Fleet Europe °88 by Nexus Communication

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#88 02/2017

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Nexus Communication - Fleet Europe #88 - Periodic magazine - February 2017 - Deposit Office Liège X

GREEN FLEET & ELECTRIC POWERTRAINS • Make your choice: EV, Hybrid, Hydrogen & CNG • Fleets turning Green • The rise of the EV curve

EXCLUSIVE INTERVIEW CEO Gero Goetzenberger reveals the strategy of NEW Athlon

ANDY LEEDEN (AstraZeneca), Fleet Manager of the Year “Fleet Management is Change Management”

BlaBlaCar wants to go B2B

p.35

THE NEW SEAT ATECA

MAKING BUSINESS EFFICIENT AND ENJOYABLE

TECHNOLOGY TO ENJOY The New SEAT Ateca comes with powerful and efficient turbocharged TSI petrol and TDI diesel engines. There are both front-wheel and 4Drive options available, ranging from 85 KW/115PS to 140 KW/190PS with outstanding torque figures across the range, they meet every performance need and do it efficiently, resulting in modest running costs and lower emissions.

EFFICIENT ENGINES

TCO

CO2 EMISSIONS

With a combined lowest fuel consumption of 4.2-6.2, this SUV Ateca is efficient for its size.

SEAT FOR BUSINESS offers you quality vehicles that are cost-effective with a low Total Cost of Ownership and high Residual Value.

With CO2 emissions of between 111-141 in the smallest engines the SEAT Ateca is more environmentally friendly.

SEAT FOR BUSINESS Average fuel consumption: 4.2-6.2 l/100 km. Average CO2 mass emissions: 111-141 g/km.

SE AT.COM

CONTENT COST-EFFICIENT, SEXY AND GOOD FOR YOU

5-31 DOSSIER

Administrations change, as do their attitudes towards climate change. But the challenge for the planet – and for our industry – remains the same: How to adapt and stay successful. In Europe, the greening trend in car taxation is accelerating. An ever longer list of cities and metro areas is covered by Low Emission Zones. Restrictions on combustion engines particularly target diesel cars – the erstwhile favourite. As a result, customer preferences are changing fast, and corporate fleets need to rethink strategies and adapt policies. Fortunately, the need to change is met with a desire for change. Fleet and mobility managers are eagerly reshaping company car policies to fit the mobility profile of their employees rather than just taking into account their job and salary level. That shift to a driver-centric approach goes hand in hand with a wider range of products and services, offered by both car manufacturers and fleet partners. The greening of European fleets will continue at a brisk pace in 2017, for three reasons: it saves money, saves the planet, and enhances the company profile. In other words: green is sexy, cost-efficient and good for you.

Steven SCHOEFS Chief Editor, Fleet Europe

Green Fleet Management and Electric Powertrains Global giants go green......................... 6–7 Green taxation gains popularity.... 8–9 The green car snapshot................... 10-11 Bye, bye range anxiety...................12–14 The bridge to zero emission...... 16-17 Building up activation energy.... 18-19

42-43

The CNG alternative.........................20-21 A view on smart charging........... 22-23 RV's of electric cars......................... 24-25 Green Fleet Case Studies............26-29 The green tyre dilemma..............30-31

46-50

BUSINESS

MANAGEMENT

SMART MOBILITY

Gero Goetzenberger, CEO of new Athlon

Meet with Andy Leeden, AstraZeneca

How ALD Automotive goes Mobility

SMART MOBILITY

BlaBlaCar - Carpooling, a logical corporate solution………………………………………………………… 35

INNOVATION

Through the barricades, running the gauntlet………………………………………………………………… 36-37

BUSINESS

XXImo, Ubeeqo, SafeDriveProd - Three times Mobility rewarded…………38-39 Interview with Stefan Herbert, Mercedes-Benz Cars and smart……………………… 40

REMARKETING

2017, the year to watch RVs and EVs…………………………………………………………………………………………… 44-45

ANALYSIS

Fleet Holding Periods: Seeking for the ideal replacement cycle………………… 52-53 Fleet Holding Periods: Charging into the future………………………………………………………………………54

6 to 8 J U N E

2017 GLOBAL FLEET CONFERENCE Miami

EXPERT

Tony Elliott on Why there is fleet life after Brexit…………………………………………………………56-57

Going green pays off In Europe, excellence in fleet management needs to have a strong green component. It used to be that a commitment, to reducing the company fleet's CO2 emissions was enough to be 'green'. These days, all stakeholders realise that to be truly environmentally-conscious requires a more holistic approach. Elements of that approach include: a car policy that takes into account employee mobility profiles; welcoming alternative powertrains; rolling out a fleet policy that provides guidance on the tools and technology that are green, safe and cost-efficient. There are many ways to align your programme with the green solutions available. How you that, dear fleet and mobility managers, is up to you. We hope this dossier may provide some guidance and inspiration. In there, best practices of some of the most respected and effective European fleet and mobility managers. As they will tell you, going green pays off â&#x20AC;&#x201C; but only if you get serious about going green.

