Fleets switch away from ‘dirty diesels’ may be misplaced and costly, suggests new research

New research reveals that fleets are abandoning diesel as the ‘fuel of choice’, but the switch may well be “misplaced” with today’s sophisticated engines more environmentally-friendly and cost-effective than petrol-engine equivalents.

Negative media coverage about so-called ‘dirty-diesels’ has led to businesses debating their next vehicle choice, according to the research by RAC Business.

In a survey of 1,000 UK firms, it discovered that 62% of large businesses with between 250 and 499 staff were considering phasing out their diesel vehicles, compared to 33% among small firms with less than 10 employees. Additionally, nearly half (47%) of businesses of any size said they were thinking about moving away from diesel.

The survey was published as new car registrations data published by the Society of Motor Manufacturers and Traders (SMMT) revealed that diesel demand slumped 17.1% in 2017.

The SMMT blamed the fall on a combination of factors including what it called “anti-diesel rehetoric”; and confusing government fiscal policy. There has also been a move away from diesel in light of the 2015 ‘dieselgate’ emissions cheating scandal.

But, added the SMMT: “These [diesel] cars remain the right choice for many motorists – especially those who travel longer distances – with lower CO2, better fuel economy and, with these newer vehicles, dramatically reduced air quality emissions.”

Separately, Professor David Bailey, professor of industry at Aston Business School and an automotive industry expert, has claimed that diesel cars are caught in a “perfect storm” that will result in their market share collapsing to just 15% by 2025 compared with 42% last year and more than 50% just three or four years ago.

He was quoted The Daily Telegraph (January 10, 2018) as saying: “They [diesel cars] face a perfect storm of bad PR over pollution, coupled with concerns over increasingly strict regulations and sinking second-hand values.”

Jaguar Land Rover, which sold around 120,000 cars in the UK last year with around 80% diesel, has also entered the debate.

Sales operations director Andy Goss said the government’s policy, which includes increasing from April 6 the company car benefit-in-tax supplement from 3% to 4% on all diesel cars not meeting Read Driving Emission 2 standards – currently all models – was “difficult to fathom”.

Additionally, from April 1 a Vehicle Excise Duty supplement will be introduced on all new diesel cars registered so that the First Year Rate will be calculated as if they were in the VED band above.

Mr Goss said the VED tax rise was “a surprise” and joined Professor Bailey in pointing out that older diesel cars were more polluting than new models.

Further adding to government diesel policy confusion is the fact that models that meet today’s strict Euro6 emission standard, which applies to all new cars, will be allowed inside London’s ultra-low emission zone without penalty when it is introduced in April 2019. Additionally, as Clean Air Zones are introduced in other towns and cities across the UK, entry criteria is likely to match that of London.

It is therefore little surprise that the SMMT says: “The decision to tax the latest low emission diesels is a step backwards and will only discourage drivers from trading in their older, more polluting cars. Given fleet renewal is the fastest way to improve air quality, penalising the latest, cleanest diesels is counterproductive and will have detrimental environmental and economic consequences.”

Meanwhile, as the government seeks to encourage demand for plug-in vehicles the RAC survey revealed that there was “strong widespread concern about the practicality of replacing diesel vehicles with alternatively fuelled ones” with 40% of large firms “not confident” in the range capability of most electric vehicles currently.

The RAC said: “Diesel engines have always been the go-to vehicle for businesses due to their superior fuel economy, their longer engine life and their ability to move heavier loads making them more cost-effective and practical.

“If businesses are now making a switch to other types of vehicles based on anti-diesel sentiment, which may not have been entirely accurate when it comes to the latest cars, they risk losing out on that cost benefit.”

The RAC said “the concern expressed by some businesses about diesel engines may be misplaced” and backed the SMMT in saying that today’s new diesel vehicles performed significantly better in terms of nitrogen dioxide emissions than their predecessors and even some older petrol vehicles.

The motoring organisation continued: “During 2017 there was a lot of debate about emissions from diesel vehicles being harmful to health and the possibility of charges being introduced for certain vehicles in some cities to combat the issue. This has undoubtedly affected attitudes among fleets and left them uncertain as to what type of vehicle to choose next.

