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Two-thirds of fleet vehicles ‘ready to go electric’

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New research has found that two-thirds of vehicles (cars and vans) operated by private and public sector organisations in the UK are ready to go electric — contrary to increasing industry and media pessimism around electric vehicle (EV) adoption.

Geotab’s  ‘Taking Charge: On the Road to an EV Future’ report analysed driver data from 1.3 million vehicles across seven countries over 12 months. It found that fleets switching to EVs could reduce 2.2 billion gallons of fuel from conventional vehicles while avoiding approximately 19 million metric tons of CO2 emissions over the next seven years.

From the analysis, the UK was also singled out as by far the most ‘EV suitable’ market in Europe. That is despite having some of the poorest national EV incentives on offer compared to the other European countries in the report. France, Germany, Italy and Spain all currently offer EV buyers up-front purchase incentives*, whereas the UK government withdrew the Plug-in Car Grant in 2022.

Geotab found that 66% of light-duty vehicles (cars and vans) in the UK are ready to go electric and, crucially, save money for the organisations running them. The UK’s EV suitability compares favourably to other markets covered in the report, which includes Canada (with an EV suitability of 50%), Spain (43%), the United States (38%), Germany (35%), Italy (28%), France (20%).

The 66% figure for the UK is based on a typical seven-year replacement cycle for a fleet vehicle. Expanding this period to 10 years would increase the percentage of fleet cars and vans in the UK ready to go electric to 73%, based on the fact that EVs have a longer usable lifespan than their petrol and diesel counterparts thanks to service, maintenance and repair (SMR) savings.

“The idea that the UK is not ready for mass EV adoption is a fallacy,” said David Savage, Vice President for the UK and Ireland at Geotab. “On the contrary, it’s time for British businesses to ‘double down’ on fleet electrification – not just for the good of the environment and our collective climate goals but for their bottom line. A visionary CEO of a business operating a vehicle fleet could effectively pay their own salary by going electric, thanks to EVs’ financial savings.”

The Taking Charge study delves into real-world telematics data to understand the feasibility of transitioning from internal combustion engine (ICE) vehicles to EVs within light-duty fleets, and the potential financial and CO2 savings available.

The report reveals that by going electric, British private and public sector organisations could reduce the total cost of ownership (TCO) per vehicle by £13,279 over a seven-year period, equating to a saving of £876,414 on a large fleet of 100 vehicles.

These numbers were calculated using Geotab’s proven EV Suitability Assessment (EVSA) tool, which helps fleets transition to electric vehicles. EVSA uses telematics data to understand a fleet’s specific needs to make a tailored EV adoption recommendation. It maps the fleet’s driving patterns against real-world EV performance metrics to pinpoint which fleet vehicles can be replaced with an EV available in that market. The tool also provides a forecast of the financial savings and environmental benefits of making the switch, taking into consideration the purchase price along with fuel and maintenance costs.

When evaluating the suitability of replacing an ICE vehicle with an EV, Geotab looks at two essential factors: Is there a range-capable electric model that can meet the existing daily driving requirements and does it make economic sense to make the switch?  Driving patterns can have a major impact on fleet electrification potential as they determine whether a suitable replacement vehicle is available that satisfies the vehicle’s range needs while saving money.

For a replacement to be considered range-capable, it needs to be able to drive 98% of the days that year on a single charge. This 2% margin allows outlier days to exclude abnormal driving distance days outside of standard usage. For it to be considered suitable, the EV would have to be both range-capable and economical, i.e. have a TCO that is lesser or equal to a new replacement ICE model.

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Are Electric SUVs a viable alternative to diesel and electric vans?

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New analysis from Arval suggests Electric SUVs (eSUVs) are being chosen by some fleets as an alternative to diesel and electric vans.

The mobility specialist says that as long as the space, payload and towing capacity offered by eSUVs is adequate, they can bring a wide range of advantages over their electric van (e-van) counterparts.