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Global giants go green Jonathan Manning

Some of the world’s largest and best known companies have pledged to reduce their greenhouse gas emissions in support of government commitments made in the COP21 Paris Climate Agreement. With the COP22 Climate Change Conference in Marrakech being held at the end of 2016, we want to know what they have done already.

THE ELECTRIC CONFERENCE FLEET The Renault-Nissan Alliance provided a fleet of 50 all-electric vehicles as the official passenger-car provider for the United Nation’s COP22 Climate Conference in Marrakech, Morocco last November. Delegates travelled in the Renault ZOE, Nissan LEAF and the seven-seat Nissan e-NV200 van. A year earlier at the UN COP21 Climate Conference in Paris, Renault-Nissan supplied 200 electric vehicles to shuttle delegates, the world’s largest EV fleet ever provided for an international conference. The cars travelled at least 175,000 km without emitting any CO2 tailpipe emissions.

The vehicle fleet performance of more than 200 of the world’s largest companies is under scrutiny after the businesses pledged to reduce their global emissions of greenhouse gases. The firms have committed to support the goals of the Paris Climate Agreement, which aims to limit the planet’s temperature rise to below two degrees Celsius. The multi-nationals, including Dell, CocaCola, Kellogg, Procter & Gamble, Sony, Ford, Toyota and Nissan, are all working with the Science Based Targets initiative, a partnership between CDP (formerly the Carbon Disclosure Project), World Resources Institute, World Wide Fund for Nature and the UN Global Compact, which helps companies to set ambitious emission reduction targets that are consistent with the latest climate science. NECESSITY OF REFERENCE By setting science-based targets, companies gain a clearer vision of how much and how quickly they need to transform their businesses in order to be part of the low-carbon economy. Galya Tsonkova, environment manager for Coca-Cola HBC, said, “In the past, companies would set targets without the necessary information or a solid point of

reference. They would just pick a round figure and aim for cuts of 20, 30, 40 percent, with no further justification, other than generic aspirations. Now, we have a target that is reviewed and approved by external, credible experts for alignment with relevant scientific methodology. That makes a big difference, both for external stakeholders as well as to our management.” A recent report by CDP revealed that while a majority of companies already have targets in place to reduce their carbon emissions, their current business plans do not go far enough to deliver on the world’s new low-carbon goals, set in Paris in 2015. THIRD PARTIES INVOLVED Importantly, the 204 businesses working with the Science Based Targets initiative are looking not simply to transform their own environmental performance, but also that of their own suppliers. Diane Holdorf, chief sustainability officer at Kellogg Company, said, “During COP21 [Paris Climate Agreement], we committed to reducing the emissions from our operations and energy use by 65 percent and to working with our suppliers to significantly reduce their emissions as well. Since then, Kellogg has asked 75 percent of our global FLEET EUROPE #88

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Mail delivery company PostNord in Sweden defined six areas for optimised green fleet management with the aim to increase energy efficiency with 25%.

suppliers to publicly report their emissions so that we can better measure our whole footprint.” A significant reduction in the total greenhouse emissions of the companies working with Science Based Targets would deliver a major benefit to limiting climate change. Together, these multi-nationals produce 627 million metric tonnes of CO2 emissions per year, roughly equivalent to the annual emissions of South Korea. Their ambitious plans to lower these emissions involve every area of their operations, from head office to manufacturing, logistics and distribution, with transport a key area of focus. The latest signatory, luxury goods group Kering, whose brands include Gucci and Saint Laurent, has committed to halve its direct emissions by 2025 compared to 2015. It will also reduce its indirect emissions from transportation and distribution, business flights, and fuel and energy use by 50% over the same timeframe, and emissions from purchased goods and services by a further 40%. DELL AND POSTNORD For technology company Dell, achieving emission reductions from business travel now involves avoiding the journey in the first place, according to David Lear, executive director of sustainability Dell. “We’ve embraced teleworking and other flexible work arrangements, which reduces our employees’ emissions by over 35,000 of metric tons of CO2 per year,” he said. Dell’s experience underlines the fact that a FLEET EUROPE #88

