Ask the expert

Congratulations – the market needs more fleets to be early adopters of low carbon technology.
With electric vehicles you can expect low running costs (including no road tax and 100% discount from London congestion charging), reduced driver fatigue (low noise levels, no gears, strong performance from low speed) and high reliability (fewer moving parts). 

Your customers are more likely to notice you and appreciate your sustainable approach to transport.

There are drawbacks, which may limit where you are able to use electric vans effectively. Payload will be impacted by the weight of batteries and range will probably be 100 miles or less between charges (not a big problem for many urban delivery operations). 

Consider where vans will be at night. If drivers take them home then overnight charging may be impossible. 

Capital cost will be greater than a similar diesel van (but offset by lower running costs) residual values are still unproven and sadly the 100% first year writing down allowance for under 110gms/km does not apply to vans as it does for cars.

If the drawbacks outweigh the benefits, then don’t despair. Hybrid electric vans may be the answer and will give you some of the benefits of the full electric versions but minus many of the disadvantages.

LPG is a very clean fuel and will reduce carbon emissions compared with petrol and give similar results to diesel but without the air quality problems associated with diesels in urban areas.

From a financial perspective, if you run petrol vehicles (you can’t convert diesels), it might be viable – but do your sums carefully! 

If you lease vehicles, it’s very unlikely your supplier will agree to retrofit. 

Conversion will typically cost between £1,600 - £2,000 and you can expect lower running costs but will need to consider how long it will take to recoup this expenditure. Expect a small increase in servicing costs, but depending on where you de-fleet you may recoup something on residual value.

Savings of about 3.5 pence per mile suggest a payback of about 45,000 – 50,000 miles, but only if your drivers always refuel with LPG. LPG availability will mean that on occasions drivers may switch to petrol and without tight controls some savings will be eroded.

If you have cars or vans regularly driving into the London congestion zone, the 100% discount (only for vehicles on the Energy Saving Trust’s Powershift register) will mean much bigger savings. For further information, log on to: www.energysavingtrust.org.uk.

HMRC rates are derived from a basket of typical fleet cars and based on their combined MPG less 10%. 

You might therefore feel you can legitimately duck the challenge and say that the figures are fair, unbiased and representative of what most drivers should achieve. 

However the current (September 2009) rates are calculated on fuel prices of petrol at 97.5p per litre and diesel at 103.4p so your drivers might have a point. But the rates are calculated from a wide range of vehicles and if your fleet is lower CO2 cars than average, it may be that the rates are over-generous, even though they are based on price per litre values few drivers will achieve.

The only way you can be sure is to analyse the make-up of your fleet, the combined MPG of those vehicles (making some allowance since few drivers will achieve the combined) and apply the current average fuel prices published in Fleet News. 

Better still, move to fuel cards and recharge private miles on the basis of the percentage of business / private miles. 

You will then be able to monitor fuel spend, individual drivers’ consumption and better manage this significant area of cost.

If your drivers choose a car based on monthly contract hire rentals, the simplest solution is to incorporate a notional cost of fuel based on average mileage and the official combined fuel consumption of each model. 

On this basis vehicles with the best mpg will be more attractive than others with similar rental costs.

You could just exclude all vehicles over a certain CO2 limit but the narrower choice of vehicles will need to be “sold” to drivers. 

Alternatively consider a carrot and stick approach – if 140 grams is your target then “surcharge” all monthly rentals for cars over 140 with (say) £1 per gram and incorporate this into the monthly costs. 

For those sub 140 grams, deduct a similar amount.

Consider fuel reimbursement as well. Make it clear what vehicles you would prefer drivers to be choosing and set mileage reimbursement rates at a corresponding level. Those considering higher CO2 vehicles might just be dissuaded by reduced expense claims. 

Finally, while most drivers are aware that company car tax is directly linked to CO2 , make sure that choice lists available to drivers spell out the monthly tax paid (basic and higher tax payers) as another reminder that the most efficient cars save them money as well as the business.

If you need certain and short term savings, successfully finding ways of reducing mileage driven is a banker.

Not easy to tackle, but great for the bottom line, not just from fuel savings but also lower vehicle operating cost (maintenance and depreciation) and more productivity from staff.
Firstly set a target for the mileage reduction you feel is appropriate. 

You will need line management support and this will only be forthcoming if you inspire your colleagues with the business imperative to do it and why it will benefit their part of the organisation.

Next make sure that alternatives to driving are available. 

That may mean sophisticated video conferencing but for many a simple web cam or low cost telephone conferencing facility might be sufficient. 

Many schemes fail to deliver because the technology is poorly understood by staff, so time invested here is vital. 

Staff driving to meetings individually is clearly undesirable, so ensure a car sharing policy is firmly established and managed. 

Finally just remind drivers that finding a reason not be in the next motorway jam can’t be bad!

Given recent new model launches, 130 grams may not be as tough as you think, but clearly setting a maximum CO2 on your choice lists means the outcome at year end is pretty much guaranteed. 

However if you set a cap, be confident you can stick to it for all drivers – including those who may need an auto or maybe a people carrier.

A potentially less contentious solution with staff would be to set the bar at say 125 grams and add a notional premium to the monthly wholelife cost for cars above 125 grams and a discount for those below (say £1 per gm CO2). 

This would mean that a car of 150 grams would appear on the choice list at £25 more than its true cost, making it less attractive to drivers. 

Conversely cars of 110 grams would appear £15 cheaper than true cost creating a clear incentive for drivers to choose them.

But if you operate a cash opt out – beware. Any restriction on the car choice runs the risk of more drivers migrating to cash and on average you can be sure that cash opt-out cars will be higher CO2.