Momentum maintained despite mixed messages
Catherine Bowen, senior policy advisor, BVRLA, on why it's still full speed ahead for the EV shift despite the 2030 ICE ban delay
Catherine Bowen Senior policy advisor, BVRLA
When the Prime Minister pushed back the phase-out dates for the sales of new ICE vehicles in September, the reaction was deafening. A cacophony of voices spoke out in response. Some decried it as a stake through the heart of the nation’s Net Zero progress. Others welcomed it with open arms and celebrated a return to realism.
As is so often the case, the situation is not black and white.
The reality is that there is no single route to take. Each differing vehicle type or use case has its own journey – and the progress of each varies greatly. The decarbonisation divide is growing, with those leading the transition leaving others lagging far behind.
Our Road to Zero Report Card, launched in September, brings that divide to life. It shows that the company-provided car sector is well on its way and will be fully zero-emission vehicles (ZEV) ahead of official targets. Others face much harder transitions. Vehicle rental, the retail market and commercial vehicles have a mountain to climb if they are to adopt zero-emission vehicles in the volumes required.
They are the cases that may have breathed a sigh of relief with the phase-out deadlines becoming a little more forgiving.
The company-provided car market has seen support via grants on new vehicle sales and fair taxation via Benefit in Kind. The proportion of zero-emission vehicles provided via business leasing has grown from 17% in 2022 to 28% this year. New company car orders and vehicles provided via salary sacrifice are accelerating the shift, with the majority of additions being for battery electric vehicles.
Percentage of zero-emission vehicles provided via business leasing
That positive performance falls away when looking at other sectors. Demand for ZEVs via personal leasing is strong and ahead of the wider market: 19% of new additions are electric. There are signs that demand is slowing though, with Q1 2023 representing the first quarter-on-quarter fall in EV demand from private motorists.
The drifting interest seen in personal leasing is replicated in the rental sector. Electric vehicles are underutilised (62% average utilisation) in short-term rental when compared to their ICE counterparts (82%). Customers are apprehensive about the associated costs and ease of use of EVs. More driver education is required but needs time to take hold.
“The reality is that there is no single route to take. Each differing vehicle type or use case has its own journey – and the progress of each varies greatly. The decarbonisation divide is growing, with those leading the transition leaving others lagging far behind”
Alongside that need for education, the BVRLA has set out several recommendations in the latest Road to Zero Report Card. They include considering further public charge point regulation and creating more collaboration between local authorities and companies from the fleet sector. More effective, more visible infrastructure will enable us to make huge strides in overcoming the lack of confidence.
A much more direct lever influencing our progress towards net zero targets is the ZEV mandate. The mandate sets annually increasing targets for the sales of zero-emission cars and vans through to 2030. It is the mandate and not the phase-out target that will have the biggest impact on fleet decarbonisation over the next seven years.
The Government recently provided an update on the terms of the mandate, following a consultation in March. Despite the high-profile announcement from the Prime Minister, the mandate remains largely unchanged for cars. The trajectory, determined by the proportion of new car sales that must be for zero-emission vehicles, is unchanged and the mandate still comes into effect in January 2024.
More notable changes came on the van trajectory and it is good to see that government has acknowledged the challenges hampering the current van transition. Other areas that have seen movement – and that were pushed for by the BVRLA – include greater recognition of the role of car clubs and shared mobility, a focus on an accessible transition with confirmation of additional credits for wheelchair-accessible vehicles (WAVs), and the introduction of a robust review mechanism.
The evolution of the mandate, and the clarity provided, will wrestle back some of the confidence that the phase-out delay dented. Businesses grappling with how to manage the transition in the most challenging market segments will have welcomed the breathing space afforded by the recent announcements.
That said, the breathing space cannot be wasted and the fleet sector needs to keep its foot on the throttle. The timings of the mandate mean that the pace of the transition will need to accelerate in the years ahead. The Road to Zero is building momentum and we will continue to work with government officials and stakeholders in the automotive and energy sectors to make sure it is not lost.