“However, what isn’t that well understood is that the newest diesel vehicles coming onto the market now are among the cleanest ever produced and also emit far less carbon dioxide than their petrol equivalents.

Demand for defleeted diesel cars remains “strong”, but the outlook is “uncertain”

Demand for defleeted diesel cars remains “strong”, but the outlook was “uncertain”, according to the latest monthly report from automotive data provider Glass’s.

New diesel car registrations in 2017 were down around 17% year-on-year, but said Glass’s, vehicles registered before April 2017 were subject to the country’s older excise rates, based on CO2 emissions, which meant that buyers opting for diesel paid a more financially favourable tax rate, with some vehicles costing as little as £30 per year.

The report continued: “Used cars are taxed based on the tax band that applied when they were first registered, and so diesels remain a popular choice for cost-sensitive used buyers due to their greater fuel economy. The used car market data shows demand for diesel vehicles remains strong.”

Following a spike in residual values early in 2015, trade values of both petrol and diesel cars after 36 months/60,000 miles as a percentage of their original price fell and subsequently diesel cars typically underperformed their petrol-engined rivals.

Glass’s anticipates that trend will continue in the short to medium term largely due to the media’s ‘demonisation’ of diesel.

However, said Glass’s: “In the long term, if diesel registrations continue to fall away at similar rates as they are currently, there is even a risk that the used car market will ultimately be oversupplied with petrol vehicles but not enough diesels. This would naturally help keep diesel values higher and would also have a negative impact on the values of petrol vehicles.”

But, the report continued: “However, this is an unlikely scenario as demand for used diesels is expected to wane and so the outlook for diesel residual values remains uncertain.”

Overall the used car market remains buoyant with data for ex-fleet and lease cars sold by remarketing giant BCA showing hammer values close to record levels.

However, there continues to be a two-tier market in operation with ready-to-retail cars continuing to attract buyer’s attention and selling quickly for top money. Meanwhile, experts advise that poorer condition, older and higher mileage examples need to be accurately appraised and valued in line with market expectations if they are to be sold first time.

O-Licence exemption on alternatively-fuelled vans increased to 4.25 tonnes

The government has decided to introduce an exemption from goods vehicle operator licensing for alternatively-fuelled vehicles up to 4.25 tonnes to help incentivise the use of cleaner fuel vans, while avoiding the regulatory ‘payload penalty’ associated with heavier powertrains, including battery weights.

The move follows industry lobbying and a public consultation that also sees “the common-sense step” of bringing electric vans under normal roadworthiness testing rules, which means they will be subject to an MoT unless first registered before March 1, 2015.

Operator licences – known as O- Licences – are required by businesses when operating vehicles above 3.5 tonnes. But the government has decided to:

  • Remove the current exemption for all electrically-propelled vehicles, except for those first registered before 1 March, 2015; and
  • To introduce a new exemption for alternatively-fuelled vehicles up to 4.25 tonnes, that are not used internationally.

The MoT exemption is being removed because, said the government, it “would correct an anomalous and historical exemption, which dated from a time when electric goods vehicles were not of normal vehicle construction standards or capable of travelling at normal speeds”.

In addition, said the government: “It would be important for avoiding the creation of regulatory disincentive to the uptake of heavier electric vans – for example of around four tonnes – once the equivalent exemption from roadworthiness testing applicable to electrically-propelled heavy goods vehicles (above 3.5 tonnes) was removed”. The latter change was announced in September, with effect from 20 May, 2018.

Transport Minister Jesse Norman said amending legislation to bring the changes into effect would be introduced. However, no date has been given for when the new rules will apply.

The National Franchised Dealers’ Association (NFDA) Commercial Vehicle sector welcomed the move.

Sue Robinson, director of the NFDA Truck and Van division, said: “Echoing the NFDA’s consultation response, the government has recognised that for alternatively fuelled vans to be commercially viable, vehicles with a gross vehicle weight of up to 4.25 tonnes must be treated in exactly the same manner as a 3.5 tonne GVW vehicle.

“We welcome this decision and acknowledge that is a step in the right direction in encouraging alternatively fuelled vans to become part of van fleets.”

TfL increases Congestion Charge Penalty Charge Notice

The fine for non-payment of the London Congestion Charge increased on January 2 and increases in penalties for other motoring offences committed on the capital’s roads are in the pipeline.