green focus doesn’t need to lead to an increase in costs. According to We Mean Business – a coalition of organisations working with thousands of the world’s most influential businesses and investors – businesses achieve an average of 27% internal rate of return on their low-carbon investments as they bid to cut climate change. PostNord, one of the few Science Based Targets companies with transport at its heart, accepted that money taken from its Environmental Fund to cover the anticipated costs associated with a science-based target would require a longer time to see a return on its investment. “But in fact, the one hundred-plus projects that have been implemented so far have actually seen a better and quicker return on investment than average for our company,” said Søren Boas, PostNord’s senior sustainability and environment advisor. PostNord delivers mail in Sweden and Denmark and is part of the DPD network for global logistics solutions, so green fleet solutions naturally lie at the heart of its environmental plans. “We have six clear areas in which we know we need to act,” said Boas. “They are: better utilising vehicle capacity; increasing fuel efficiency; investing in electric vehicles (one third of our fleet is now electric); using more biofuels; use of trains and reducing air freight; and making our buildings more energy efficient. We are aiming for a 25% increase in energy efficiency – which will lead to a reduction in our annual energy bill of $2 billions.”

27 %

THE AVERAGE INTERNAL RATE OF RETURN ON COMPANIES’ LOWCARBON INVESTMENTS

195

THE NUMBER OF COUNTRIES AT THE PARIS CLIMATE CONFERENCE (COP21) THAT COMMITTED TO LIMIT GLOBAL WARMING TO WELL BELOW 2°C

35,000

THE ANNUAL REDUCTION IN TONNES OF CO2 EMISSIONS ACHIEVED BY DELL THROUGH TELEWORKING AND OTHER FLEXIBLE WORK ARRANGEMENTS

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Green taxation gains popularity Erwin Boumans

BDO Tax Consultants

As a consequence of the efforts in progress around the world for globally greening the air we breathe, several Member States in Europe are subtly playing with the tax levers available to them in order to keep (or bring to) a fragile balance between tax revenues and a greener car park.

On the incentive side, tax reliefs are granted to alternative powertrains vehicles such as EV’s and in some cases like Ireland also to HEV’s and other AFV’s.

To achieve the above goal, mainly two paths are being followed; on the one hand a repressive taxation of the most polluting vehicles and on the other hand a policy of granting incentives in respect of ‘green(er)’ vehicles – either with a tax relief or a cash back subsidy upon acquisition or a combination of both.

In a nutshell, it is to be noted that (only) 20 Member States apply a CO2 based taxation scheme while incentives for alternative powertrains are available in 21 Member States. Of all 28 Member States, 16 have both a repressive and an incentive approach. Sadly, still a few have none at all!

By ‘green(er)’, we refer to alternative powertrains, for instance alternative fuel vehicles (AFV’s), electric vehicles (EV’s), hybrid electric vehicles (HEV’s), plug-in hybrid electric vehicles (PHEV’s).

RESTRICTED AREAS Besides taxation aspects, also other incentives are still being granted to ‘green(er)’ vehicles in respect of access to restricted areas in more and (major) cities in Europe.

In respect of repressive taxation, it is to be noted that a CO2 emission tax based policy is widely used across the European Union, but with some slight variations.

In e.g. Paris motorists will now, as from 16 January 2017 also need to display a “clean sticker” so police will be able to quickly see to what category (of which 6 exist) a vehicle belongs. The stickers will indicate the age of the vehicle, its engine and cleanliness on a scale of one to six.

In Romania, Croatia and Cyprus for example, the tax is only levied once upon registration of the car, meaning that the actual further use of the car will not be taxed on the basis of CO2 emissions. In other Member States such as Denmark, Finland, Germany and Greece for instance, the CO2 emission based tax will be levied on a yearly basis (annual circulation tax) during the entire life cycle of the vehicle.

At the other end, countries like Belgium and the United Kingdom also link the taxation of the use of a company car on the basis of CO2 emissions.

