According to Cox Automotive and specialist automotive media brand and research organisation 360 Media Group Ltd, optimism for a greener motoring future has never been higher. And it’s not just the UK’s major fleets committing to electrification.
SMEs are also making the switch, but with limited time to make decisions, companies must be equipped with crucial EV information and support to accelerate the adoption of cleaner forms of transport.
In the latest issue of its quarterly insight roundup, AutoFocus, Ian Richardson, Managing Director at 360 Media Group Ltd, highlights the sector's key trends and current requirements, together with Philip Nothard, Insight and Strategy Director at Cox Automotive.
Discussing the transition to EV in the UK, Nothard explained: “There used to be so many obstacles to EV adoption to overcome – fast forward to 2019 and UK fleets had started to dip their toes into the EV pool, ordering their first electric cars. Favourite models included the Nissan Leaf, Tesla Model 3 and Volkswagen e-Golf.”
Continued progress within the electrification journey was further illustrated by the Government’s recent withdrawal of the ‘Plug-in Car Grant’, which, according to Richardson, “barely registered among our audience of 200 fleet buyers. Their EV strategies are signed, sealed and in the process of being delivered (when the new vehicle supply shortage allows)”.
Transitioning from PHEVs to BEVs
On the contrary, EVs are more than having a moment, with battery electric vehicles (BEVs) now accounting for 14% of new car registrations YTD (2022) and a greater choice of models available – most offering a solid 200-mile range. Moreover, plug-in hybrid electric vehicles (PHEVs) are no longer seen as a starting point for electrification, with just four out of ten fleets expecting to place an order for these vehicles this year.
In addition, managing an EV is set to become easier for fleets. For example, Tesla has launched its Supercharger network, which is fully compatible with all makes and models, in addition to 6,000 rapid and ultra-rapid chargers, ensuring drivers are never far away from a superfast charging option. In recognition of this, the UK Government has also mandated that all fast, rapid and ultra-rapid charge points offer seamless payments, including pay-as-you-go and credit card options, to streamline the payment process.
More financial support for EVs
Yet, the transition isn’t without its shortcomings. A primary concern for UK fleets is that HMRC is planning double-digit taxation on electric company cars. As Ian Richardson explains: “There needs to be greater certainty around benefit in kind (BIK) tax tables beyond 2024/25. The taxation may not be as high as the 37% BIK tax levied on many ICE vehicles, but the higher list price of BEVs means the impact on drivers’ tax bills would be significant.”
He continued: “The end of the Electric Vehicle Homecharge Scheme has also reinforced the desire to bundle the cost of a home charger with the monthly leasing rental – 57% of fleets have requested this.
“Total Cost of Ownership (TCO) of EVs is also an issue for a third of fleets, who are unsure if they can compete with internal combustion engine (ICE) vehicles. Unfortunately, predictions of vehicle price parity by 2026 are doing little to alleviate these concerns, proving that it isn’t just the Government that needs to up its game, with manufacturers and leasing companies also feeling the pressure.”
Comprehensive charging
Forget range anxiety; charge anxiety is the hot topic with drivers – 73% of large fleets want shorter charging times which can compete with a five-minute fill-up of fuel, according to Autofocus.
Longer ranges would benefit employee productivity, saving valuable time on the road. Across the company car parc, 43% of vehicles make frequent national business journeys and extended charging durations, together with a lack of charging facilities, cause excessive downtime.
“Future EV investment requires better charging infrastructure – the ratio of chargers to EVs will soon become a critical measure, particularly in cities and clean air zones,” said Richardson.
e-LCVs catching up
Van and light commercial vehicle (LCV) fleets once lagged behind EV adoption targets due to a lack of cost-effective vehicles and limited choice of operationally capable models. However, e-LCVs are quickly catching up, with the all-new Ford E-Transit set to lead the charge.
Richardson explained: “The sector still requires additional support, mainly via the introduction of dedicated charging stations, which must be big enough to accommodate large vans. This is a priority for a whopping 86% of fleets.”
Accessible on-street charging is also a significant concern, particularly for drivers who do not have access outside of working hours. Equally, recovering costs through reimbursement is proving tricky, with many having to tally up figures across home, workplace and public chargers.
More work to be done
“HMRC’s AER (Advisory Electricity Rate) woefully underestimates the true electricity cost per mile of an e-LCV. Overall, 43% of fleets seek an electric charge payment reimbursement solution…this is currently their number one administrative burden,” describes Richardson.
Philip Nothard agrees with Ian Richardson that everyone must do more to make electrification a viable avenue for more businesses.
“It’s clear the UK is making great strides in the EV market for all manner of vehicles. As 360 Media Group Ltd reported, over half of fleets are confident in the Government achieving its target to end the sale of cars and vans with internal combustion engines by 2030.
“Forecasts suggest two out of every three UK fleets will order an EV during the next 12 months, which is a huge development. Yet in order to support this burgeoning industry, a comprehensive infrastructure overhaul must be implemented as soon as possible,” said Nothard.
“The responsibility must be shared across the automotive sector – with manufacturers, leasing companies, charge point operators, charging payment solutions and remarketing channels all playing their part.”
To read more in AutoFocus, click here.