INTERVIEW > Peter McDonald, head of fleet, Nissan
THE RIGHT PLACE AT THE RIGHT TIME
Peter McDonald, Nissan’s head of fleet, speaks to EVFW about the brand’s plans for corporate sales and how it’s well positioned for the 2030 ICE ban.
Can you give us an idea of your fleet plans moving forward with regards to Nissan?
“I guess at a corporate level, there’s evidently been an issue around supply. For example, things like semiconductors, which are hitting the whole industry and affecting our supply chain. So, yes, as we come out of lockdown, there are concerns around what we can supply. This is industry-wide and every other OEM is also being caught up in shortages and some of the supply chain issues that have occurred.
“Qashqai and Ariya EV are the key fleet launches. We get Ariya in early to mid-2022 but in the scheme of the fleet market and EVs, that’s now not that far away. So, we won’t be far from being able to pre-order the car, from having residual values and pricing in market. It will take us a bit of time to get physical vehicles. But we’re not far from being in the launch phase for Ariya.
“We do have some development in the electric LCV space as a brand. We’re number one seller at the moment with e-NV200 – that is for the most electric vans in the true fleet market – and have been for many years. We launched over seven years ago. I’m unable to share a lot now, but what I can say is that we’ve got a new electric LCV platform. Again, that’s going to be mid-2022, which sounds a fair way away, but we know that buying cycles of major fleets, and the considerations around electrical LCV in particular, mean that we’re also not that far away from talking about those two particular vehicles. They, from a fleet perspective, will be the ones we primarily lead with.”
So why the focus on these particular Nissan models?
“Well, together with the Leaf we’ve got today, they are the cars we predominantly sell to institutional fleets. These are the sorts of organisations that have a fleet management team and would read your magazine. They would be regularly building relationships with OEMs, would use these vehicles for operational purposes. These sorts of fleets are moving very quickly and are very interested and aware of the need to change to electric LCVs. The majority of our major fleet business is done with battery electric vehicles today. So, Leaf and e-NV200, and going forward we expect that Ariya and our new electric LCV next year, will play a big role too.
“Customers, particularly in electric LCV, are all aware that they need to change by 2030 and 2035. However, switching an operational-use LCV into an electric one has some complexity to it. All of a sudden range does become very, very important. It is not like your company car or your passenger car is a private customer, where it just gets driven a little bit and it can wait to be recharged – that’s your time. With an electric LCV, evidently every hour that it is being charged and not being used, when it could or should be – is an impact on that organisation and their efficiency. So, things like range and how you charge them end up being very important. The fleets we work with end up trialling them for a period of time, they end up demonstrating a few, buying a few, find where the sweet spots are in their fleets. Then advocate and build out from that. So, we are heavily involved in those sorts of discussions across government and major fleet institutions and we expect that to continue.”
The Nissan Leaf's position in the top 10 sales underlines that the market is generally moving very quickly into BEVs.
Leaf still remains very popular with fleet. Have you any further plans for its development with the move to EV?
“The biggest segment is what we at Nissan call the C-hatchback segment, or what Volkswagen calls the A-segment; effectively where the Golf, Ford Focus, Audi A3, Seat Leon and Škoda Octavia are. That segment is by far the biggest and firmly where Leaf is positioned. There are 25 to 30 different brands that have a C-hatchback model and we were 17th in 2019. In 2020, Leaf got to ninth and in March this year, it was in the top five. Golf still leads the segment, together with Mercedes-Benz A-Class, so they’re the two biggest but we perform stronger than the Octavia, the Leon, the BMW 1 Series. So, for me, that’s just a recognition that the marketplace is generally moving very quickly into battery electric vehicles.
“The C-segment hatchback is the heartland of fleet – full of corporate user-choosers, mid-level managers and job-need vehicles. That’s firmly where we see Leaf performing and it’s performing very well, not just in the context of a battery electric vehicle, but in the context of the segment in totality.
“Evidently lots of people in that segment are switching out of what were petrol and diesel products into things like battery electric, like leaf. I guess they’re doing it for two reasons. One is a substantially lower Benefit-in-Kind. Last year it was 0%, it’s 1% this year, but it’s still a massive saving versus what you would pay on a combustion engine vehicle. The other aspect of it is that many corporates are wanting to reduce their CO2 footprint. Many of them are working more and more to restricted choice lists, where the vehicle needs to be below a certain level of CO2.”
Ariya is going into the C-SUV segment – one of the biggest for fleet. Do you think there will be much transfer from the Leaf or is Ariya a chance to conquest?
“I think the bigger market is the conquest one. For the majority of people we’re selling battery electric vehicles to, it’s the first time they’ve had them. We were the first mainstream brand to sell EVs and have been for 10 years now. So yes, we do end up having repeat purchases, but the majority of our Leaf sales go to those taking battery EVs for the first time.