Transport for London (TfL) has increased the Penalty Charge Notice (PCN) from £65 to £80 or £130 to £160 for late payment, with a proposed rise for offences on TfL’s road network to follow later in the year, subject to Secretary of State review.

The Congestion Charge had played an important role in reducing the number of vehicles in central London, and fines for not paying the charge encouraged drivers to be compliant, said TfL.

But in the past five years there had been a 12% increase in the number of motorists being issued with Congestion Charge PCNs. The rise from around 1.3 million in 2011/12 to around 1.5 million in 2016/17 was a clear indicator that the effectiveness of the current PCN fine had reduced over time, said TfL.

Later this year, and subject to the required Secretary of State review, TfL is also proposing to increase PCNs for offences which take place on their road network.

More than a third of all London’s traffic uses TfL’s road network, often referred to as red routes, and vehicles that block roads, drive in bus lanes, park incorrectly or make banned turns, not only caused inconvenience to road users, but created hazards, particularly for pedestrians and cyclists, said TfL.

By keeping the main routes clear, road danger, congestion, vehicle emissions and delays to bus passengers were reduced, ensuring that London remained an efficient, well-functioning global city, said TfL.

TfL said it had also made it easier to pay the Congestion Charge with the new official TfL Congestion Charge app launched. It allows motorists to pay using a mobile device for the first time.

Users can pay the Congestion Charge and T-Charge much quicker than paying by phone or online, save vehicles and payment cards to their app and see if a postcode is in the Congestion Charge zone.

Paul Cowperthwaite, TfL’s general manager for road user charging, said: “We want to make London’s streets safer and healthier places that are less dominated by the car.

“Although the Congestion Charge has been effective in reducing the number of cars entering central London, we’ve seen a 12% increase in the number of motorists being issued with PCNs in the last five years.

“This shows that the deterrent factor of the existing PCN has reduced over time. The new PCN level will help improve compliance and also encourage people to consider cheaper and more active alternative forms of travel.”

Tolls reduced on Severn Bridges as VAT is removed

Charges for using the Severn Bridges have reduced as a result of the removal of VAT following responsibility for management switching into public ownership.

Simultaneously, following the move on January 8, drivers who use the Severn Bridges have been reminded of changes to the TAG payment system.

Those who pay by top-up with a Trip TAG through online banking will need to update their payment details to Highways England’s account. Account holders will still be able to pay through the website or phone.

Drivers paying by direct debit will not need to take any action – their accounts and balances will be transferred automatically and their payments adjusted to reflect the new charges.

The changes have been shared by letter with holders of TAGs – the prepayment system that allows regular travellers to cross without stopping to pay manually.

Responsibility for the Severn Bridges has passed to Highways England from Severn Crossing PLC.

Since midnight on January 8, the removal of VAT means that the new charges are as detailed below:

Vehicle Category Current daily
toll charges
Daily charges after
January 8, 2018
Category 1 (Cars and other vehicles up to 9 seats) £6.70 £5.60
Category 2 (Goods vehicles up to 3.5 tonnes, small buses) £13.40 £11.20
Category 3 (Goods vehicles over 3.5 tonnes, large buses) £20.00 £16.70
  • Category 1: £5.60, with the Season/Shared TAG at £98.56 (20% discount based on 22 trips per month).
  • Category 2: £11.20, with the Season/Shared TAG at £197.12 (20% discount based on 22 trips per month).
  • Category 3: £16.70, with the Season/Shared TAG at £330.66 (10% discount based on 22 trips per month).

Meet the team – Dom Shearn

Name: Dominic Shearn

Job Title:  Marketing and communications Lead

Explain your role in 10 words:  Marketing and communications strategy, design and implementation of corporate literature

What’s the best aspect of your job?  Being part of a dynamic team

What’s the worst aspect of your job?  Not having the time in the day I need

How long have you worked at Fleet Service GB?  From the start, 2014

What was your first paid job?  McDonalds when it opened in Bath, I made a mean burger!

What’s your favourite car?  Aston Martin DB11

What one thing would you like to achieve before you retire?   Enough money to retire on.

