The Budget confirmed the Government’s direction on diesel. Although the impact of the measures announced will be relatively small over the next year or so, a clear line in the sand has been drawn.
This means it’s vital for fleets to put a much closer focus on vehicle policy, ensuring the policy allows flexibility around fuel type while enabling the employee to make the right vehicle and fuel choice.
Real Driving Emission (RDE) 2 standards mean the majority of diesel vehicles will see a 1% supplement increase on company car tax in the short-term.
This may not go down well with a majority of fleet drivers, however, it’s unlikely to dissuade high mileage fleets from shifting their fuel policy.
While unwelcome for some, this move is at least clear and straightforward to factor into decision-making.
As we begin the consultation on how to transition to the Worldwide harmonised Light vehicle Testing Procedure (WLTP) in 2020, a priority will be ensuring this process is simple and transparent.
Until the framework for a transition can be agreed, it will be difficult for HMRC to provide any further clarity around company car tax bands post-2020.
This will be a big challenge for fleets that typically plan in four year cycles. The result could be we start to see a greater shift towards petrol and electric cars this year across fleet.
At Lex Autolease, we have more than 16,000 alternative fuelled vehicles on fleet and we’ve seen a significant increase in enquiries this year.
Infrastructure investment outlined in the Budget means it’s sensible for fleets to start the transition process, but, first and foremost, they must ensure they continue to choose the right vehicles for their needs.
For light commercial vehicle and high mileage fleets, new, cleaner diesel will still be the most practical option.
Where shorter distance, urban driving makes electric and plug-in hybrid cars a practical choice, fleets also need to invest in driver training to get the most out of these vehicles in terms of cost-saving and environmental performance.
The regulatory and technological landscape is becoming ever more complex. Navigating it successfully is a big challenge for 2018.
By Ashley Barnett, head of consultancy at Lex Autolease