In Antwerp, Belgium, also a low emission zone will be introduced on 1 February 2017, whereby (in principle all) vehicles will be banned from the city center (for diesel passenger cars this means that they will at least need to meet the Euro 3 norm, in which case they will need a particles filter). Compliance will be monitored via

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smart cameras and fines of 125.00 EUR per infraction will be imposed (as from 2018 these fines will be increased up-to 350.00 EUR per infraction in case of repeated offenses). Antwerp is the first city in Flanders to implement such system and it will most likely not be the last. THE FUTURE LOOKS GREEN(ER) The above clearly shows that more and more countries consider the greenification of their vehicle park as an integral part of their fight against climate change. This is further being strengthened by announcement such as in the Netherlands, where it was stated that all cars sold will need to be “green” by 2035. Another example of this is that the already mentioned measure in France forms part of the plan of the current mayor of Paris, Anne Hidalgo, to combat pollution in her city (and elsewhere in France). In this framework she also already declared that she wanted the capital of France to be free

of diesel vehicles by 2020 and the whole of France even by 2025. Although the intentions are good, it remains to be seen whether the currently (some say “artificially”) subsidized vehicles are actually green(er) than their traditional counterparts. The “cradle to grave” approach towards EV’s was already mentioned in previous publications, but more importantly we also see that e.g. big hybrid SUV’s get all sorts of tax benefits to make them more attractive for their audience. However, in practice these vehicles are then often mainly driven using petrol, because their drivers do not want to be bothered with the hassle of charging it correctly. In addition, as vehicle taxation has and will always form a vital source of government revenue, it is to be expected that as soon as the car fleet has become green(er)… some other form of taxation will be introduced, in order to keep the budgets balanced.

From January 1 on, all motorists in Paris need to display a Crit'Air vignette on their vehicle. These vignettes are air quality certificates and the most polluting types will have limited access to the city.

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The best in Green is yet to come Dieter Quartier @DieterQuartier

AUDI A4 AVANT G-TRON (CNG) The clever integration of the gas tanks, the adapted 2.0 TFSI and the sustainable gas sourcing make this premium compact estate car the epitome of a holistic natural gas approach.

Exciting times are ahead, with OEMs promising realistic green alternatives. The internal combustion engine is not dead yet, incidentally.

BMW 530e (PLUG-IN HYBRID) The Bavarians take their class-leading power-to-efficiency ratio to the next level with the brand new 530e. It combines a four-cylinder petrol with a powerful lithium-ion battery and electric motor to offer 50â&#x20AC;&#x2030;km of electric range, emitting just 44â&#x20AC;&#x2030;g/km of CO2 (NEDC).

HYUNDAI IONIQ (HYBRID OR ELECTRIC) The sleek C-segment five-door hatchback Ioniq is the first car to offer three electrified powertrains to choose from: hybrid, plug-in hybrid or fully electric. It brings green mobility within reach of many company car drivers.

INFINITI QX50 VC-T (VARIABLE COMPRESSION PETROL ENGINE) The result of 20 years of R&D and a true technological marvel, this crossover with variable compression petrol engine offers the torque and efficiency of a diesel, without the harmful emissions.

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LEXUS IS300H (HYBRID) The recently facelifted premium Japanese compact saloon combines a highly efficient 2.5 petrol engine with planetary gears with an electric motor to achieve comfortable performance and emit 97 g/km of CO2 (NEDC).

MERCEDES S-CLASS (‘INDUCTIVE’ HYBRID) The facelifted executive saloon from Stuttgart will be the first to receive wireless inductive charging tech for its plug-in hybrid model. The Swabian starship also introduces a 48 V electrical architecture – a revolution in the automotive industry.

MAZDA CX-5 (LOW COMPRESSION DIESEL) The brand’s trademark SkyActiv technology includes a very low compression ratio diesel engine which does not need NOx aftertreatment to comply with the Euro 6 standards. The i-eloop capacitator helps achieve class-leading real-life fuel economy.

OPEL AMPERA-E (ELECTRIC) GM’s compact MPV is the first affordable electric car to offer more than 300 km of driving range in real-life conditions. Unlike its predecessor, the Ampera, it does not need an onboard generator.

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RENAULT ZOE (ELECTRIC) The compact French hatchback is now available with a choice of three electric powertrains offering 240 km, 370 km or 403 kilometres of range. The larger the battery, the longer it takes to charge.

VW GOLF 1.5 TSI (HIGHEFFICIENCY PETROL ENGINE) Further boosting petrol engine efficiency is the cylinder deactivation feature and the coasting function. By partially or entirely turning off the engine, it should be one litre more fuel efficient in real-world operation.

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FULL ELECTRIC

Bye, bye range anxiety Dieter Quartier @DieterQuartier

Now that automotive disruptor Tesla has shown the way, the time has come for the others to catch up and democratise full electric long-distance mobility.

