Road To Zero Accelerates

A few eyebrows were raised last week when the government brought forward plans to ban the sale of petrol and diesel vehicles by 2030.

There had long been talk that this may be the case but given the full agenda of the government with Covid19 and Brexit it was nonetheless a surprise.

The substance of the announcement

The two phased approach will see the sale of petrol and diesel (only) cars and vans by 2030.  By 2035 all vehicles sold will have to be zero emission.

Between 2030 and 2035 sales of hybrid vehicles will be allowed if they are able to travel a substantial distance (to be defined through a consultation) with zero emissions.

To support the announcement there was £1.3bn funding to support the installation of new charge points across the country.  In addition, a further £582m of grant funding to support the purchase of zero or ultra-low emission vehicles.

Further legislation will be introduced to support the implementation of green number plates, increasing the awareness around cleaner vehicles.

£500m funding over four years will go to the Automotive Transportation Fund supporting the design and manufacturing of zero emission vehicles.

 

What this means for your fleet

As with all major government announcements the devil will be in the detail.  However, in line with your overall business it is important to make sure your fleet strategy is current and reflects the latest government initiatives.  This will help avoid any knee jerk reactions which may lead to costly decisions regarding fleet replacement.

Once fleet objectives have been refreshed then a plan can be put in place to address the policy on vehicle replacements.

For organisations with a strong environmental focus the replacement of existing vehicles may lean towards increasing the utilisation of ultra-low emission vehicles.

For those with a cost focus then continuing to use petrol or diesel vehicles may be the best option.

It is important to understand replacement cycles for the vehicles as 2030 is not that far away.

Vehicle Options

The availability of electric and low emission vehicles is changing quickly.  Mainstream manufacturers have increased both the model range and supply volumes.  Historically smaller manufacturers such as Tesla have also increased supply to make their products a genuine fleet alternative.

However, not all vehicle applications can be covered and those that can may still encounter some limitations.  Range, especially on some commercial vehicles can be relatively limited as can towing capacity or weight restrictions.

The availability of publicly available charging infrastructure, charge point equipment reliability, compatibility and payment methods also add additional operational constraints.

Total Cost of Ownership

Currently electric and ultra-low emission vehicles tend to be more expensive to purchase than the petrol or diesel alternatives.

However, due to the tax incentives employed by the government to encourage the uptake and lower running costs, it is better to look at the total cost of ownership differences between the alternatives.

It is also worthwhile noting that the grant incentive regime may change because of the new funding announcement.

Infrastructure

It is fair to say that the current charging infrastructure in the UK is varied.  Some areas have good coverage whereas others have very little.  This will evolve rapidly as the £1.3bn government money is spent on charge point projects.  It is likely urban environments will have better coverage than rural locations at least in the short to medium term.

Zap Map is a useful resource when looking for charge point information as it gives details on locations, charging speeds and connector types.

Roadmap and Dynamic Review

To gear up for the Road to Zero we advise creating a roadmap for the transition to lower emission vehicles.  There is no need to move all assets immediately as for many this will have significant operational and cost consequences.

The market for low emission and electric vehicles is developing rapidly.  The situation where employees are currently unable to effectively operate these types of vehicles will likely change within a matter of months.

It is therefore important to have a dynamic review process which factors in new product availability, lead times, pricing, and infrastructure.

In many cases your fleet management company will be well placed to advise you on this.

However, if you would like a more independent view then please get in touch as we would be delighted to help.