Outside of Fleet Service GB, what would your dream job be?   Professional cyclist or boatbuilder, but I lack the ability and skill

Who in the world would you most like to meet?  My wife’s father who died before we got together

What is your favourite way to spend a day outside of work?  Doing triathlons or on the beach with my wife

If you won the lottery how would you spend the cash?   Buy an Aston Martin and take my whole family on a holiday around the world!

Not a lot of people know that I’m preparing to run 100km, in one go, on a treadmill for charity in 2018

Fleets must future-proof company car choice lists as industry anger mounts over government diesel company car 2018 tax rises

Businesses must future-proof company car choice lists as industry anger mounts at the government’s decision to increase benefit-in-kind tax bills for around 800,000 employees who drive diesel vehicles from April 6, 2018.

There have even been suggestions that Chancellor of the Exchequer Philip Hammond, who announced the measure in the autumn Budget Statement, is trying to “kill the company car”.

However, any such move would be extremely short-sighted as, with the political focus on improving air quality company car drivers are typically at the wheel of the safest low-emission vehicles available.

What’s more any move away from company cars and a rise in demand for cash allowances signalling an increase in the size of the UK’s ‘grey fleet’ – employees who drive their own cars on business trips – would significantly increase corporate administration, notably in respect of work-related road safety and employers’ duty of care compliance requirements.

A further option to save tax would be for either employers to ‘downgrade’ the level of company car entitlement to staff or for employees’ to voluntarily choose a cheaper vehicle than the grade to which they were entitled.

Meanwhile, the Society of Motor Manufacturers and Traders (SMMT) says that the government’s “on-going anti-diesel messages” are undermining business, as well as consumer, confidence, manifesting itself in new car registrations falling in November for the eighth consecutive month.

SMMT chief executive Mike Hawes said: “Diesel remains the right choice for many drivers, not least because of its fuel economy and lower CO2 emissions. The decision to tax the latest low emission diesels is a step backwards and will only discourage drivers from trading in their older, more polluting cars. Given fleet renewal is the fastest way to improve air quality, penalising the latest, cleanest diesels is counterproductive and will have detrimental environmental and economic consequences.”

The forthcoming tax rise further underlines the requirement for fleet decision-makers to future proof their vehicle operating decisions as the default fuel choice may no longer be diesel with petrol, hybrid and plug-in vehicles all potential viable alternatives.

The Chancellor announced that the existing company car benefit-in-kind tax supplement would increase from 3% to 4% from April 6, 2018. He said the take hike would help to pay for air quality improvements with transport emissions one of the biggest contributors to pollution.

The rise from 3% to 4% applies to all diesel cars (not hybrid diesels) registered on or after January 1, 1998 that are not certified to the new Real Driving Emissions 2 (RDE2) standard.

The government admits that “few, if any cars, cars will meet RDE2 standards in 2018 to 2019” as the standard is not due to be fully mandatory until 2020. However, any diesel cars that are certified to the RDE2 standard will not be subject to the supplement.

The government says that 350,000 company car drivers per year replace their vehicles, so within a few years, most affected drivers would have had the opportunity to choose new models not subject to the supplement.

The rise in the diesel car tax supplement is in addition to company car tax increases previously announced for consecutive year up to the end of 2020/21. Those rises means, for example, that tax on a 99g/km diesel car will increase from 21% (including 3% supplement) in 2017/18 to 28% in 2020/21 (including 4% supplement) – a rise of 33%.

Government calculations suggest that drivers of a BMW 3 Series (CO2 emissions 111-130g/km) will see tax bills rise in 2018/19 by £60 (basic rate taxpayer) and £120 (higher rate taxpayer), a BMW 6 Series (CO2 emissions 131-150g/km) by £125/250 and a Ford Focus (CO2 emissions 91-100g/km) by £43/£86.

For any employees driving cars that meet the RDE2 standard and are therefore exempt from the new 4% supplement, HM Revenue and Customs says it will issue guidance on how they should be treated so that the diesel supplement is disapplied. The government currently estimates that will affect the “low hundreds” of employees.

For 2019 to 2020 onwards, employers will have to note reported NOx emissions for new diesel cars and check whether or not they meet the RDE2 standard. The government says that information will be available on the same documentation – the certificate of conformity – which lists a car’s CO2 emissions figure.