Ben Edwards, Consultant at Arval, said: “We’re at a moment in time when, having largely completed electrification of their car fleets, many businesses are looking to their light commercial vehicles (LCVs) and wanting to complete a similar transformation. However, for some, the current e-van choices available present some operational issues for their needs, especially around range and payload capabilities.

“We have been working with several of these fleets and have presented the concept of using eSUVs as an alternative. It’s quite a radical idea in itself – replacing vans with cars – but it does have many benefits as long as a model with sufficient carrying capacity can be identified.

“These eSUVs will tend to offer better range than vans, often up to 250-300 of real-range miles, solving the key problem that these fleets wanting to electrify their LCVs are facing. Also, the security and safety features offered by the car choices are frequently superior, offering better protection for whatever products and equipment are being carried, as well as more driver safety features such as parking and lane keep assistance technology.

“Additionally, chargepoint accessibility eases with an eSUV compared to an eLCV, although there is innovation and investment in this space, with initiatives such as charge hubs and electric freightways being launched to cater for larger vehicle and tow-charge requirements.

“Supply is another benefit. Generally speaking, new electric SUVs are more easily available than vans, certainly for some of the models that fleets are adopting. This is important because businesses will tend to want to adopt an identical, standard SUV across all of their activities in quantities of hundreds.”

“Of course, there is a human resources advantage to this, too. Generally,drivers would rather have an eSUV than a van and the current benefit-in-kind taxation situation makes this viable for almost all employees and comparable with van taxation.”

Edwards said that the whole life cost comparisons between SUVs and vans were often broadly similar but that this was not always the number one consideration for fleets making this decision.

“The businesses making this move have often made corporate environmental commitments with comparatively short timescales and this is a significant driver behind their current decision making. They want to electrify quickly and the eSUV route is allowing them to achieve this.”

He added that some LCV racking and conversion companies were already taking note of the trend towards eSUVs and producing products especially designed for this sector.

“We’ve been working with supply partners to increase the practicality of eSUV models for specific clients and been pleased to find that they have already been thinking about these vehicles and how they can be made more practical as a van replacement.

“There is also the option of liverying the eSUVs, which can be done in a manner that presents a strong corporate image but can easily be removed when the vehicles are eventually defleeted, ready for private buyers in the used market.”

Edwards added that it was unclear whether the move away from vans towards eSUVs was a long term trend or a solution that would just last one or two replacement cycles.

“As a strategy, this is very much a reaction to current conditions when it comes to electrification. Crucially, we expect to see the range and charging infrastructure to support e-vans improving over the next few years while other options such as hydrogen could start to make something of an impact. The pendulum could yet swing in the other direction and increases the opportunity to choose a zero-tailpipe emission vehicle over a petrol or diesel van.”

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Confidence and calm urged as used car values drop

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Fleets and dealers should trust the data and maintain a cool head during a period of volatile values in the UK’s used car market, according to analysis from Cox Automotive.

Cox Automotive’s confidence in its forecast persists as we approach the final weeks of 2023. Its year-to-date baseline forecast of 5,545,530 is within 99.7% – or approximately 18,000 transactions – of the SMMT’s ‘actual’ figure of 5,563,576. While a downbeat Q4 is anticipated with weak demand and increased supply, Cox Automotive believes its 2023 used car transactions forecast of 7.15 million remains achievable. This represents a 4% year-on-year increase, but 3% below the 2010 – 2019 averages.

Philip Nothard, Cox Automotive’s Insight Director, said: “Despite current concern about used car values and the impact of this on retail sales, we remain confident in our full year forecast and believe the year will close on 7.15 million used car transactions.

“We anticipated that the second half of the year would be significantly slower than the first. Our view that a softening in consumer confidence combined with a return to the over-supply of new cars, resulting in depreciation levels not witnessed since 2015 and easing transaction volumes, has proved accurate.”

According to Nothard, the used market is now undergoing a transitional period, driving a realignment of values. He argues the importance of reflecting on historical data when evaluating the current situation. Over the past two decades, the UK’s average annual used vehicle transactions stood at 7.4 million, with peaks exceeding eight million only occurring in 2016 and 2017. The ratio of used-to-new transactions averaged 3.37:1, rising to 4:1 during the pandemic-induced pause in new car production.