To the surprise of many, electric vehicles have been around for over a century. Their considerable drawbacks back in the 1900s – lack of range, mediocre performance, cost – meant however they lost the battle to combustion engine cars. Today, the proliferation of the latter ironically enough entails the renaissance and probably domination (in the long run) of the former. In recent years, every OEM is indeed investing heavily in zero-emission cars in a bid

THE EXERCISE CALLED ELECTRICITY With the newest EVs giving you a real-world range of 200 to 250 km, they have become more than suitable for the daily commute to the office. Fast chargers or wall boxes are not an absolute must if you don’t need the car for several hours in a row. Frequent quick charging can damage the battery, incidentally.

If you consider EVs, you should investigate the possibility of installing solar panels – or at least get your electricity from a ‘green’ supplier. Otherwise, the emissions not produced by your EV will be produced elsewhere, i.e. at the power plant. Cold weather and motorway driving are two major battery drainers, by the way. Also, charging discipline is an absolute must.

to get their fleet average below 95 grams of CO2 by 2020 and avoid heavy fines. To support the development of (hybrid) electric vehicles, the EU is putting some wheels in motion to get the charging infrastructure rolled out. The top students in the ecology class still are Norway, the Netherlands, France and Germany. It is no coincidence that these countries are also the ones that give the highest tax incentives. THE TRAILBLAZERS The first praiseworthy attempt towards a ‘realistic’ EV in Europe (with a range of 90 km) was the Peugeot 106 Electrique from 1995 and its twin brother Citroën Saxo Electrique from 1997. PSA expected to sell 100,000 units over a period of 7 years, but the outrageous list price and total lack of charging infrastructure meant the counter stopped at 12,000. In 2010, compatriot carmaker Renault and its ally Nissan picked up the electric baton, doing what PSA couldn’t. With a range of 200 km and room for five, the C-segment Nissan Leaf grew to become the world's all-time best selling all-electric car, with 250,000 units sold. Its nephew, the B-segment hatchback Renault Zoé is the top-selling EV in Europe, with 55,000 cars sold since 2012. To make the Clio-sized Zoé less expensive to buy, Renault decided not to include the battery in the sales price (on most European markets). Instead, buyers were ‘offered’ the possibility to lease the battery, for approximately 80 euros per month. This complicated things for lease companies, who were weary of purchasing a battery-less car that would be virtually worthless on the used

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Sheer Driving Pleasure

EVERY FLEET NEEDS A LEADER. HEREâ&#x20AC;&#x2122;S YOURS. THE ALL-NEW BMW 5 SERIES. Find out more at www.bmw.com

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car market. Today, Renault has caved in to criticism and follows Nissan’s example. The 2017 Zoé can indeed also be bought with batteries included. GM CATCHES TESLA BY SURPRISE In trying to build the first affordable electric midsized car with a range of roughly 400 km – a psychological barrier for many hesitating customers – the perhaps overconfident Tesla Motors got overtaken by General Motors. The Detroit-based carmaker beat Tesla by at least year – it remains to be seen if Tesla will deliver and launch its ‘democratic’ Model 3 by the end of 2017 – with the recent market introduction of the Chevrolet Bolt (U.S.) and Opel Ampera-e, compact MPVs with a mind-blowing e-range of 500 km (theoretically).

The race to become the first affordable electric midsized car with a range of at least 400 km is on in Europe. Here the good-looking Opel Ampera-e.

INDUCTIVE CHARGING… ON THE GO!

Charging remains the biggest obstacle in operating an electric vehicle – especially for the ones that have large batteries. The more powerful the battery, the more range it provides, but also the more time it takes to charge. That is why Tesla is rolling out its Supercharger network, which allows Model S and Model X drivers to top up their batteries

in minutes instead of hours. An even better solution is on its way: inductive charging while the vehicle is stationary – at a traffic light or in a garage – or even while it is driving. What you need is a charging hub buried in the ground and a coil on the underside of the vehicle. Static induction is on the verge of breaking through, but the ‘dynamic’ variant is years away from being realised.

