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