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Tackling the low-emission challenge

Date: 16 October 2018   |   Author: Sean Keywood

The road toward lower road transport emissions will be led by fleets - but they can't do it alone, industry experts have said. Sean Keywood reports.

Fleets will drive the take-up of electric vehicles (EVs) - but need support from the government and car manufacturers to do it.

That was one of the messages to emerge from a Westminster Energy Environment and Transport Forum seminar on the next steps for low-emission vehicles.

Ross Fairley, partner and head of energy, power and utilities at law firm Burges Salmon, told delegates that the role of fleets would be crucial in reducing emissions.

He said, "We need fleets to propel the growth of EVs. Poor old fleets and businesses, they're constantly faced with new challenges, but this is a massive challenge for large corporates - this is going to be a massive part of their corporate social responsibility mix. 

"Fleets will drive the second-hand cars which will come onto the market. That's where I think we need to look for the deployment."

However, Fairley warned that this would be easier said than done, with outside factors causing fleet managers to pause before acting.

"There are quite a lot of fleet managers and businesses out there that want to use EVs, but they are not the complete solution yet and certainly there seems to be a blockage in terms of getting the numbers of vehicles that those fleets need and the infrastructure around them. 

"If we're not careful, you have everyone racing towards EVs but the manufacturers not producing enough of them."

Leaseplan UK managing director Matt Dyer agreed that manufacturers would have an important role to play with fleet EV take-up.

He said, "We need to start to see the choice in terms of pure EVs that do the jobs that fleets need.

"Though I do believe that ultimately manufacturers will bring the right product to the table, the key question is when and in what volume, and that's where we need to start to see some commitments from manufacturers on specific dates and specific numbers. 

"If we encourage our customers to go for zero-emission or low-emission vehicles, they have to know that the product is there."

Dyer said Leaseplan was taking steps to make it easier for its customers to go electric - and this was being welcomed by them, with the firm's pure EV fleet in the UK increasing by 131% over the last 12 months.

However, Dyer warned there were still many challenges facing fleets going down this route, including a high total cost of ownership compared with internal combustion engine (ICE) vehicles.

He said, "The total cost of ownership for an EV compared with an ICE vehicle still must improve significantly. 

"A BMW i3 is over £150 a month more than a Volkswagen Golf, a BMW 320 is £300 a month cheaper than a Jaguar I-Pace, and a Tesla is nearing £1,500 a month in terms of cost.

"Can we really expect businesses to make decisions that will cost them financially, especially at a time of increasing rates, the apprenticeship levy, wage inflation and some business and consumer uncertainty?

"Nearly half of our fleet is with SME businesses where cost is the absolutely crucial factor."

Dyer added that a further underlying issue was government policies toward company car drivers, with a cut in BIK tax bands for the lowest-emission vehicles not due until 2020, and the new WLTP emissions test risking further rises in costs.

He said, "What can politicians do? They can help by mitigating some of this impact and we hope to see policies in the budget that will allow this to happen.

"If they don't there is one real risk - that drivers will not stay in company car schemes, but will take a cash allowance. 

"And what do we know? When people take a cash allowance, they take an older vehicle, a larger-engined vehicle, and one with worse emissions in terms of both CO2 and NOx. 

"That is not how we're going to deliver the road to zero."

According to Dyer, clarity is also needed on EV infrastructure.

"We need some certainty. At this point we don't yet know if the home and workplace charging grants will go beyond next March, so how can we advise our customers what's right for them, and how can we encourage our customers to make the move to lower-emission vehicles?"

The seminar took place before the government's announcement that the Plug-In Car Grant would be reduced for pure EVs, and effectively scrapped for plug-in hybrids.