Fleet News

Savings could drive EV and plug-in hybrid sales

Companies and drivers are united behind the belief that they can reduce motoring costs through the adoption of electric and plug-in hybrid vehicles, research suggests.

Lex Autolease’s survey of financial directors and company car drivers, shows that they believe reduced fuel spend is the primary benefit.

Chris Chandler, principle consultant at Lex Autolease, said: “For battery-based technologies to survive and prosper, it’s important that companies and drivers have common ground when it comes to vehicle selection.

“Not surprisingly, fuel is that binding agent which brings these two parties together and relationships can only strengthen in the face of rising oil and pump prices.”

However, while drivers feel they can also profit from lower benefit-in-kind (67%) and cheaper parking/congestion charges (41%), financial directors are attracted by the potential corporate responsibility and environmental benefits (65%).

More than one in five financial directors also thinks that EVs and hybrids will reduce maintenance (23%) and improve the marketability of their organisation (22%).

Chandler added: “Running costs will remain the primary motivating factor, of course, but EVs and hybrids will need to compete with petrol and diesel alternatives in all areas to ensure their slice of the UK car parc grows and grows.”

One area where EVs continue to disappoint, when compared to petrol and diesel alternatives, is range. But electric hybrids, such as the new plug-in Prius, or range extended vehicles like the Vauxhall Ampera and Chevrolet Volt, can still provide ultra-low emission motoring without that range anxiety.

The plug-in Prius provides up to 12 miles on battery power alone before behaving like a standard petrol-electric Prius.

Its plug-in technology equates to CO2 of 49g/km and 134.5mpg on a combined cycle, demonstrating technology that is ‘fit for purpose’, according to Miguel Fonseca, vice-president sales and marketing at Toyota Motor Europe.

Toyota has developed a pure electric car in its IQ EV, but recognises their limitations in the fleet market. “It’s difficult to make these cars commercially viable,” explained Fonseca. “We are not against EVs, but we think they are a technology for the future.

“We need a breakthrough in battery technology to overcome issues with range, hence our view that we can use electricity to improve the efficiency of vehicles.”

Fonseca’s views on pure electric vehicles appear to mirror fleet sentiments. In a Fleet News survey, 51% said that diesel-electric hybrids could be the dominant alternative fuelled vehicle on fleets within the next five years, while 30% believe petrol-electric hybrids will come to the fore (Fleet News, October 13).

There is clearly an appetite for the green agenda, as research from Alphabet has revealed the environmental impact of the fleet is cited as a top concern by six out of 10 companies.

However, fewer than half (45%) of the fleets surveyed in the Alphabet Fleet Management Report 2011 had set any environmental goals.

The report’s findings suggest that as cost reduction strategies are often linked to green measures, it may be that companies are greening their fleet by default.

There is a strong and widely-recognised correlation between CO2 emissions and costs. CO2 emissions are directly proportional to the volume of fuel burned while the company car tax regime, with its progressively higher rates of BIK and employers’ NI on higher-emitting cars, magnifies CO2’s effect on running costs.

This means that organisations can achieve significant cost reductions by setting a CO2 limit on their choice list and by encouraging drivers to use their vehicles more efficiently.

Richard Schooling, chief executive of Alphabet, said: “A great many organisations are working hard on coordinated measures to improve their sustainability by tackling emissions at vehicle, driver and journey level.”

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