He added: “Current trade values remain unrealistically high despite the recent trade drops. A remarkable four-year period with minimal depreciation has contributed to this trend, with oversupply and the return of discounts, deals and incentives in the new car market creating an unsustainable cost discrepancy. Quite simply, used cars have become comparably unaffordable; at the same time, demand has eased, and the market is adjusting accordingly. While this dramatic depreciation will bring about some short-term pain for some, we must remember that over the long-term the sector has enjoyed a period of healthy returns, and we’re now returning to where we ought to be.

“While the prospect of the UK’s used car market returning to eight million transactions is an outlier, the 2023 forecast of 7.15 million transactions is not out of kilter with historical demand. The sector has bounced back from the lows of 2020 and 2021, and now prices are aligning accordingly. Since May, we’ve observed a decline in wholesale values, reflecting the return of volume to a market still grappling with economic headwinds.

“It’s a cliché, but we urge everyone in automotive to keep calm and carry on as this realignment of values plays out,” Nothard said. “Looking ahead to Q1 of 2024, we anticipate some seasonal stabilisation but no substantial ‘bounce’.”

Turning to the EV market, Nothard believes that the recalibration of used EV residual values, gradually approaching parity with ICE vehicles, offers a positive trajectory for the electric vehicle market’s future. However, the outlook for EV values remains uncertain. The growing presence of EVs in the wholesale market, coupled with advancements in battery technology, may introduce fluctuations in electric vehicle values for some time to come.

Cox Automotive’s full new and used car forecasts for 2023 can be found here. Its forecasts for 2024 and beyond were recently published as a part of its fifth Insight Report, which also includes a deep dive into key issues currently facing dealers, OEMs and fleets.

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Government mandates and infrastructure investment ‘to fuel EV growth globally’

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Global EV sales reached 7.7 million units in 2022, up from 1.4 million units in 2018, and are anticipated to reach 51.6 million units in 2035, driven by government mandates and infrastructure investments.

That’s according to GlobalData‘s latest report, “Electric Vehicles Market Report, Update 2023 – Global Market Outlook, Trends, and Key Country Analysis,” which reveals that during 2022-35, the total EV market is expected to expand at a compound annual growth rate (CAGR) of 15.9%, whereas the passenger EV segment is expected to register a CAGR of 26.1%.

The commercial EV segment is expected to record a CAGR of 15% during the same period. The sales of battery electric passenger cars are expected to reach 44 million units by 2035 from 7.3 million units in 2022. The sales of battery electric commercial vehicles were 0.4 million units in 2022 and are anticipated to reach 7.6 million units by 2035.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, said: “The increasing prices of gasoline, growing EV infrastructure, including the number of charging stations, maintenance hubs and facilities related to electric vehicles, and growing concern about environmental pollution are the major reasons behind the increasing adoption of electric vehicles worldwide.”

China is the largest EV market in the world, with annual sales of battery electric vehicles (BEVs) of five million units in 2022. Being an early adopter of EVs, China has numerous local and international companies offering a range of EV models. The government’s focus on the promotion and adoption of EVs to reduce pollution is another important factor contributing to the growth of the EV market in China.

Saibasan added: “The Asia-Pacific (APAC) region is leading the EV market in terms of annual sales globally, followed by Europe and the Americas. In 2022, APAC accounted for 69.3% of the sales, followed by Europe with 19% and the Americas with 10%. The presence of market leader China in the APAC region is the key factor for its major share. The region is anticipated to hold the major share of the market of 41.4%, followed by Europe with 31.6% and the Americas with 19.4% by 2035.”

The US federal government has set a target to make half of all new vehicles sold in the country zero-emission vehicles by 2030 and to establish a suitable network of 500,000 chargers to support the agenda of making EVs more accessible to all Americans for local and long-distance travel.

