INSIGHT

2021 READER SURVEY

MANAGING CHANGE

From flexible working to decarbonisation, fleet management is at the forefront of the biggest challenges facing businesses. The 2021 Fleet World INSIGHT Reader Survey, produced with Athlon UK, highlighted an evolving industry with some notable trends. Read on to see the trends that are affecting fleet policies, both now and in the future...

1 Fleet management remains crucial

The majority of organisations surveyed said they still have a fleet manager, though in many cases it’s a role with other responsibilities. Predictably, approaches vary by fleet size. Only 16.2% of small fleets (<25 vehicles) have a full-time fleet manager, compared to 93.7% of the largest (>200 vehicles), and none of the latter said that role was shared.

2 The vehicle mix is changing

Investment has continued. Only a quarter of respondents (25.7%) said they had fewer vehicles than two years ago, and most had scaled back their car fleet. With many employees still working remotely, recent growth is weighted towards commercial vehicles. It’s a potential challenge for a sector where, according to the SMMT, production is facing the biggest challenges due to ongoing semiconductor chip shortages.

3 Company cars are getting a green revival

HMRC data shows the UK’s company car population declined from 950,000 drivers in 2010/11 to 870,000 in 2018/19 – the most recent statistics available. However, most (72.6%) respondents still offer company cars, citing staff retention and employee duty of care as the most important reasons for doing so, while 22.6% said demand had increased during the last two years.

Growing demand is due in part to recent company car tax reforms. New tax bands were introduceGrowing demand is due in part to recent company car tax reforms. New tax bands were introduced in April 2020, including low Benefit-in-Kind rates for vehicles under 50g/km and especially for electric cars – set at 1% until April 2022, and 2% for the following three tax years. Although only half of respondents said they have a CO2 limit for company car schemes, incentives are pushing drivers towards the cleanest vehicles.

4 Grey Fleet is still a challenge

Most of the organisations surveyed (72.6%) said they allow employees to use their own vehicles for business, and almost half (45.7%) provide cash allowances in lieu of a company car. Those statistics were higher where organisations had recently scaled down their car fleets; at 90.0% and 70.0% respectively. Almost a fifth (18.5%) of those with no company car scheme reported offering cash alternatives instead.

Fleet managers are important here, too. Three-quarters (74.7%) of organisations with a fleet manager said grey fleet vehicles were subject to roadworthiness checks, compared to 66.7% of those without one.

5 Mobility credits are uncommon

Covid has radically changed the way businesses operate, and the Government’s travel surveys suggest public transport usage is recovering more slowly than road traffic. A quarter of respondents said they are now using rentals more frequently, but mobility credits are still an uncommon alternative to company cars, offered by just 5.1% of those surveyed. Most said there was neither the demand nor use cases to support doing so.

Most respondents said they were increasing the share of low-carbon vehicles on their fleets

6 Environmental pressure is mounting

Cars and vans accounted for a fifth of the UK’s CO2 emissions in 2019, and they’re at the centre of the regulatory radar as the Government pushes for net zero by 2050. In the meantime, two-thirds (66.2%) said they are operating within a Clean Air Zone or will be soon.

Most of those surveyed (66.7%) said they are increasing the share of low-carbon vehicles on their fleet. However, only a handful are actively monitoring their CO2 emissions.

Organisations without a fleet manager were also significantly less likely to be utilising telematics or route optimisation software to help lessen their environmental impact.

7 Electrification plans are well underway

The phase-out of non-hybrid cars and vans by 2030, and combustion engine models five years later, affects all fleets. Half of those surveyed (51.0%) already have electrification plans in place and most of those organisations (70.0%) added that they are confident they will be ahead of the Government’s deadlines.

8 Plug-in vehicles are already mainstream

Department for Transport statistics show just 1,880 plug-in vehicles were licensed in the UK at the start of 2001. Just over 10 years later, that fleet has surpassed half a million units and recent tax reforms have meant demand is fleet-weighted. According to the SMMT, two-thirds of BEVs and three-quarters of PHEVs registered during the first eight months of 2021 went to fleet and business users. This is reflected by the responses.

Although many fleets are used to driving these vehicles, longer range and faster charging times mean they have become as vital a part of the organisation as their petrol and diesel counterparts. Half (49.2%) of respondents provide them to job-need drivers.

Use cases for electric commercial vehicles are still limited; batteries are heavy, which means there’s a trade-off between range and payload, which is already lower than a diesel van. Renault and Stellantis will both launch the first hydrogen fuel cell vans within the next two years, complementing their city-focused battery-electric models. With hundreds of miles of range, short refuelling times and only water vapour at the tailpipe, hydrogen could find favour with commercial vehicle fleets before it becomes common for cars.

9 Drivers want to go electric

Some of the concerns about electric cars are familiar. Limited range and charging, and the higher up-front cost, still top the list. However, only 4.3% of organisations said their employees weren’t interested in making the switch.

Results vary depending on organisations’ electrification plans. Those who were actively looking to phase out combustion engines were less likely to be worried about range (58.3% of responses) than those without plans in place (68.9%). However, they were more likely to be worried about unclear incentives from government (25.0%) than fleets without electrification deadlines in place (15.6%).

10 Straightforward electric vehicle charging is a priority

Convenient charging is a cornerstone of effective electric vehicle deployment. A third of those surveyed (35.2%) require employees to have a chargepoint at home if they are taking an electric company car. Almost two thirds (64.8%) have charge points at work, and only a handful of respondents said they have no plans to offer this.

Home and workplace charging are important for keeping costs down. Public charge points can cost up to 69p/kWh, compared to a nationwide average of 5p/kWh for an off-peak domestic tariff. However, most fleet operators (78.3%) allow drivers to use public charge points and only 21.3% of them said they limit usage to specific networks, or cap mileage rates to encourage cheaper charging. Convenience counts.

VIEWPOINT

Lesley Slater // chief commercial officer // Athlon UK

The survey reflects positively that many fleet managers are early adopters of plug-in vehicle usage, but wider adoption isn’t without challenges. Business models need to change in order to better accommodate electrification – this isn’t just about a switch in fuel, it is about adopting sustainable business processes to support environmental and financial goals. Apprehension around the charging network and EV charging time are still barriers to full adoption. The recent news from the COP26 conference is encouraging and with Government targets firmly in place for a net zero future – changes in infrastructure and the accessibility and reliability of charging stations looks to improve – this should in turn improve consumer confidence in EV. It’s also clear from the survey there is a long way to go in the adoption of broader mobility budgets and further investment in a reliable, cost-effective public transport system remains a crucial target.

The role of the leasing company goes beyond just the procurement and funding of electric vehicles. At Athlon we are dedicated to influencing change and supporting all businesses sectors on their journey to full EV. As we see more drivers moving towards EV salary sacrifice and the role that grey fleets still play in supporting business travel, it’s important that this education goes beyond the board room and the fleet decision- makers across the whole business. It’s also clear from the survey that there is a long way to go in the adoption of broader mobility budgets.