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EVs attracting drivers back to company car schemes

960 640 Stuart O'Brien

Employees who have previously taken cash options are returning to company car schemes in “noticeable” numbers thanks to electric vehicles (EVs), reports Arval UK.
 
Shaun Sadlier, head of consulting at Arval UK, said this was something that was predicted when the latest zero and low benefit-in-kind rates for EVs were unveiled in 2019, but is now becoming increasingly more apparent:
 
“Many cash takers liked their company car but didn’t like paying what they perceived as high benefit-in-kind and that was why they opted-out. Now, with low benefit-in-kind in place for EVs for at least five years, many more are now returning to company car schemes.
 
“We predicted that this would start to happen some time ago, but it’s now becoming noticeable In several of the major fleets with which we work. It’s a welcome development that will feed demand for zero-emission vehicles and lead to wider, faster adoption.”
 
Sadlier added that, while benefit-in-kind was the key attractor in choosing a zero emission vehicle, there were also a range of other factors in play.
 
“If you talk to fleet managers and their drivers, there’s a lot of enthusiasm around the vehicles themselves. It’s as simple as many people really liking EVs as their day-to-day mode of transport. We are beyond the early adopter phase and heading into mass-acceptance.
 
“All it takes is a couple of EVs on a fleet to disprove the reservations some people hold about these vehicles. They can see that misgivings such as range anxiety are actually of limited importance for the vast number of journeys that are made.
 
Arval UK recently updated its own company car scheme to increase adoption of EVs and the move paid off with almost two thirds of its company car drivers making the switch so far. 
 
“All of our consultants and many of our sales team have switched to EVs. They act as ambassadors for the technology, developing personal experience to share with customers, friends and family – as more people drive EVs, consumer confidence will increase. Coupled with the growing number of different models that are available, plus the recent 2030 announcement, it’s not an exaggeration to say that we can all play our part in a zero-emission future and choosing an EV is a step in that direction.”

IFS: New taxes required to replace fuel duty

960 640 Stuart O'Brien

The rise of electric vehicles combined with current government polices towards less fuel duty mean new taxes will be required to plug an inevitable funding shortfall.

That’s according to a study by the Institute for Fiscal Studies, which asserts that cutting fuel duty by 2p per litre in the upcoming Budget would cost £1 billion a year in lost revenue.

That’s on top of the £5.5 billion lost since 2010–11 arising from the a failure by government to increase rates in line with CPI inflation.

The FSI says revenue from fuel duties now stands at £28 billion a year, which is 1.3% of national income. Revenue peaked at 2.2% of national income in 1999–2000. Had it remained at that level, the exchequer would currently be getting an extra £19 billion.

In addition, the FSI says the government’s commitment to reaching zero net emissions by 2050 means that revenue from fuel duties will completely disappear over the next few decades.

As such, the FSI says new taxes are required which can gradually replace fuel duties. These should reflect at least distance driven, and ideally vary according to when and where journeys take place. As a result, those driving in busy places would pay more, but the majority of journeys would be taxed less heavily than at present.

Rebekah Stroud, co-author of the report and a Research Economist at the IFS, said: “Cuts to fuel duties over the last two decades have contributed towards revenues’ being £19 billion a year lower than they would have been. Another 2p cut, as reportedly mooted by the Prime Minister, would cost a further £1 billion a year.

“The bigger challenge is that revenues are now set to disappear entirely over coming decades as we transition to electric cars. The government should set out its long-term plan for taxing driving, before it finds itself with virtually no revenues from driving and no way to correct for the costs – most importantly congestion – that driving imposes on others.”

Image by IADE-Michoko from Pixabay

Infrastructure and tax top list of fleet buyer concerns

960 640 Stuart O'Brien

A lack of road infrastructure causing greater congestion and increased vehicle taxation are the two biggest issues facing fleet and mobility managers in the next five years.

The finding comes from the 2019 edition of Arval Mobility Observatory, which covers 3,930 fleets and asks a wide ranging set of questions about fleet and mobility trends.

When asked what they expected to be the main challenges facing them in the next five years, 49% replied lack of road infrastructure causing increased congestion, 30% increased vehicle taxation, 19% unclear Government policy towards transport, 19% implementation of alternative fuel policies, 16% increased driver personal taxation and 16% the introduction of more Clean Air Zones in urban areas.

Shaun Sadlier, Head of Arval Mobility Observatory in the UK, said: “The breadth of issues mentioned in response to this question shows that fleet and mobility managers are facing some very difficult challenges over the next few years.

“Probably the most interesting aspect is that the majority of these issues are linked to external regulatory and policy factors that have an impact on fleets, rather than being practical issues. 

“Some of these, such as Clean Air Zones, are generally supported by fleets who are well aware of the need to make their transport activities as environmentally responsible as possible. However, the fact that 19% of fleets believe Government policy is unclear and that large numbers mention both vehicle and personal taxation is certainly frustrating.

Sadlier added that he was unsurprised that the issue of road infrastructure causing congestion had topped the list of challenges.

“When we talk to fleet and mobility managers, there is a general level of concern, not really over the building of new roads, although these are needed in some places, but at the condition of existing ones and the impression that they are not being used to their maximum efficiency.”

He also said that fleet recognition of the challenges arising from the switch to wider fuel diversity, especially widespread use of electric vehicles (EV), was understandable.

“Cars and vans have been almost exclusively powered by combustion engines for more than a century and a fundamental shift to having a relatively high EV penetration into fleets definitely represents a change.

“However, our experience to date is that many of the factors that are perceived as obstacles can be overcome relatively easily with the right approach, and we are supporting many businesses through this transition both in an advisory and practical manner. 

“Generally, fleets that have made the switch to EVs are very positive about the experience.”

Main challenges expected in terms of fleet management in the next five years?

Lack of road infrastructure causing increased congestion                  49%

Increased vehicle taxation                                                                         30%

Unclear Government policy towards transport                                      19%

Implementation of alternative fuel policies                                             19%

Increased driver personal taxation                                                          16%

Introduction of more Clean Air Zones in urban areas                          16%

Image by John Howard from Pixabay