Enterprise, a preferred partner for many corporate travel programs, has been at the forefront of this shift. The company is focusing on putting its electric fleet in locations where EVs are already becoming a popular option in order to increase adoption, and they’re working to ensure that infrastructure is in place for support and charging.
However, it’s an uphill battle at this point, with other car rental companies recently announcing cutbacks in EV fleets due to lower demand and higher maintenance and repair costs.
In addition, the availability of electric cars can vary significantly depending on the location.
Urban centres and popular business destinations are more likely to have a good selection of EVs, while smaller cities or rural areas may have limited options.
Next steps: Research the prevalence of services in your most frequent business travel locations, then consider partnering with providers that offer EV options. You could potentially negotiate guaranteed availability for key routes or destinations. Get feedback from your travellers on their experiences with EV taxis, ride-hailing services, and chauffeurs, and address concerns as needed.
Battery charging and electric range anxiety
One of the most significant concerns for business travellers using EVs is the availability of charging. While charging networks are expanding rapidly, coverage can be inconsistent, especially in less urban areas.
At GBTA Convention 2024 in Atlanta, one travel manager from a leading biopharmaceutical company explained that they analysed the mileage of each electric car rental with their rental car partner. They found that the majority of travellers never needed to recharge during their tip due to the short distances driven. Adjustments were made to the policy stating that travellers did not need to worry about bringing the car back with a full charge. This helped EV adoption, by saving travellers time and easing their range anxiety, which contributed to corporate sustainability goals.
Next steps: Travel program managers should provide resources on locating charging stations, such as mobile apps or websites that map charging locations. Travel policies can include guidelines on reimbursement for charging costs, which may require different processes than traditional fuel reimbursement.
For longer trips, travel plans may need to factor in charging time, which could impact scheduling and productivity. A preference for hybrid-electric vehicles may also be a good inclusion for longer journeys, as the primary electric power is supported and backed up by a petrol engine.
Cost: short-term expenses vs. long-term benefits
While EVs often have lower operational costs, rental rates can be higher than rental cars with conventional engines.
Next steps: Your considerations here are similar to car rentals. Compare rates between traditional and EV taxi/chauffeur services, but be sure to factor in the potential long-term savings and consider your corporate sustainability goals. Travel buyers should undertake a cost-benefit analysis that takes numerous factors into account, including:
- Potentially higher daily rental rates for EVs
- Lower fuel costs, which can offset higher rental prices depending on trip length
- Incentives or discounts from rental companies for choosing EVs
- Long-term benefits of meeting corporate sustainability goals
User familiarity and risk management
For many business travellers, driving an EV might be a new experience, particularly in countries where the EV sales market hasn’t fully taken off. This unfamiliarity can lead to concerns about how to drive them, safety, liability if something goes wrong.
Next steps: Here’s how to address this with travellers:
- Provide brief training or orientation materials for employees who opt for EVs. Your preferred car rental partner may be able to help.
- Develop clear guidelines for what to do when the car runs out of charge, or available charging stations are down.
- Ensure that insurance policies adequately cover electric car rentals.
Electric car booking and reporting
Being able to properly book, expense, and report on electric car usage is very important. EV-specific information, like range and charging requirements, should be included in trip planning resources.
Next steps: Work with your travel management company (TMCs) to integrate EV taxi and chauffeur initiatives into your program, and track electric car usage for expense management and reporting towards your sustainability goals.
Managing the environmental impact of EV batteries
While EVs reduce carbon emissions, their batteries pose environmental challenges if improperly disposed of. Lithium-ion batteries contain heavy metals and other toxins that may leak into soil and groundwater. Globally, only about 5% of EV batteries are currently recycled, with the majority destined for landfills. Most EV batteries last 8–12 years, or 160,000–320,000 kilometres, but may wear faster in extreme conditions, such as through aggressive driving or frequent fast charging.
Despite these concerns, electric vehicles still have a lower environmental impact than traditional gas-powered cars, which continually release carbon emissions throughout their life cycle.
Next steps: Educate travellers on battery-friendly habits, such as:
- Accelerating gently and avoiding “testing out” the EV’s instant torque, which can put undue strain on the battery.
- Parking in garages or shaded areas to maintain more stable temperatures and avoid rapid battery wear.
- Following manufacturer’s charging recommendations (most EVs operate best when charged to around 80% rather than a full charge).
- Daily Level 2 charging is ideal for maintaining battery health, while DC fast charging should be used sparingly.
Hotels like Marriott International and Hyatt offer complimentary Level 2 chargers at thousands of properties worldwide. Marriott, for example, signed a deal with EV Connect in 2023 to support sustainable EV charging at 6000 locations worldwide, including in the U.S., France, and Australia.
EVs in other transport services
Taxis and chauffeur services, often used for shorter trips or airport transfers, present another opportunity to incorporate electric and hybrid vehicles into business travel programs. The adoption of electric cars in chauffeur, taxi, and ride-hailing services has been gaining momentum in many urban centres worldwide. Major players in the industry, such as Uber, have announced plans to transition to 100% electric vehicles in the United States, Canada, and major European markets by 2030.
Many public transit options such as rail and buses are also electric or hybrid-electric, with the benefit of carrying many travellers vs. one or two. This can yield savings and reduce traveller stress by eliminating factors like electric car unfamiliarity, range anxiety, and stress over city driving.
Next steps: Consider which sustainable ground transportation options are there for travellers who don’t rent a car.
Driving towards sustainable business travel
The integration of electric vehicles into business travel programs is assisting businesses in finding ways to reduce their carbon footprint while meeting the diverse needs of travelling employees.
While challenges remain, the potential benefits in environmental impact, savings, and corporate image are significant. For travel buyers and corporate decision makers, the key lies in staying informed about the rapidly evolving EV landscape, remaining flexible in policy implementation, and being willing to innovate.
Build these considerations and education into your policies to improve traveller adoption. Travellers may come to appreciate the smooth, quiet ride offered by an electric vehicle after a long, stressful flight.