But GM’s crushing triumph is perhaps not that crushing after all. In December 2016, its German subsidiary Opel announced it would only be able to deliver limited numbers of the Ampera-e in 2017, following the slow production start in Michigan. Opel says it therefore prioritises countries that already have a well-developed infrastructure in place, such as Norway, Germany and France. By 2018, GM reckons to have enough production capacity to serve the remaining markets on the Old Continent. 2017, AN ELECTRIFYING YEAR By then, Opel may have lost customers to the competition, who are pulling out all the stops to either launch their first electric model or update existing models to (nearly) match the Ampera-e’s range. Take the 2017 Zoé, for instance. Renault’s small 5-door hatchback is now available with a larger accumulator pack offering a theoretical range of 370 (Q90 engine) or 400 km (R90 engine). Moreover, the Q90 comes with a 43 kW quick charger (Q90), allowing an 80% charge in just 30 minutes. The current Hyundai Ioniq Electric, which can travel 280 km on a single charge, is also available straight away and is expected to get a battery upgrade option. Such has already been the privilege of the BMW i3, which officially gets you 300 km from home with the batteries fully topped up. Same story at Volkswagen, which revised the e-Golf’s power reserve so it yields the exact same range as its fellow countryman.

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LAND ROVER FLEET & BUSINESS

THE INACCESSIBLE JUST BECAME A LOT MORE ACCESSIBLE

DISCOVERY SPORT The world’s most versatile compact SUV and the ideal vehicle for more adventurous companies. The 5+2 stadium seating is complemented by a hearty 1,698 litres of cabin storage. It’s also packed with class-leading technology, including Terrain Response® and a 9-speed automatic transmission for outstanding fuel efficiency. With CO2 emissions as low as 123 g/km and a competitive lease rate, it’s the practical choice for your fleet too.

LOWER EMISSIONS From 123 g/km CO2 HIGHER FUEL ECONOMY Up to 5.5 l/100 km LONGER SERVICE INTERVALS 2 years or 34,000 km

Ask your local Land Rover Fleet & Business contact for our attractive leasing rate. landrover.com/fleetandbusiness

Official fuel consumption figures for the Land Rover Discovery Sport in l/100 km: Urban: 10.7 – 5.5, Extra urban 6.8 – 4.2, Combined 8.2 – 4.7. CO2 emissions g/km: 191– 123. Please drive responsibly on- and off-road.

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HYBRID

The bridge to zero emission Dieter Quartier @DieterQuartier

Two decades after the first Toyota Prius, even the most obstinate naysayers have caved in. Car manufacturers who haven’t yet launched a hybrid, are pulling out all the stops to get it market ready. Toyota was way ahead of its time back in 1997 when it launched the mindboggling Prius, an eco-car with a then revolutionary powertrain that combined a petrol engine with an electric motor and non-externally chargeable batteries to bring down fuel consumption. It proved a sensible solution – a clean, albeit not very sexy alternative to diesel, long before Volkswagen unintentionally accelerated the downfall of the self-combusting powerplant so dear to European fleets.

DON’T LET FIGURES FOOL YOU More than anything, the real fuel consumption and emissions of a PHEV depend on the discipline of the driver to plug his car in as much as possible and on his driving profile. If you mostly use motorways and travel long distances, the batteries will be depleted in no time, meaning that they are nothing but dead weight and increase fuel consumption. Also, electricity does not come for free – certainly not when you use fast chargers. Last but not least, sometimes finding a public charging point can be time and indeed fuel consuming.

Slowly but surely, other carmakers – not least the ones producing heavy, luxurious vehicles with a large carbon footprint – followed in Toyota’s footsteps, but not entirely for the same reasons. They started to realise more was needed than just engine downsizing and lightweighting to meet the EU’s 2020 emissions obligations. By that year, the fleet average to be achieved by all carmakers is 95 g/km. A DIFFERENT AGENDA The premium car manufacturers figured out that hybrids with an externally chargeable, bigger battery would push the official consumption and CO2 emission figures far below the dreaded limits, bringing down their fleet average. A BMW X5 40e, for instance, which weighs 2.3 tonnes and produces a combined output of 205 kW, boasts an incredibly low 3.3 l/100 km and 77 g/km respectively according to the ‘New’

European Driving Cycle (NEDC) – which dates back to the previous millennium. A marvel of modern technology, this plug-in hybrid? Perhaps, but most of all an example of how carmakers build vehicles to comply with legal obligations and not necessarily to make them consume as little fuel as possible in practice. Many realworld tests across the globe reveal that hybrids, especially pluggable ones, burn considerably more petrol (or diesel, in the case of the Volvo V60 Plug-In Hybrid and Audi Q7 e-tron) than announced by their makers. A deviation of 300% seems to be ‘standard practice’. RANGE VERSUS WEIGHT How much the actual fuel consumption differs from the NEDC figures depends on the driver profile and how disciplined one is at plugging the car in on every possible occasion. Conceptually speaking, hybrids are not ideal long-distance travellers. They make the most sense when used over distances up to 40 km (i.e. their maximum electric range) and in and around cities, where they can recover the kinetic energy at their wheels whilst braking or coasting by turning it back into electricity and storing it in the battery. Their combustion engine is shut off when no power is needed. On motorways, they constantly require ‘fossil’ power and the FLEET EUROPE #88