John Pryor, chairman’s of fleet decision-makers’ organisation ACFO, called the tax hike “grossly unfair”.

He continued: “Fleets and drivers choose to operate diesel company cars because they are efficient, particularly for when clocking up high annual mileages. To penalise such a business-led decision is grossly unfair.

“With already announced company car benefit-in-kind tax rates rising year-on-year, the one percentage point diesel supplement increase further slices away at the value of company cars to both employers and employees. Employees particularly may think that it is not worth having a company car and may opt for a cash allowance.”

By allowing employees to take a cash allowance and “do their own thing”, Mr Pryor warned  that they may choose an older, more polluting vehicle than the company car they may otherwise have been entitled to, which then damaged the government’s bid to improve air quality.

Gerry Keaney, chief executive of the British Vehicle Rental and Leasing Association, accused the government of “going back on its word” by retrospectively raising the company car tax bill of hundreds of thousands of workers.

He said: “People that chose a diesel car as a cost-efficient, low CO2 form of essential business travel are being punished unfairly. Why should drivers at work be treated differently from other taxpayers?”

Paul Hollick, chairman of fleet industry training organisation ICFM, accused the Chancellor of being “on a mission to drive employees out of company cars”.

With company car benefit-in-kind tax bills due to rise year-on-year to the end of 2020/21, Mr Hollick said: “The actions that the government is taking shows that it does not understand that the emissions problem – and therefore the whole air quality problem – is with older vehicles. Cars that meet Euro6 emission standards, which is an increasing number of company cars, are the ‘cleanest’ available.”

  • Chancellor of the Exchequer Philip Hammond also announced in the Budget that a Vehicle Excise Duty (VED) supplement would apply to apply to new diesel cars first registered from April 1, 2018, so that their First Year Rate is calculated as if they were in the VED band above. For example, a Ford Focus diesel (CO2 emissions 91-100g/km) will be subject to an additional £20 in the First Year, a Volkswagen Golf (CO2 emissions 111-130g/km) an additional £40, a Vauxhall Mokka (CO2 emissions 131-150g/km) £300 and a Land Rover Discovery (CO2 emissions 171-190g/km) £400, according to government figures. The measure will not apply to next-generation clean diesels – those meeting the RDE2 standard.

London Mayor consults on 2020 Ultra-Low Emission Zone expansion

London Mayor Sadiq Khan has launched a public consultation on the next phase of his hard-hitting plans to tackle the capital’s toxic air, reduce filthy emissions and protect the public from harmful pollution by expanding the Ultra-Low Emission Zone (ULEZ).

It is proposed that the ULEZ standard will be applied London-wide for lorries, buses and coaches from October 26, 2020 and for cars, vans and motorbikes – with limited exemptions – up to the North and South circular roads from October 25, 2021.

The Mayor said he was determined to help thousands more Londoners breathe cleaner air and was delivering a series of measures to protect public health and dramatically reduce car emissions from older more polluting vehicles.

The Mayor recently delivered the first phase of his air quality improvement plan by introducing the new weekday (7am-6pm Monday-Friday) £10 Toxicity Charge (T-Charge) in central London for the oldest vehicles. That runs alongside and on top of the £11.50 Congestion Charge (C-Charge).

From April 8, 2019, the Mayor has already announced introduction of the second phase of his plan with implementation of the ULEZ. It will replace the T-Charge and cover the same central area, alongside and on top of the C-Charge, but it will operate 24 hours a day, seven days a week, 365 days a year.

The daily charge for non-compliant vehicles will increase from £10 to £12.50 (for cars, vans and motorbikes) and £100 (for buses, coaches and lorries).

The Mayor says the extension of the ULEZ in 2021 could affect 100,000 cars a day, 35,000 vans a day and 3,000 lorries a day.

Drivers of non-compliant cars, vans and motorbikes would pay the same £12.50 daily fee as the central London ULEZ. Drivers of non-compliant lorries, coaches and buses would pay £100 a day.

Diesel vehicles that do not meet Euro6 emission standards and most petrol vehicles that do not meet the Euro4 standard would have to take action or pay, making the ULEZ the tightest emission standard adopted in any major world city, it is claimed.

The area covered by the expanded ULEZ would include all roads up to a limit of the North and South circular roads, but not the North and South circular roads themselves.