In 2022, the European Commission and the European Parliament and Council supported a policy of supporting the zero-emission target by implementing all new cars and vans registered in Europe to be zero-emission by 2035. The governments of various countries in APAC are also increasingly investing in electric mobility. In India, Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) and FAME-II are the flagship schemes for promoting electric mobility. All these factors bode well for the EV market.

Saibasan concluded: “The increasing concern over environmental pollution and the growing number of targets and policies related to the net zero carbon emission economies of different countries have fuelled the global demand for EVs. Reducing global carbon dioxide emissions to net zero by 2050 is consistent with efforts to curb the long-term increase in average global temperatures to 1.5°C.  The global pathway to net‐zero emissions by 2050 requires all governments to improve and effectively employ their climate policies. To reduce greenhouse gas (GHG) emissions, countries are focusing on preventing the burning of fossil fuels for transportation and encouraging the use of EVs.”

Image by Lee Rosario from Pixabay

EV myths and misconceptions tackled in ATS white paper

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ATS Euromaster has published a White Paper with the aim of unpicking many of the myths and misconceptions surrounding electric vehicles on fleet.

Called EV Mythbusters, the firm has engaged the views of experts in the electrification field to provide a more balanced perspective on fleet electrification as the sector continues to grow.

The latest leasing report from the BVRLA has shown that the overall leasing fleet has grown marginally despite the lack of vehicle supply – by 0.3% – but behind the growth has been the increase in business contract hire (up 4% year on year) and salary sacrifice (up 34% year on year) supported by fleet sales up 39% year on year.

Electric vehicles accounted for 53% of all the new cars that were put onto business contract hire yet, with many of the national media titles continuing to take a strong anti-EV stance, misconceptions freely circulate about the suitability of EVs for fleets.

However, says the tyre and maintenance provider, that doesn’t mean that fleet managers and drivers can simply swap ICE for EV without a change of approach both to fleet management and driving.

“We fully support the move to electrification but there appears to be a high level of misconception disseminated at the moment. This White Paper shines a light on the myths to get to the truth about EV suitability, such as EV battery degradation and appropriateness of commercial vehicles for electrification,” said Jason Chamberlain, sales director at ATS Euromaster. “We’re not suggesting that fleet electrification is an easy task, and it will require a new mindset from both fleet managers and drivers, but it’s not insurmountable, and some of the stories surrounding EVs are at best misinformed or just false. This White Paper helps balance the narrative.”

Among the contributors to the White Paper are Dr Euan McTurk – Consultant Battery Electrochemist at Plug Life Consulting; Paul Kirby – eLCV Expert at EV Essentials; and Philip Nothard – Insight & Strategy Director at Cox Automotive.

The White Paper takes a look at the myths surrounding service, maintenance and repair (SMR), battery degradation, commercial vehicle fleet suitability, and EV residual values, and provides straightforward answers to the many uncertainties of electrification.

IAM Road Smart takes aim at reckless company car drivers

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Road safety charity IAM RoadSmart has expressed concerns around the percentage of at-work drivers who believe it’s acceptable to drive under the influence of drink and drugs.

It surveyed the safety attitudes and behaviours of 2,010 UK motorists and, astonishingly, found 31 per cent of those driving for work believe driving after using Class A drugs such as cocaine and ecstasy is acceptable, compared to 5 per cent of non-company car drivers.

The survey also revealed that over a quarter (26 per cent) felt it was acceptable to drive when they may have drunk too much alcohol, and 24 per cent would drive after using cannabis. In both cases, only 5 per cent of non-company car drivers felt it was acceptable.

Highlighting the differences between motorists driving for work and non-company car drivers, IAM RoadSmart’s Driving Safety Culture Report found 21 per cent of company car drivers had regularly or often ignored a red light within a 30-day window compared to 3 per cent of other drivers.

The research also found that 21 per cent of at-work drivers often read a text or email whilst driving compared to 3 per cent of other drivers. Even more dangerously, 19 per cent said they often typed or sent a text while driving (compared to 2 per cent of non-company car drivers).

The latest figures from the Department for Transport (DfT) revealed up to a third of all road incidents involve someone who is at work at the time, this could account for over 20 fatalities and 250 serious injuries every week.

