13th October 2016

Are more incentives needed to encourage UK fleets to adopt ULEV and EV?

Arval, one of the primary funders in the fleet contract hire and leasing market, annually conducts extensive research under the ‘Corporate Vehicle Observatory Barometer’ banner1. This year, they interviewed just shy of 3,000 managers of fleets small to large across Europe and the feedback regarding fleets’ adoption of ultra-low emissions vehicles (ULEV) is generally very encouraging, with 42% already using at least one vehicle with an alternative drivetrain and 31% intent on doing so within three years.

Conventional hybrid vehicles have been introduced by 34% of the fleet managers surveyed, whilst a fifth have procured at least one plugin-hybrid electric vehicle (PHEV) and 17% have gone the whole hog with one or more pure-electric (EV) vehicles2.

Norway and the Netherlands are well-known as dominating electric vehicle registrations, the former seeing EVs account for 33.1% of all new vehicles in Q1 2015 and the latter recording 5.7% of registered vehicles as electric models during the same period. It therefore came as a surprise to see Arval’s 2016 CVO Barometer pointing to the UK leading the way in real and planned adoption of alternatively-fuelled vehicles by fleets.

Whilst it’s fair to note that electric car incentives have somewhat backfired in Norway, having proved so popular that they resulted in lost revenue, complaints from bus drivers and other issues3, it would be great to see the UK offering additional incentives in the short term, particularly to fleets.

So far, the UK’s efforts have been focussed around its four ‘Go Ultra Low’ Cities – Bristol, Milton Keynes, Nottingham and, predictably, London, which Boris and now Sajid have desperately been trying to clean up. This spring, Glasgow decided to scrap its free parking incentives for EV drivers in an infuriating move than can only be considered a backward step despite its understandable reasons. Leeds has done the right thing by introducing free parking for ULEV owners who possess a suitable permit5 and even boroughs like Stockport have rewarded drivers of such green vehicles with exemption from paying parking fees.

The government’s Plug-in Car Grant (PICG)6 was revised not all that long ago, resulting in otherwise eligible vehicles based on their economic credentials suddenly being excluded if they cost over £60,000, while plugin hybrids will only be subsidised to the tune of £2,500, half the original offering.

A week ago, The Guardian7 reported that a group of influential MPs has voiced concerns that UK plc is falling short of its electric car switchover pledge, the DfT’s latest forecasts pointing to ultra-low emissions vehicles likely to form around 4.5% of the UK car fleet by 2020 – half of the government’s target. Without ULEV uptake increasing rapidly over the next few years, we don’t stand much chance of meeting acceptable air pollution levels, either. Mike Hawes from the SMMT gave a thumbs-up to the committee of MP’s calls for additional government-wide support to help stimulate demand – namely, incentives.

The £40m kitty announced by the government earlier this year will be divided amongst the four aforementioned cities but will also benefit Derby, Dundee, Oxford and York, providing electric and plugin users with either the freedom to drive in bus lanes, plug in to street lights or at park-and-ride sites, or park for free. If we’re serious about hitting UK fleet and air quality targets by 2020, though, perhaps such schemes should be rolled out to the major cities of Manchester, Liverpool and Leeds without delay. Local authorities no doubt require some of the revenue generated from council-run car parks for filling in potholes, but it would be great to see more and more towns follow suit with green car incentives, along with enhanced financial support for businesses from HMRC.

With the 190 millionth vehicle9 having driven along the M6 Toll, maybe it’s time for someone to make a bold move and allow qualifying cars and vans to travel on it for free, particularly businesses who have invested money and confidence in hybrid or fully electric vehicles. Crossings like Dartford and those over the Severn could also be looked at, and another bold move to encourage accelerated ULEV confidence would be for airports like Heathrow – that already lets such vehicles park for free in short-stay car parks providing they are plugged in and being charged – to provide free parking for all eligible cars and vans. Organisations like the National Trust and the Canal & River Trust could even offer discounted membership and free parking for ULEV drivers, and supermarkets and gyms can surely think of additional incentives, too.

Somebody will inevitably lose out on revenue somewhere in the chain in the short term, but without one or more parties sticking their necks out and showing how important green vehicle uptake really is for the environment, there will be a fair few nerves come 2020.

 

 

 

Sources:

  1. https://www.arval.co.uk/about-arval/cvo
  2. http://www.acfo.org/news/details/13-07-2016/uk-fleets-predicting-fall-in-diesel-use-over-next-five-years-
  3. http://www.telegraph.co.uk/finance/newsbysector/transport/11589548/Norway-to-slash-electric-car-perks-because-its-costing-government-too-much-money.html
  4. http://www.heraldscotland.com/news/14251473.Glasgow_scraps_free_parking_for_electric_cars___as_hybrid_owners_accused_of__abusing__charging_bays/
  5. http://news.leeds.gov.uk/council-to-introduce-free-parking-for-low-emission-vehicles
  6. https://www.gov.uk/plug-in-car-van-grants/what-youll-get
  7. https://www.theguardian.com/environment/2016/sep/01/uk-government-falling-behind-on-electric-car-pledge
  8. https://www.theguardian.com/environment/2016/jan/25/electric-cars-to-use-bus-lanes-in-uk-cities
  9. http://www.fleetnews.co.uk/news/manufacturer-news/2016/05/05/190-millionth-customer-to-pass-through-the-m6-toll