The fine for non-payment of the charge if a vehicle does not meet the ULEZ standard is £130 reduced to £65 if paid within 14 days for cars, vans and motorbikes – although the new consultation includes a suggestion that the fine could rise to £160 – and £1,000 reduced to £500 if paid within 14 days for lorries, buses and coaches.

Mr Khan said: “I am determined to take the bold action needed to protect the public from London’s poisonous, deadly air. I can’t ignore the shameful fact that London’s air is so toxic it harms children’s lungs, exacerbates chronic illness and contributes to thousands of premature deaths each year.

“Following the successful introduction of the T-Charge, and confirmation of the central London ULEZ, I am moving ahead with the next stage of my plan to expand the Ultra-Low Emission Zone up to the busy North and South Circular Roads.

The consultation, which closes on February 28, 2018, is accessible at: https://consultations.tfl.gov.uk/environment/air-quality-consultation-phase-3b/?cid=airquality-consultation

Company car tax and VED rates to switch to WLTP CO2 figures from 2020

Company car benefit-in-kind tax and Vehicle Excise Duty (VED) will be based on carbon dioxide (CO2) emission figures derived from the recently introduced Worldwide harmonised Light vehicles Test Procedure (WLTP) test procedure from April 2020.

Amid fears that could spell higher tax and VED rates, fleet industry leaders have called on HM Treasury to adopt a revenue neutral approach.

Company car benefit-in-kind tax and VED is currently based on CO2 emissions figures calculated using the New European Driving Cycle (NEDC) vehicle testing procedure.

However, from September 1, 2017 the NEDC regime has been replaced by the WLTP test procedure.

Long-time calls by the fleet industry to clarify when company car benefit-in-kind tax and Vehicle Excise Duty systems would switch to using data derived from the WLTP regime were clarified by Chancellor of the Exchequer Philip Hammond in the autumn Budget Statement. He said that NEDC figures would continue to be used until April 2020, when the new WLTP figures will be introduced.

The government said that following discussions with the car industry it considered that the timeline for introducing the new system would give manufacturers time to reflect the new values in all of their vehicles, and to explain to customers what the change would mean.

Industry experts have suggested that CO2 figures on a car-by-car basis could increase by about 20% with introduction of WLTP.

As a result, industry groups have called for a recalibration of both company car benefit-in-kind tax and VED emission bands to ensure revenue neutrality and avoid any tax increases, which could be a further nail in the coffin of company car demand with employees opting to take cash.

However, whether CO2 emission thresholds will be recalibrated to take account of any increase remains to be seen. Neither Mr Hammond nor the Budget papers gave any indication as to whether tax bands and CO2 levels would be realigned.

If tax thresholds remain unchanged – tax rates have already been announced to the end of the 2020/21 financial year – then the likelihood is that company car benefit-in-kind tax bills will rise significantly.

Figures published by automotive industry data provider JATO for a handful of models indicate the CO2 g/km difference between NEDC and WLTP derived figures.

For example the CO2 g/km figure on a BMW X5 3.0D Xdrive automatic jumps from 156g/km to 183g/km. If already published tax tables were used to calculate the percentage of P11D due in 2020/21 a driver’s tax bill would jump just one tax band from 36% to 37% assuming no company car tax diesel supplement was due.

However, for a Peugeot 308 1.2 PureTech 130 Active SW with emissions up from 106g/m to 121g/km the model would move from the 25% tax bracket in 2020/21 to the 29% tax band. Meanwhile, a Volvo XC60 2.0 D4R Design Geartronic 4WD with emissions up from 133g/m to 148g/km would switch from the 31% tax bracket in 2020/21 to the 34% threshold.

Paul Hollick, chairman of fleet industry training organisation ICFM, said: “If the introduction of a company car benefit-in-kind tax system linked to new WLTP emissions data does not result in a wholesale restructure of band thresholds tax bills will increase significantly. The result will be that employers and employees abandon company cars as a benefit that is too expensive. Instead employers and employees will turn to cash and PCH alternatives.”

Gerry Keaney, chairman of the British Vehicle Rental and Leasing Association, welcomed final confirmation that a new WLTP-based CO2 company car tax regime would be introduced in 2020.