Neil Greig, Director of Policy and Research at IAM RoadSmart, said: “It is incredibly concerning that this latest research shows we still have far too many drivers who don’t understand the dangers of driving under the influence of either drugs or alcohol, and not acknowledging the danger they pose to themselves.

“By choosing to ignore key safety features like red lights or even using social media whilst driving, you are putting yourself at much higher risk of being involved in a crash. With a third of all incidents involving people driving for work on UK roads, businesses also need to hold themselves accountable for the responsibility they play in keeping their workers and other road users safe.

“IAM RoadSmart is calling on all fleet managers to adopt best practices such as checking licences, monitoring driver performance, and offering coaching to their most high-risk drivers. Not only will this save lives but also bring a direct benefit to the profitability and competitiveness of hard-pressed UK plc.”

Only 15% of digital transformation projects reach completion

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New research shows that businesses have faith in technology to boost their productivity, but are facing major knowledge and skill barriers to complete their digital transformation projects.

European businesses expect technology digital transformation projects to boost their productivity by an average of 38% in just 3 years with overall Return on Investment (ROI) expected in just under 5 years, senior decision makers have reported. But so far, on average only 15% of organisations have completed their digital transformation projects.

The survey, carried out by independent research company Opinion Matters and commissioned by Panasonic Connect Europe, questioned 300 senior decision makers with responsibility for business digital transformation across the UK, France and Germany.

Almost 40% of respondents said they felt their organisation was lagging behind competitors when it came to digital transformation. The major barriers to deploying digital transformation technologies were: Lack of internal knowledge (35%), lack of internal IT people resource and skills (32%), concerns about the interoperability with existing IT infrastructure (30%) and a lack of external specialist IT support or awareness of specialist providers (30%).

“This research shows that European businesses understand that the latest technology solutions can transform their business operations and help them take major strides forward in productivity but for many there are still obvious barriers to overcome,” said Jan Kaempfer, Marketing Director for Panasonic Connect Europe.

“Businesses have a lack of internal expertise and resource and are struggling to find the external specialist support they need to execute their plans. This was precisely the reason why Panasonic Connect Europe was formed just over a year ago – bringing technology hardware, software solutions and service expertise together to help business-to-business organisations address their digital transformation challenges.”

Used EV sales up, but overall demand for second-hand cars falls

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The UK’s used car market declined in 2022, down -8.5% to 6,890,777 transactions, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT).

The performance saw 640,179 fewer vehicles changing hands than in 2021, and remains -13.2% off 2019’s pre-pandemic total, as the squeeze on new car supply – primarily due to the global shortage of semiconductors – restricted stock entering the second-hand market.

Transactions increased by 0.8% in December in the first monthly rise since February, and while Q4 was down -4.3%, the third successive quarterly decline, it was not as steep as in quarters two (-18.8%) and three (-12.2%).2 This reflects the renewed growth seen in the new car market, helping more vehicles enter used car stock.

Used battery electric vehicle (BEV) transactions bucked the overall trend, recording their best-ever annual performance with a record 71,071 units finding new owners in 2022, a rise of 37.5%, and boosting their overall market share to 1.0%, from 0.7% in 2021. Robust demand for other alternatively fuelled vehicles continued, too, with sales of hybrid electric vehicles (HEVs) rising 8.6% and plug-in hybrid electric vehicle (PHEVs) transactions up 3.6%.3

Combined, however, electrified vehicles represented just 4.1% of the market (up from 3.3% in 2021) and while transactions of used diesel and petrol cars fell by -11.8% and -7.7% respectively, they remained the dominant powertrains with a combined 6,594,880 units changing hands.4

Mike Hawes, SMMT Chief Executive, said: “While the market headlines are negative, and reflective of the squeeze on new car supply last year, record electrified vehicle uptake is a bright spot and demonstrates a growing appetite for these models. With new car registrations growth expected this year, more of the latest low and zero emission models should become available to second owners. Accelerating uptake is key and will be dependent on drivers being assured of a positive ownership experience. This means ensuring charging infrastructure keeps pace with demand as more new and used car buyers make the switch to zero emission motoring than ever before.”