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48V: VIRTUAL HYBRIDS FOR EVERYONE, SOON

Toyota Motor Europe sold 295,000 hybrid cars in Europe last year, or almost 1-in-3 of Toyota and Lexus sales in Europe in 2016 was hybrid. Here the Toyota Prius.

batteries can almost never be recharged regeneratively. In other words, they are nothing but heavy luggage. Which brings us to the biggest paradox of hybrids: they need large batteries to drive as much on electricity alone as possible, but bigger batteries mean more weight – which compromises energy efficiency and hence range. A plug-in’s accumulator pack easily weighs 200 kg (that of a fully electric car such as the Tesla Model S puts 530 kg on the scales). For an OEM, choosing the right battery size means finding the best balance between range, weight and cost.

Also, looking at the 2016 sales numbers, European customers have a growing appetite for PHEVs, which are less and less the prerogative of premium carmakers as costs are beginning to come down. Have the students become the master, then? Some pupils seem indeed to have done their homework. Take the Hyundai Ioniq: it unites a multitude of advanced technologies, drives like a conventional car and carries a democratic price tag. It could become one of the first eco cars to go mainstream. Other mass-producing carmakers will surely follow.

With modern cars being equipped with ever more energy consuming components, the time has come to switch from the conventional 12V to a 48V system. The latter also allows engineers to develop new ways of increasing engine efficiency. In practice, you can add a multitude of small and cheap electric motors that each contribute to a lower fuel consumption and make every car a ‘virtual’ (mild) hybrid. Such motors can for instance power an electric turbo, the water pump, or the starter, which can act as a booster during acceleration. Indeed, the combustion engine is far from reaching the end of the street.

STUDENTS OUTDO THEZ MASTER Indeed, the battery still eats the lion’s share of the budget. That is one of the reasons why Toyota/Lexus still believe in the non-plug-in approach, with smaller batteries and a rather uncomplicated planetary gear system. The flipside of this Hybrid Synergy Drive (HSD) concept, which is used by every hybrid Toyota and Lexus on the road today, is a disagreeably howling petrol engine during acceleration. Most competitors use automated dual-clutch transmissions or conventional automatics, which ensure a more natural feeling acceleration and driver involvement, so to speak. FLEET EUROPE #88

The Hyundai IONIQ is the first car to offer hybrid, plug-in hybrid and all-electric powertrains in a single body type.

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FUEL CELL

Building up activation energy Dieter Quartier @DieterQuartier

Any new groundbreaking technology follows the Arrhenius law: you need a certain activation energy before a reaction starts. That is why the EU, five carmakers and tens of partners bundle their forces to get the ‘hydrogenation’ going. Fuel cell vehicles (FCEVs) have a lot going for them. They are basically electric cars with an integrated power plant that runs on pressurised hydrogen. This allows them to drive longer distances (500 km) than plug-in electric vehicles, with no tailpipe emissions but clean water. Refuelling takes just a couple of minutes. As they do not emit any CO2 or harmful gases, FCEVs are granted fiscal benefits.

HYDROGEN DOESN’T COME CHEAP Currently, a kilo of hydrogen costs about 10 EUR and allows you to drive 100 km – hardly more competitive than a comparable diesel or petrol car. There are several ways to produce this renewable fuel, the most eco-friendly one of which is electrolysis of water using wind or solar power. Ideally, the hydrogen is created on site, so that the distribution step can be eliminated, resulting in an optimum well-to-wheel balance.

