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Six in 10 larger businesses considering move away from diesel

The demonisation of diesel has led to large businesses debating a move away from the fuel type, according to new research from RAC Business.

A survey of 1,000 UK firms found 62% of large businesses, with between 250 and 499 staff, are considering phasing out their diesel vehicles, compared to just 33% among small firms with less than 10 employees.

Furthermore, nearly half (47%) of businesses of any size say they are thinking about moving away from diesel.

The research also shows that 35% of small businesses with between two and 50 employees are still more likely to choose diesel engines over any other type.

There was also strong widespread concern about the practicality of replacing diesel vehicles with alternatively fuelled ones, with 39% of all companies surveyed said the vehicles they need are only made with diesel engines. However, among businesses with 50 to 999 employees this percentage rose to 48%.

Four in 10 (40%) large firms (500-999 employees) said they are not confident in the range capability of most EVs currently available in contrast to the all-business figure of 30%.

More than a third of businesses claim they don't have the funds available to buy brand new vehicles but this rises dramatically to 58% among sole traders.

The findings from the survey carried out in Q4 2017, support latest industry figures from the Society of Motor Manufacturers and Traders (SMMT), which said diesel sales were hit hard last year, with a year-on-year decline of around 219,309 units – a drop of 17.1%

However the concern expressed by some businesses about diesel engines may be misplaced according to RAC Fuel Watch spokesman Simon Williams, who says the many new diesel vehicles perform significantly better in terms of nitrogen dioxide emissions than their predecessors and even some older petrol vehicles.

He said: “During 2017 there was a lot of debate about emissions from diesel vehicles being harmful to health and the possibility of charges being introduced for certain vehicles in some cities to combat the issue. This has undoubtedly affected attitudes among consumers and fleets and left them uncertain as to what type of vehicle to choose next.

“However, what isn’t that well understood is that the newest diesel vehicles coming onto the market now are among the cleanest ever produced and also emit far less carbon dioxide than their petrol equivalents.

“Diesel engines have always been the go-to vehicle for businesses due to their superior fuel economy, their longer engine life and their ability to move heavier loads making them more cost-effective and practical.

“If businesses are now making a switch to other types of vehicles based on anti-diesel sentiment, which may not have been entirely accurate when it comes to the latest vans and cars, they risk losing out on that cost benefit.”

Manufacturers have been introducing electric and hybrid commercial vehicles over recent years with some successes, but many businesses still remain sceptical about the capability of electric vans, with 25% of small firms with under 10 staff saying they can’t carry the loads required.

While the benefits of switching to EVs and hybrids are clear in terms of reduction in fuel costs and avoiding fees such as the congestion charge in London, 45% of small businesses say the biggest barrier for them in making the switch is being able to afford the new EVs in terms of upfront costs.

This is likely to be because most advanced commercial EVs have not yet entered the used van network, putting them out of reach for many small firms that rely on the used and approved markets for their vehicles.

Finally, 22% of businesses of all sizes agreed that a significant barrier to switching from diesel to EVs or hybrids, is the lack of infrastructure to keep electric vehicles charged across the country.

Williams said: “The archetypal diesel van has been the workhorse of UK industry for decades and nothing beats it in terms of MPG and load capacity, enabling thousands of small businesses to ‘get the job done’ every day.

“Our research also tells us almost three quarters of small businesses own their vehicles outright, and only refresh their fleet every two to three years, so it’s going to be some time before the latest EVs are available through used dealer networks.

“However, we all recognise that it’s high time to remove the most polluting vehicles from our roads, and older diesel vehicles fall into this category.

“We feel one of the best ways for the Government to encourage the take-up of ultra-low emission vehicles is by offering more support for plug-in hybrids, as these vehicles would then start to feed into the second-hand market and we would see a lot more of these vehicles on the roads.

“Every year technology and capability improves in electric vehicles and they will form a much larger part of the commercial vehicle fleet in years to come. But we would certainly echo concerns around the charging infrastructure and it should be a top priority for the Government if they are serious about increasing the number of EVs on the roads and being used by businesses.”

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