However, he added: “Although we had pushed for the vehicle leasing industry to be given an extra year to prepare for these changes, we look forward to working with the government in developing a tax revenue neutral approach.”

Fleet managers say a third of company cars will be plug-in by 2022 but ‘fully autonomous’ vehicles provide challenges

Fleet managers estimate that one-in-three cars they manage will be either a plug-in hybrid or electric by 2022 and within a decade that figure will have increased to one-in-two.

Fleet managers who don’t currently have a plug-in hybrid or electric vehicle within their operations, believe that they will do so within an average of four years, according to Kia’s new ‘2017 Fleet Market Attitudes’ report.

The delayed adoption by fleet managers was because:

  • 41% said the design of existing cars “looked unprofessional”
  • 35% cited that the UK’s charging infrastructure was a barrier
  • 27% said plug-in hybrids and electric cars were too expensive
  • 20% felt that they did not yet understand enough about the technology, showing that more information across the industry was needed, said Kia, which interviewed 150 fleet managers.

The study was published shortly after the British Vehicle Rental and Leasing Association in its ‘2018 Industry Outlook Report’ suggested that 2019 and not 2018 would be the ‘breakthrough’ year for pure electric vehicles with next year being the year of the hybrid when it came to growth in electric car registrations.

Additionally, when looking at the UK’s charging infrastructure, 55% of all fleet managers in the Kia study agreed that the UK’s charging infrastructure was not good enough to currently warrant fully investing into the technology. Conversely, of those that were yet to adopt, they believed that the UK’s charging infrastructure would be better by 2021 – with battery life and charge time improving by the same date.

Of the fleet managers who did have plug-in hybrid or electric vehicles within their operations, the top reason was because they were good for the environment (67%), followed by an understanding that they were cheaper in the long run (67%) – at odds with fleet managers who didn’t operate the cars and believed they were too expensive – and that the charging infrastructure was good in their area (58%). That was followed by 43% who believed they were more attractive than ‘regular cars’ and 41% who stated that there was demand from employees to drive them.

Looking to 2018 and fleet managers said they were looking to further cut company car emissions due to the main rate threshold (18%) for capital allowances for business cars reducing to 110g/km of carbon dioxide (CO2) from 130g/km. A total of 77% of respondents said that their organisation intended to change their fleet policy next year to take account of the change. Additionally, the 100% First Year Allowance threshold reduces to 50g/km (presently 75g/km) from April 2018, while on vehicles with CO2 emissions above 110g/km: companies can write down 8% of the cost of the car against their taxable profits each year, on a reducing balance basis.

The survey revealed that currently, the average CO2 levels of organisations’ fleets was 118g/km, with 27% being less than 110g/km.

However, a similar proportion stated the average to be more than 130g/km, while 30% admitted they didn’t know – suggesting, said Kia, that emission tax bands remained a concern, but were not necessarily a ‘deal-breaker’ for those who wished to purchase cars above the threshold.

The ‘2017 Fleet Market Attitudes’ report also revealed that two thirds of respondents admitted that their organisation was nervous about operating a petrol or diesel car that wasn’t a plug-in hybrid for their fleet in the wake of the government’s earlier this year announcement that solely petrol and diesel cars may be banned from 2040.

John Hargreaves, head of fleet and remarketing at Kia, said: “As more and more organisations embrace new technologies for the vehicles in their fleets, traditional powertrains are becoming less likely to be considered the default option.”

The fleet industry is also developing of in-vehicle technology with ‘assisted driving’ and ‘semi-autonomous’ features gradually becoming more commonplace.

However, when it comes to ‘fully-autonomous’ vehicles, most fleet managers (93%) see challenges. Identifying who was liable in the case of an insurance claim (56%) and the cost in updating roads and motorways so that they were compatible (47%) were cited as major concerns.

In addition, 76% of respondents thought that the greatest challenge facing ‘fully-autonomous’ driving was in changes to culture – with employees expected to work longer hours while commuting.

However, despite those barriers, many respondents believed that ‘fully-autonomous’ vehicles offered significant benefits. The majority (74%) agreed such vehicles would result in fewer road crashes – potentially saving fleet costs and increasing road user safety, while 64% believed that their fleet would be cheaper to maintain if it were ‘fully-autonomous’.