“Many organisations are introducing things like salary sacrifice programmes, where previously, you might give your employee a cash allowance to go out and lease a vehicle. The battery electric vehicle works incredibly well on a salary sacrifice company car programme. A lot of drivers are switching back and identifying the savings. Corporates are very supportive of that because it moves things that were grey fleet into fleets that they manage. Plus, it supports carbon reduction initiatives.”
“The majority of our Leaf sales go to those taking battery EVs for the first time.”
How has Nissan’s fleet businesses changed since the start of the pandemic?
“I guess the differentiator for Nissan is that we’ve got supply, we’ve got product now and we’ve got experience. Plus, we’ve got credibility and heritage – because we’ve been doing it for 10 years.
“So that makes us quite different in that market, rather than many who’ve got a battery electric model coming tomorrow, or next year – we’ve got them now and we’ve sold them to a number of fleets.
“With the electric LCVs, there are less OEM brands playing in that space. There are less government incentives – there’s no Benefit-in-Kind equivalent. There are many more considerations to making electric LCVs work. You need to think about where you’re going to charge them – you can’t just charge them at people’s houses because it’s not a perk, it’s a job need vehicle. How do you reimburse them for that electricity? How do you charge them? You can’t have a van that you have to charge 10 times a day – because that’s really inefficient. So, you’ve got all those sorts of considerations that make electric LCVs that much harder.
“Van demand has been huge, you don’t go shopping as much anymore. Well, you don’t physically, but you might have an Amazon or Tesco delivery – or whatever. So, all of those organisations and all of their support organisations, all the people who rent or provide or lease to them permanently or temporarily – there’s been huge demand there.
“Our van performance has been strong in the last year. We’ve increased our share of the LCV market that we take. Electric LCV has been prominent, we are still the number one supplier. That’s the really exciting bit and the bit that we engage with big, serious fleets. They are very interested in trialling and taking best practice. DPD is notable for the number of electric vehicles it runs and it’s experienced with them. But there are few other fleets that have that level of experience in trialling them and making them work. I guess it’s our view that in a world where you have to use alternatively fuelled product going forward, the people who make it work, have a competitive advantage. That’s what we want to support.
“I think the Benefit-in-Kind change on passenger cars made a massive impact, you only have to see the registrations in January, February and March 2020 and then the difference in April. There was a bit of pent-up demand, as before that date, I understand a number of the leasing companies couldn’t quote two different levels of Benefit-in-Kind to the customer. So, you have a quote, and you don’t want to misrepresent it. You don’t want to put a lower level of Benefit-in-Kind in, then the customer takes the vehicles not realising this. I think passenger cars have been much easier to implement the transition, because there’s been a Benefit-in-Kind advantage.
“There have been a lot of manufacturers that have come into the market, every brand really has got a battery electric vehicle coming. A lot of people have got off-street parking, so have been able to put a charger on the side of their house, therefore, that transition for the driver has been relatively easy. So yes, I think with what the Government’s done, there’s been a dramatic uptake on battery electric vehicles and true fleet in the passenger car market, that has worked really well for us. Where we see a bigger challenge is around the electric LCV because a lot of those dynamics aren’t the same. There are less manufacturers, there are less fleets of experience, there are less incentives to do it. Everyone knows it’s got to be done by 2030, but it’s got lots of operational complexities to it.”
What are your thoughts regarding the 2030 ICE ban? It sounds like Nissan is in a really good position.
“We are supportive as a brand. We think it’s a good thing and we’ve got the right products to support it, both currently and in future development. We believe we are doing the right things to help fleets transition.
“It’s daunting changing your fleet by 2030. Evidently, there’ll be lots of positives for the environment in the process. We applaud the fleets that are trying to make that transition now. But it’s not easy. I think the only way fleets will get there is by trialling. I wouldn’t recommend to any of them, that they go out and buy hundreds of electric LCVs tomorrow. I would recommend that they ask us for demonstrators then trial it, then maybe they loan it out to a driver community. Maybe they give it different distances and different weights and different weather patterns and all sorts of different things to test, you know, capability and performance in real life. We’d recommend those fleets trial some electrical LCVs – the sooner the better.
“We hear stories around, things that feasibly wouldn’t happen on paper. You’d look at it and go, ‘That driver does such mileage on a day, it would never work to move to a battery electric vehicle with lower range, and they’ll be charging multiple times a day.’ We know a lot of fleets that have changed the way their drivers use the vehicle, they do different routes with them, they use them in a different way, or charging in a different way that actually makes the vehicle as efficient as a petrol or diesel level was and obviously they’re getting the whole life cost benefits an electric LCV provides – but you only get there through trialling.
“A good example is what Gloucestershire Police force did. I think 20% of their fleet is now electric. They started out by borrowing and buying small numbers of vehicles trialling and seeing if it worked on their fleets. Evidently, high long-range pursuit is hard for a battery electric vehicle, but as a panda car, it works really well. They got advocates, established that it works and that he driver communities were very happy with it. Then tested it further.”