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Project Brief: Fleet Vehicle Selection and Comprehensive Risk Analysis
This assignment presents a real-world management scenario where the data is incomplete or
uncertain, requiring you to apply your engineering expertise to make an informed decision. Your task
is to assess and recommend the most suitable vehicle type—Electric Vehicle (EV) or Petrol—for a fleet
of 10 maintenance engineers operating from a base in Liverpool.
The vehicles in question belong to the C-segment of European passenger cars, also known as
"medium-sized cars" or "compact cars" in the U.S. Your decision should be based on an analysis of
operating cost, the total cost of ownership, and environmental impact, using the data provided (based
on VW ID3 and VW Golf Hatch) and any additional information you wish to include.
You should submit:
1. A report in six sections which answer the six questions below.
2. An Excel spreadsheet containing cost model, cash-flow analysis, and the calculations or
simulation used to answer question on quantitative risk assessment.
Questions:
1. Technology assessment: Undertake a brief assessment of the current state of EV car battery
technology and how it is likely to evolve over the next 5 years focusing on: innovation, reductions
in cost, reliability, and range.

2. Cost Analysis: Use the data provided to: (i) Model the operating cost of each vehicle type over a
4-year period, include service and maintenance, and fuel/charging costs. (ii) Estimate the total
cost of ownership for both vehicle types over 4 years using a cash flow analysis. Include for
example the purchase and financing costs, operating costs, and resale revenue. This analysis
should be conducted in Excel using a discount rate of 7%.

3. Model the impact of variable uncertainty on the difference in total ownership cost between the
two vehicle types. Consider factors like annual travel distance, journey profile, fuel/charging
prices, maintenance, and depreciation. Assess cost variability and risk over the 4-year ownership
period.

4. Qualitative risk assessment of vehicle choice: (i) Identify and evaluate non-quantifiable risks, such
as future regulations, technology changes, supply chain disruptions, and user acceptance. (ii) Rank
these risks by likelihood and impact on fleet operations and business performance.

5. Environmental: Evaluate the CO2e footprint of each vehicle type over the 4-year operating period.
Compare in general terms, the overall carbon footprint of Electric Vehicles (EVs) versus Petrol
vehicles across their entire life cycle.

6. Compare the costs, environmental impact, and risk profiles of the two vehicles. Recommend to
management the most suitable vehicle type for the fleet based on your analysis, providing a clear
justification that integrates both cost and risk considerations.

7. Identify and explain key contract law principles that must be considered when negotiating
contracts with the vehicle supplier, including warranties, liabilities, and service agreements. How
might these impact the overall vehicle procurement and fleet operation? 3. Data section

(a) Purchase and operating costs
Purchase and maintenance costs
Electric vehicle (medium sized 5dr hatch)
Purchase cost £ 37,500.0
Service cost (every 30,000 km) £ 370.0
Tyres cost (every 40,000 km) £ 360.0

Petrol vehicle (medium sized 5dr hatch)
Purchase cost £ 31,000.0
Minor service (every 10,000 km) £ 150.0
Major service (every 30,000 km) £ 230.0
Tyres (every 40,000 km) £ 360.0

Financing
Deposit required 30%
Annual interest rate 5.9%
Discount rate applied by the company 7%

Estimated vehicle
depreciation EV Petrol
Year
Vehicle value as
% of initial price
Vehicle value as a
% of initial price
0 100 100
1 80 95
2 60 90
3 45 85
4 40 70

(b) Journey profiles

Mean annual distance driven Mean Standard
deviation
Mean annual distance (km) 16,093 1000

Journey profile (% distance spent in each driving condition) Mean

Standard
deviation
City 34% 10%
Main roads 31% 10%
Motorway/Dual Carriageway 35% 10%

(c) Electric Vehicle
Energy consumption (Mild weather 23 C) kWh/100km
City 11.40
Main roads 15.30
Motorway/Dual Carriageway 19.90

Energy consumption (Cold weather 0 C) kWh/100km
City 17.1
Main roads 19.6
Motorway/Dual Carriageway 23.1
`
Current cost of electricity charging £/kWh
City £ 0.30
Main roads £ 0.77
Motorway/Dual Carriageway £ 0.53
% of energy purchased from each location

