Girish Gupta investigates how
far thinking among fleet managers has shifted towards electric
cars.
Go deeper with GlobalData
The green vehicle revolution is
gaining momentum. Nissan’s first mass-produced electric car, the
Leaf, will be available from September, and the government is
offering a £5,000 incentive for the purchase of such vehicles. But
will this revolution sweep all before it or fizzle out as fleet
managers see little financial gain in genuinely going green?
The government’s green agenda has
offered attractive tax breaks to companies willing to use vehicles
releasing less than 160g of CO2 per kilometre travelled.
This has led manufacturers to put vast resources into these
low-emitting vehicles, creating much choice for fleet managers.
Roddy Graham, commercial director
of Leasedrive Velo and chairman of the Institute of Car Fleet
Management (ICFM) says: “The beauty of taking environmental
initiatives is that they tend to go hand in glove with cost
initiatives.
“Having that tax bracket is a huge
incentive to help people move. Motor manufacturers deserve to be
congratulated for just how well they’ve responded to it.”
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By GlobalDataContract hire and leasing company
ALD Automotive – which manages 55,000 vehicles in the UK with
another 750,000 around the world – last month reported that in the
first six months of 2010, average CO2 emissions of new
company cars delivered to customers dropped to an all-time low of
144g/km.
Last year’s average emission rates
for all new cars taking to the UK’s roads was 149.5g/km while for
new company cars, the figure was slightly higher at 151.1g/km.
As a comparison, the process of
producing the electricity required to power an electric car emits
just 75g of CO2, half that of a standard fleet
vehicle.
The cars which release the least
CO2 are the relatively new hybrid vehicles. The
forthcoming electric vehicles release none, though of course the
production of the electric batteries they require gives off its own
waste products, including CO2.
ALD Automotive marketing director
David Yates is not certain these ‘green’ vehicles will take
off.
“Hybrid and electric vehicles will
be a niche choice for most fleets,” Yates says.
“While there is interest in these
vehicles, petrol and diesel vehicles are a known quantity and
deliver, in many cases, exactly what fleets and drivers want – low
emissions, excellent fuel economy and a desirable total cost of
ownership.”
Julie Jenner, chairman of the
Association of Car Fleet Operators (ACFO) agrees.
She says: “Hybrid vehicles only
suit a certain population of drivers. When you look at the majority
of fleet drivers, they are not driving around central London or a
city centre.
“They are doing a lot of motorway
driving where hybrid vehicles are not the best option. They may as
well choose a lower-emitting diesel vehicle.”
Forward thinking
Graham’s white paper, A Vision
of Fleet Management in 2015, is hopeful that concerns about
climate change will change opinions among fleet managers in the
future. He is unconvinced the government is able or willing to put
in the investment required to build the infrastructure needed by
electric vehicles.
Graham says: “We have been waiting
for 15 years for a promised integrated transport policy which has
never appeared and frankly it is not likely to appear for another
15 years. Big investment is not going to happen in the next five
years.
“Major transport projects and road
infrastructure will take a back seat over the next five years as we
have to try to rebuild the finances of our country.
“Electric vehicle infrastructure
will be slow to develop. Will electric vehicles be mainstream
within the next five years? No. They’ll not be any more mainstream
than we thought hybrids would be five years ago. But they have a
part to play and will continue to do so.
“They will not become mainstream
for a long time simply because there’s still some phenomenal
efficiencies coming out of normal internal combustion engines.”
The claim is that electric cars are
not ready for the mass market, and certainly not for fleet owners.
This is because they have relatively low range and a lack of
infrastructure available to support them.
Try before you
buy
Research by Cenex, a centre of
excellence for low-carbon vehicle technologies, shows that after
being given the opportunity to try electric vehicles, fleet
managers and their drivers have warmed to them. After integrating
up to four electric vehicles into their fleets for six months, ten
fleet managers and 264 drivers reported to Cenex, which also
analysed quantitative data from the vehicles.
Nearly 90% of fleet managers felt
more positive about incorporating electric vehicles into their
fleets after the project, claiming that the lack of infrastructure
was no barrier to fleet integration.
Many drivers modified their driving
style when the battery was less than 50% charged. This, according
to Cenex, does not correlate with the range of the vehicles but
rather is a product of anxiety that it could run out of power at
around 100 miles.
Nearly 50% of the drivers tested
stated that they would use an electric vehicle as their primary
vehicle after the research, demonstrating again that
education may be the key to promoting wider use.
Nissan’s new Leaf
Nissan is confident Leaf will not
fall foul of the problems cited by some fleet managers and expects
demand to far outstrip supply.
“Nissan is looking to sell 50:50 to
fleet and retail customers with the former likely to be fully
committed in a matter on months,” says Nissan director of
communications Gabi Whitfield.
“Demand from fleets is already very
apparent and a number of high-profile organisations have already
tested the car and are now in advanced discussions with
Nissan.”
The company is also keen to show
that testing by fleet managers had a positive response.
Whitfield adds: “Nissan is not
saying that companies will adopt electric vehicles across the
board. Electric vehicles require thought.
“This is a new shift in motoring
and fleet managers need to be forward-thinking enough to
re-evaluate how vehicles are used within their organisations,
looking at which journeys could use of an electric vehicle and
balancing this against business needs and benefits.”
Jenner also reiterates the need for
investment. “The future is electric for sure. The government
obviously needs to continue the investment and talking to the
manufacturers and making sure they invest in the refuelling and
recharging points. Manufacturers need to continue with their
development to make sure that a range of 80 miles now becomes a
range of 180 miles or even further to make it a really viable,
realistic alternative.
“There will always be a mix. We
have to find alternative means of fuel. We don’t have the resources
to continue the way we are just offering petrol and diesel. There
will be a big change in five years time provided the investment is
still there and the technology continues to move forward.
As well as carbon dioxide, internal
combustion engines also emit benzene and carbon monoxide, contained
in the original fuel and not burnt fully, as well as nitrogen
oxides (NOx), sulphur dioxide (SO2), Ozone
(O3) and particulates which are much more prevalent in
diesel engines than petrol ones.
The government currently does not
offer incentives for manufacturers, fleet managers or drivers to
cut the levels of the pollutants their cars emit.
“None of my large corporate
customers are saying ‘we want to factor particulates in’,” Jenner
says.
“Yes, they are looking into
CO2; yes, they are considering electric. It is at the
back of some people’s minds but it depends how clued up you are as
a fleet manager. It has not had as much impact as some of the other
areas.”
Graham put it more starkly.
“Frankly, the industry is not
talking about particulates because it is not being encouraged to
talk about them,” he says.
Carrot and
stick
“If there was some sort of change
and benefits-in-kind were in some way linked to particulate
emissions, then you’ll see more people moving towards unleaded,
away from diesel, because there are now some very efficient petrol
engines.
“If the government were to look
into policy like that, it would certainly have to abolish the 3%
premium for diesel cars.”
A HM Treasury spokesman said: “For
simplicity, [taxes] focus only on CO2, rather than all
pollutants.
“However, there are also EU
regulations which set increasingly stricter limits to reduce other
pollutants such as nitrogen oxides and particulates which
manufacturers need to adhere to.”
The industry is not likely to take
much interest in green issues unless tax incentives direct it to do
so. However, petrol prices will inevitably continue to rise, as
will pressure on the government from Europe to minimise the
country’s overall impact on the environment.
This gives great opportunity and scope for businesses to be
ahead of the game in their acquisition of greener vehicles as well
as more efficient fleets generally.
