When Will Business Fleets Lessen Their Reliance on Diesel?

Arval, a subsidiary of French bank BNP Paribas, conducts an annual survey called the Corporate Vehicle Observatory Barometer. Talking to business fleet managers in 2016 revealed that the majority (86%) of corporate fleets vehicles in the UK are still currently fuelled by diesel despite hybrid and electric vehicles having come to the fore recently.

Arval forecasts, however, that fleets’ diesel vehicle composition will reduce by a further 5% over the next five years.

The study highlights a clear pattern, namely, that smaller business vehicle fleets are less likely to switch to alternative fuels compared to those of larger organisations.

Fleets comprised 40+ vehicles are expecting to see their diesel composition decrease from 88% to 76% by 2021, whereas those running 40 or fewer vehicles only predict a 1% reduction.

This distinction is echoed by data from many car leasing firms such as Manchester-based Contracthireacar.com, 85% of the firm’s SME clients still leasing diesel cars and vans – a figure they don’t expect to significantly change by 2021.

Business fleet managers who rely on garages like AYCEN to service their vehicles constantly have to deal with tougher BIK, VED and other financial mechanisms as the government strives to encourage the adoption of greener vehicles.

Sadiq Khan, London Mayor, is introducing a £10 T-charge in 2017, penalising pre-2005 vehicles entering the capital, as they don’t even meet Euro 4 emissions standards, let alone the current Euro 6 levels.

This additional fee combined with the London Congestion Charge will see business vehicles pay £21.50 to access central London and although this won’t affect modern fleets with Euro 6-compliant vehicles, it will affect older ‘grey fleet’ vehicles hard.

Mr Khan also wants to speed up the introduction of the Ultra-Low Emissions Zone so that it’s introduced in 2019, with cities like Manchester surely contemplating similar schemes.

What are the Arguments For Diesel Alternatives?

Modern petrol engines are capable of delivering fuel consumption figures not far behind diesel vehicles, particularly for low-mileage use in a localised area, which can prove damaging for diesels because of the particulate filters many are fitted with.

Petrol cars and vans are generally more cost-effective to purchase, fuel and service. Diesel is still by far the best fuel for longer-distance drivers and will remain dominant for many years to come, though, because more affordable electric cars have limited ranges of around 150 miles and few can afford a Tesla Model S to enjoy a range of 250+ miles.

Arval’s Barometer found that 34% of UK fleets already run at least one conventional hybrid, whilst just under one fifth are considering purchasing or leasing at least one electric car or van in the near future.

The VW emissions scandal and the subsequent spotlight on harmful NOx emissions and public health effects, like asthma, have spurred UK fleet managers towards making their fleets not only more financially efficient but also more environmentally friendly. New conventional hybrid, plugin hybrids and fully electric cars and vans are launched on a regular basis, and Toyota even shone the spotlight back on hydrogen fuel cell technology with its Mirai.

March 2016 saw the government’s Plug-In Car Grant split into tiers, the highest discount reduced by £500 to £4,500 for ultra-low emissions vehicles (ULEV) that emit less than 50g/km, with £2,500 available for cars and vans with CO2 emissions between 50 and 75g/km, if they provide a zero-emissions electric range of at least 10 miles.

British Gas, Center Parcs, Manchester Metropolitan University, Leeds City Council and other large organisations have been proud to announce orders for significant numbers of electric vans and other vehicles. But until the comparatively expensive price point of electric vehicles and indeed plug-in hybrids falls, or cheaper leasing deals are offered, smaller business fleets will undoubtedly take longer to follow suit and diesel will continue to lead.

AYCEN Group successfully support Fleet Managers to keep their vehicles on the road.  To discover how we can add value to your business, please contact us.