Annual % increase in the cost of electricity charging
Max Min Most likely
City 10% 1% 2.50%
Main roads 10% 1% 3.00%
Motorway/Dual Carriageway 10% 1% 3.00%

(d) Petrol Vehicle
Energy consumption values (Petrol) l/100km
City 7.24
Main roads 5.59
Motorway/Dual Carriageway 4.89

Cost of petrol £/l
Petrol (average) £ 1.4

Annual % price change (energy)
Max Min Most likely
Petrol 5% 1% 2.50%

Guidance covering the suggested content and grading criteria for each objective
Questions Assignment objectives Good
50+
Very good
60+
Exceptional
70 +
Q1 Technology
assessment.

(Use a maximum of
250-300 words for this
section excluding any
Appendices).

20 marks

A brief assessment of the
current state of EV car
battery technology and
how it is likely to evolve
over the next 5 years
focusing on: innovation,
reductions in cost,
reliability, and range.
A reasonable understanding of EV
technology trends. Limited
discussion on cost reductions,
reliability, and range
improvements, with few specific
examples or evidence.
Surface analysis with general
statements. Limited detail on
how technological advancements
will impact cost, reliability, or
range.
Good understanding of EV
technology trends. Discusses cost
reductions and improvements in
reliability and range with some
specific examples or evidence. A
solid analysis with clear
connections between technological
advancements and expected
outcomes in cost, reliability, and
range. Some insights into the
impact on the EV market.
Comprehensive understanding of EV
technology trends. Provides detailed
discussion on expected cost reductions
and significant improvements in
reliability and range, supported by
specific examples and evidence.
In-depth analysis with clear, logical
connections between technological
advancements and their impact. Strong
insights into how these changes will
drive wider EV adoption and reshape the
market.
Q2 Cost Analysis

20 marks
Use of data to: (i) Estimate
the total cost of each
vehicle type over a 4-year
period, including purchase
costs, service and
maintenance, and
fuel/charging costs. (ii)
Present the results for
each vehicle type as a
cashflow.

Basic estimation of total cost of
ownership with some errors or
omissions. Simple comparison of
running costs. Basic cash flow
provided but may be
disorganised or difficult to
interpret. Lacks visual clarity.
Minimal interpretation of results
with little insight into
implications or decision-making.

Good estimation of total cost of
ownership. Assumptions are mostly
clear and reasonable. Accurate
comparison of running costs with
an analysis of potential savings.
Methodology is mostly logical.
Organised cash flow with some
visual representation. Solid
interpretation of results with some
insights into financial implications
and decision-making.
Excellent estimation of total cost of
ownership, including all relevant factors.
Assumptions are well-justified and
clearly explained. Thorough and
accurate comparison of running costs,
with a detailed analysis of potential
savings. Methodology is logical and easy
to follow. Detailed and well-organised
cash flow with clear visual aids (e.g.,
tables, charts). Presentation is
professional and easy to interpret.
Insightful interpretation of results, with
strong analysis and well-considered
recommendations for decision-making.

Impact of variable
uncertainty

10 marks
Model the impact of
variable uncertainty on
the difference in total
ownership cost between
the two vehicle types.
Consider factors like
annual travel distance,
journey profile,
fuel/charging prices,
maintenance, and
depreciation. Assess cost
variability and risk over
the 4-year ownership
period.
Reasonable attempt at modelling
and assessing the impact of
uncertainty but it may contain
errors or lack detail in exploring
the range of outcomes or
probability distribution. Some
analysis of risk, with a basic
discussion of cost variability.
Conducts a reasonable attempt at
modelling uncertainty with a clear
range of outcomes. Methodology is
reasonably accurate. Provides a
solid analysis of risk, discussing cost
variability. Offers some insights
into the financial risk associated
with each vehicle type.
Executes a detailed and accurate
modelling, exploring a comprehensive
range of possible outcomes. The
methodology is robust and clearly
presented. In-depth analysis of risk, with
a detailed understanding of cost
variability. Provides strong insights into
the risk profiles of different vehicle
types and their implications for decisionmaking.

