EV Fleet Financing Options and Strategies

Fleet electrification is more than a trend—it’s a transformative strategy that can yield significant savings on fuel and drastically reduce your organization’s carbon footprint. However, the path to a fully electric fleet requires strategic financial planning to optimize your fleet management plan as well as the return on our investment (ROI).

To determine the best financing option for your electric vehicle (EV) fleet, you need to understand what your financing options are, the benefits and expenses that contribute to your total cost of ownership (TCO), and cost optimization strategies that will power your fleet into a sustainable future.

In this article, we will discuss various EV fleet financing options and strategies for you to consider as you drive your organization toward a more resilient future with enhanced operations, cost savings, and increased oversight for your fleet vehicles.

Understanding Financing Options

With the declining prices of EV batteries and a growing number of incentives available, purchasing EVs for your company is becoming a reality that many more businesses and fleet managers can consider for their company. The electric vehicle models you select along with the financing package you choose are two of the most important factors that will determine the bottom-line cost of transitioning your fleet to electric vehicles.

EV Fleet Financing Options

Purchasing electric vehicles will be one of the highest upfront costs when it comes to building your fleet. Along with this, the cost of operating EV charging infrastructure and being responsible for maintaining fleet assets will also add an additional expense, but having full ownership of the vehicles and infrastructure allows you to build equity and gives you more control. Additionally, while the upfront expenses can be more expensive than a gas-powered fleet, EVs will help you build long-term savings on fuel and maintenance, with thousands of dollars in savings per vehicle over its lifespan.

Leasing fleet EVs can also be a good option for lower monthly costs, fewer risks, and scalability. Lease contracts often include maintenance and allow you to replace fleet vehicles with newer models after a few years. However, the drawbacks of leasing include mileage limits as well as strict terms, and you would not have ownership or total control of the vehicles. Additionally, the money spent on leasing these vehicles will not be an investment that provides you with a long-term asset of vehicle ownership.

Another option to consider could be subscriptions to vehicles where your business pays a monthly fee to access EVs and a managed charging infrastructure, which significantly reduces costs. Limitations are similar to leasing contracts in terms of mileage limits, terms, and ownership, and you will also be unlikely to add any company branding or personalization to these vehicles. Additionally, you may not have guaranteed access to vehicles at all times, depending on the type of subscription, and there may be a reduction in telematics and fleet management software you are able to utilize with these vehicles.

EV Fleet Financing Incentives

While the upfront cost of electrifying your fleet might seem quite steep, your organization can leverage the incentives available to drastically reduce the cost of acquiring new vehicles and make EV fleet financing more accessible.

These incentives exist at the federal, state, local, and utility levels, and certain manufacturers will also offer added benefits for their product lines such as savings on EV charger installations, free charging stations, and other perks.

Some EV models qualify for a federal tax credit of up to $7,500 at the time of purchase, and you can get up to $40,000 for medium- to heavy-duty electric vehicles through the Qualified Commercial Clean Vehicle tax credit. In addition, you can claim a 6% tax credit on your charging infrastructure.

Additional incentives at the state and utility levels include tax credits, sales tax exemptions, rebates, and more. Before proceeding with fleet electrification, explore EV charging rebates and tax credits and determine which requirements you must meet to qualify as some incentives and rebates will have certain installation requirements or other similar mandates.

Financial Analysis and Cost-Benefit Assessment

A TCO analysis can help you compare the actual long-term cost of operating EVs compared to gas-powered vehicles by allowing you to look beyond the initial purchase price of electric fleet vehicles, monthly leasing, or subscription costs and into the cost and benefits of the vehicle based on your company mileage, vehicle lifespan, charging methods, and other considerations.

One benefit of driving electric is cost savings for fuel by investing in your own charging network, whether you build a central charging hub or deploy electric car charging at home for fleets. While investing in charging infrastructure does come with initial and ongoing costs, including purchasing and maintaining chargers, the savings add up rapidly. With EVs getting three to four miles of range per kWh, the average electrical rate of $0.17 per kWh translates into costs of $0.04 to $0.05 per mile.

Incorporating a renewable energy strategy into your EV charging infrastructure can further increase these savings by reducing your reliance on the electric grid and kWh prices set by the utility. This can be especially beneficial in areas where your utility practices time-of-use rates and charges more for electricity when demand is highest—especially if this is the same time your vehicles will likely be recharging.

Some states do require EV-specific registration and insurance, which can also add an additional expense, so it’s important to review the rules and regulations for EVs where your company is based and where the vehicles will be stored.

Non-Quantifiable Benefits

Conducting a full cost-benefit assessment for an EV fleet can be challenging because not all benefits are directly quantifiable.

Going electric will reduce your fleet’s greenhouse gas emissions, contributing to better air quality and may lead to fewer respiratory health problems for your community.

Electric fleet vehicles are also good for your brand image and ESG goals, and they can help support employee satisfaction by making your mission feel more meaningful and attract more customers or partners who share your values.

Plus, government regulations are increasingly pushing for the adoption of electric fleets. For instance, California now requires fleets with annual revenues of over $50 million to develop an electrification plan. Getting a head start on compliance requirements will give you an advantage over the competition.

Strategies for Cost Optimization and Funding Sources

Cost optimization methods include a combination of maximizing savings and reducing fleet TCO.

Bulk purchasing for fleet vehicles and commercial EV charging installation can save money by giving you greater leverage to negotiate discounts. You can also take advantage of existing relationships with suppliers to get lower prices.

Fleet management solutions are another area to explore. Because they have more sensors than ICE vehicles, EVs are better at gathering and sharing valuable insights. Adopting a fleet management solution allows you to derive value from this data through optimized routes, charging planning, and improved visibility over your fleet operations.

Due to the growing interest in fleet electrification, more lenders are offering specialized products with discounts for going electric, so be sure to shop around to ensure you get the best offer that still fits your needs.

Ultimately, your financial plan should align with your budget and sustainability goals.

Fleet Electrification Planning with Qmerit

EV fleet financing options include outright purchases, leasing, and subscription-based models. While outright purchases give you more control over fleet assets, leasing- and subscription-based options can lower the upfront cost of electrification and simplify your vehicle maintenance.

It is crucial to conduct a thorough financial analysis and cost-benefit assessment, as well as calculate your eligible incentives to make the best decision possible. The right electrification partner can help you explore financing options and plan a successful fleet electrification from start to finish.

Qmerit simplifies fleet electrification by helping fleets overcome the complexities of installation. We provide a simple and seamless installation experience with top-quality service you can trust, helping fleets budget and control costs while tracking every step of the process.

With the largest and most trusted network of certified EV charger installers across the U.S. and Canada, all Qmerit electricians are fully licensed, background-checked, insured, and vetted to ensure you can rest easy in knowing your investment and your drivers are protected.

We understand that electrifying your fleet is a big project, and we’ll work with you to ensure your drivers have the same safe, high-quality EV charger installation experience that’s helped us earn our reputation as the most recommended EV charger installation network in North America. See how Qmerit’s expert team is ready to make your fleet EV charging installation easy, with guaranteed satisfaction and support through our Fleet Electrification Services.

If you want help determining your EV upfront costs and long-term savings to calculate the ROI if you electrify your fleet and are interested in transitioning to a distributed electric fleet, contact us today to learn more about our fleet EV charging solutions.