Sustainability still key for fleets despite Covid-19, Lex Autolease finds
24 June 2020
Author: Sean Keywood
Fears that the Covid-19 crisis may have distracted fleets from the issue of sustainability look to be unfounded, according to Lex Autolease.
The leasing company polled fleet managers on the issue during the first of a new series of virtual events it is holding on 'Managing a fleet in challenging times'.
In response, two-thirds of fleet managers said that sustainability is still as important to their organisation as it was before the pandemic, while the remainder said it had actually risen up the agenda.
When asked about other aspects of their businesses, a quarter said that managing cash flow was the immediate priority in the current environment, while three-quarters said they planned to update their fleet policies in the next three to six months as a result of Covid-19.
Lex head of fleet consultancy Ashley Barnett said: "Guiding fleets through these unprecedented times is our priority - understanding what's keeping them up at night and tailoring our solutions to suit. First and foremost, a clear picture of driver activity is needed, which is where data comes in.
"Understanding exactly where you're incurring costs means that in the immediate term, you can look at whether you're making full use of what you're paying for and identify opportunities to increase cashflow.
"Longer-term, you can assess whether you have the most cost-effective mix of fuel types on fleet, and work out where sustainable vehicle technology has a role to play.
"Making the transition to low and zero-emission vehicles is an effective way to reduce national insurance costs and bring down fuel expenses, alongside other elements of whole life cost."
Lex also asked fleet managers if they were aware of the potential benefits of new BIK reductions for electric vehicles, and found that nine-out-of-ten were.
Barnett said that often-cited barriers to EV adoption, such as range, access to charging and product availability, were slowly eroding.
He said: "We recommend starting the transition to EVs with drivers who cover fewer than 20,000 miles per annum, but as charging infrastructure and battery technology are improving all the time, EVs are fast becoming viable for the majority of users.
"While the upfront cost of an EV can be higher than for a petrol or diesel equivalent, the savings that can be achieved during its lifetime can make it cheaper overall.
"It was interesting to see that almost half of those who responded to the polls during our events still don't operate a whole life cost policy, which is an important first step on the Road to Zero.
"We recommend capturing costs such as rental spend, maintenance, fuel and national insurance to help with budgeting and financial performance - now and in the future."
Other key short-term cashflow measures discussed during the event were focused around fuel, including getting rid of private fuel as a benefit - which can be done immediately - auditing expenses, reviewing reimbursement rates and restricting the use of fuel cards.
Almost half of poll respondents said they still offer free or private fuel as a benefit, which according to Lex can be an expensive option for both the employer and the employee.
Lex says its analysis has shown that drivers would need to drive around 25,000 miles per year for free or private fuel to be a benefit, and removing it can save thousands of pounds for both parties, while not necessarily requiring a move away from fuel cards.