Q4. Qualitative Risk
Assessment

10 marks
Qualitative risk
assessment of vehicle
choice: (i) Identify and
evaluate non-quantifiable
risks, such as future
regulations, technology
changes, supply chain
disruptions, and user
acceptance. (ii) Rank these
risks by likelihood and
impact on fleet operations
and business
performance.
A basic qualitative assessment of
non-quantifiable risks, including
future regulations, technological
changes, supply chain
disruptions, and user acceptance.
The identification of risks may be
somewhat superficial, with
limited detailed analysis. While
risks are recognised, they may
not be thoroughly assessed. The
impact and likelihood of risks are
described in general terms,
lacking specific examples or indepth
analysis. A simple ranking
of with limited justification or
explanation for the assigned
rankings.

Qualitative Risk Assessment:
Performs a solid qualitative risk
assessment, identifying and
evaluating key non-quantifiable
risks such as future regulations,
technological changes, supply chain
disruptions, and user acceptance.
The analysis is detailed and
thorough.
Risks are assessed with clear
descriptions of their potential
impact and likelihood, supported
by specific examples or data where
applicable.
A logical ranking of risks based on
their likelihood and potential
impact. The rankings are generally
well-justified, with explanations.
A comprehensive qualitative risk
assessment, thoroughly identifying and
evaluating non-quantifiable risks such as
future regulations, technological
advancements, supply chain disruptions,
and user acceptance. The assessment is
detailed and well-supported by relevant
examples. An in-depth evaluation of
each risk, offering insightful analysis of
their potential impacts and likelihood.
The analysis is enriched with specific
examples and reflects a strong
understanding of the risks involved.
Provides a well-structured and logical
ranking of risks based on their likelihood
and potential impact.

Q5. Environmental
Impact

10 marks
Evaluate the CO2e
footprint of each vehicle
type over the 4-year
operating period.
Compare in general terms,
the overall carbon
footprint of Electric
Vehicles (EVs) versus
Petrol vehicles across their
entire life cycle.
An assessment of the CO2e
footprint, with consideration of
emissions. The analysis may lack
depth, and the data used may be
general or not well-explained.
Demonstrates an understanding
of the key concepts.
A thorough evaluation of the CO2e
footprint. The analysis is largely
accurate, supported by specific
data or examples. A strong
understanding of the concept of
cradle-to-grave carbon footprint,
including the CO2e produced
during use with clear and detailed
explanations.
A detailed evaluation of the CO2e
footprint. The analysis is well-supported
by specific data, examples, and a robust
comparison between vehicle types. It
demonstrates an in-depth
understanding of the cradle-to-grave
carbon footprint.

Q6. Recommendation

10 marks

Compare the costs,
environmental impact,
and risk profiles of the two
vehicles. Recommend to
management the most
suitable vehicle type for
the fleet based on your
analysis, providing a clear
justification that
integrates both cost and
risk considerations.
Delivers a simple
recommendation for the most
suitable vehicle type, with
minimal justification. The
recommendation may not fully
integrate cost and risk
considerations.
Presents a well-reasoned
recommendation for the most
suitable vehicle type, integrating
both cost and risk considerations.
The justification is clear and
effectively supports the choice.
Delivers a well-justified
recommendation for the most suitable
vehicle type, integrating considerations
of cost, environmental impact, and risk.
The rationale is clear, persuasive, and
grounded in thorough analysis.
Q7. Contract law

20 marks

Identify and explain key
contract law principles
that must be considered
when negotiating
contracts with the vehicle
supplier, including
warranties, liabilities, and
service agreements. How
might these impact the
overall vehicle
procurement and fleet
operation
Comprehensive explanation of
contract law principles.
Thorough, clear, and accurate
description of warranties,
liabilities, service agreements,
and payment terms.
Demonstrates deep
understanding of how these
principles apply to procurement.
Good understanding of contract
law principles. Descriptions are
mostly accurate but may lack depth
or detail. Solid understanding of
how key contract terms relate to
procurement.
Basic understanding of contract law
principles. Limited or vague explanations
of warranties, liabilities, and service
agreements. Some application to vehicle
procurement is evident but not fully
developed.