Used car buyers went back to black as it proved to be the most popular colour for the year, accounting for a fifth (21.6%) of the market. Blue ranked second, with 16.4% share, and, despite grey topping the new car market, it ranked third for used cars at 16.3% market share. Some buyers opted to add a splash of colour to their journeys, with 4,461 pink, 6,708 turquoise and 18,658 bronze used vehicle transactions during the year.

In terms of market segments, all sectors saw transactions decline aside from dual purpose, which was the third most popular body type, recording a small growth of 0.8% as just over a million changed hands. Superminis once again took the title for most popular segment, taking a third of the market (32.3%) despite recording a -9.0% fall in volumes. Following behind, lower mediums were the second most popular and were responsible for 26.3% of the market, but also noted a -9.6% decline. The smallest volume segment type was luxury saloons with a 0.6% market share.

Connected EVs save fleets 15 tonnes of CO2 per vehicle, per year

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European fleets using EVs have cut their carbon emissions by more than 15 tonnes of CO2per vehicle, per year, equating to a fuel saving of 5,665 litres.

Webfleet published this information in the first instalment of Electrifying Data, a series of reports that map the commercial EV opportunity in exclusive telematics data. The first report provides clear insights on the fuel and carbon emission reductions that are made possible via fleet electrification.

According to latest government figures, in 2020 transport was responsible for producing 24 per cent of the UK’s total greenhouse gas (GHG) emissions, the country’s largest emitting sector . Furthermore, it was responsible for 33 per cent of nitrogen oxides (NOX) emissions and 14 per cent of particulates (PM2.5).

The decarbonisation of the transport sector sits at the very heart of our collective ambitions to tackle climate change, said Beverley Wise, Webfleet Regional Director for Bridgestone Mobility Solutions.

Fleet businesses have been leading the charge in the transition from ICE to EV vehicles, and this data reinforces the impact they can have in helping to deliver a more sustainable future.

Although electrification is gathering pace, it remains, however, a significant change management undertaking. Dedicated fleet management solutions such as Webfleet can play an important role in supporting fleets as they target net zero.

Taco van der Leij, Vice President of Webfleet Europe added: The significant CO2 savings shown in the Electrifying Data report emphasise how electrifying your fleet can have a significant environmental impact.

In Webfleet, you can access the Fleet Electrification Report, a feature that shows clearly which of your vehicles could be replaced with an EV. Following the fuel price rises in March of last year, we saw a 300 per cent increase in usage of this tool. So, it’s clear the electrification of fleets is top of mind for many businesses.

We want to show all fleets that making the move to electric mobility is a game-changer when it comes to transport decarbonisation.

UK’s automotive sector ‘faces weak recovery’ in 2023

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Following the release of data by the Society of Motor Manufacturers and Traders (SMMT), showing that the UK new car market was down 2% at 1.61 million sales in 2022, a leading analyst predicts recovery will be slow.

The UK new car market recorded its fifth consecutive month of growth in December, with an 18.3% increase to reach 128,462 new registrations, according to the SMMT daya.

That second half year performance was not enough, however, to offset the declines recorded during the first half of 2022. Despite underlying demand, pandemic-related global parts shortages saw overall registrations for the year fall -2.0% to 1.61 million, around 700,000 units below pre-Covid levels.

David Leggett, Automotive Analyst at GlobalData, said: “Major demand headwinds are building for UK households and businesses and there is a recession looming.

“GlobalData forecasts that the UK car market in 2023 will reach around 1.8 million.

“At that level, 2023’s UK new car market would still be around a quarter down on 2019’s 2.3 million sales.

“While there are signs of an easing of parts shortages that have constrained sales over the past two years, fragile supply chains and cost pressures will continue to be extremely challenging this year.

“Underlying new car demand is also going to be weak in 2023.

“I’m afraid a year of weak recovery is in prospect alongside ongoing uncertainties that deter investment in the sector.”