However, there are a few major drawbacks. As the high R&D costs can only be carried by a few thousand vehicles today, FCEVs are twice as expensive as their conventionally powered peers. Moreover, there are hardly any hydrogen refuelling stations, because there are hardly any FCEVs, and vice versa. Europe has no more than 90 fuelling points, a third of which are located in Germany. EUROPE’S HELPING HAND: HYFIVE AND H2ME To help adopt hydrogen-powered e-mobility as a way to reduce emissions, the European Union, together with 15 partners, created the Hydrogen for Innovative Vehicles (HyFIVE) demonstration project. Five carmakers – BMW, Daimler, Honda, Hyundai and Toyota – deploy 185 fuel-cell vehicles to prospective drivers in Austria, Denmark, Germany, Italy, Sweden and the UK. The project will also create clusters

of refuelling station networks to provide refuelling choice and convenience to early users of FCEVs. Equally pushing hydrogen-based mobility is the H2ME initiative (Hydrogen Mobility Europe), bringing together 37 partners from across Europe. It aims at the deployment and operation of 1,400 fuel cell vehicles and the addition of 29 extra hydrogen-refuelling stations (HRS) to the European network by 2020. It is supported by the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) with funding from the European Union Horizon 2020 programme. And at the latest World Economic Forum in Davos, the CEOs and chairpersons of 13 leading energy, transport and industry companies have formed a 'Hydrogen Council', to promote hydrogen as an important longterm contributor to the energy transition. THE MARKET TODAY The only two vehicles commercially available on the market today are the Hyundai ix35 FCEV and the Toyota Mirai. The Korean carmaker was the world’s first to manufacture hydrogen-fuelled cars in series production. Its ix35 FCEV is available in 13 European countries through 30 dealers and is said to offer everyday usability thanks to its 594 km range and SUV features. Customers have the choice between outright purchase and operating lease. Last summer, the car sharing service BeeZero, a subsidiary of Linde AG, took delivery of over 50 Hyundai ix35 fuel cell cars. The car sharing concept is run on a zone-based model and available in Munich’s city centre in Germany as well FLEET EUROPE #88

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Still this year Mercedes-Benz says to be introducing its own interpretation of the fuel cell. It is the first FCEV that features an additional lithium ion battery which can be charged externally.

as four surrounding neighbourhoods. The cars can be booked online or via a smartphone app. Contrary to the Hyundai ix35 FCEV, the Toyota Mirai is a separate model built to the purpose, allowing for a clever packaging of components (hydrogen tanks, fuel cell, battery, electric engine). In Europe, the number of available Mirais will be limited to 100 for 2017, most of which go to Germany and the UK. They are only available as part of a 5 year/120,000 km operating lease contract.

NISSAN’S BIO-ETHANOL ALTERNATIVE Nissan has developed a new kind of fuel cell technology which would be safer, cheaper and more user-friendly than existing systems. Instead of pressurised hydrogen, the Japanese carmaker’s “e-bio fuel cell” uses bio-ethanol and thereby offers a solution to the

fuelling infrastructure problem. The ethanol is derived from renewable crops such as corn or sugar cane – an industry already largely in place. Nissan aims at commercializing it around 2020.

NEW: MERCEDES GLC F-CELL AND HONDA CLARITY This year, Mercedes will be introducing its own interpretation of the fuel cell, packaged in the popular GLC body. It is the first FCEV that features an additional lithium ion battery which can be charged externally. Indeed, the GLC F-Cell combines the advantages of a fuel cell with those of a plug-in electric vehicle, offering a combined range of 500 km. The compact hydrogen propulsion system fits entirely under the bonnet, while the H2 tanks rest underneath the back seat. Second newcomer in Europe for 2017 is the Honda Clarity, a large futuristic looking saloon seating five adults. Like in the Mercedes, the drive system is entirely housed in the engine compartment, leaving plenty of room on the inside. Honda promises a realistic range of 598 km. For now, the Clarity will only be used as demonstrator vehicle in London and Copenhagen within the HyFIVE project. When and at what price it will be sold to end customers in Europe is still unknown. FLEET EUROPE #88

MICROALGAE COULD BE THE SOLUTION Algae can produce hydrogen by photosynthesis – a process in which sunlight is used as an energy source to achieve a chemical reaction. The Tel Aviv University found a way to eliminate oxygen from the algae’s environment – under these conditions, the algae split water molecules (H2O) into hydrogen ions (H+) and electrons.

The researchers also applied genetic engineering to increase the algae’s hydrogen production by 400%. They reckon that hydrogen could become a sustainable source of energy and that production from algae is more promising than ever.

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CNG

The best short-term long-distance solution Dieter Quartier @DieterQuartier

Natural gas is much cleaner than petrol and diesel, cuts fuel bills by up to 40% and can be produced sustainably. Compared to hybrids, CNG vehicles make more sense as long-distance travellers, too.

3,700

THE NUMBER OF NATURAL GAS REFUELLING STATIONS IN EUROPE

€

5/100KM

THE AVERAGE FUEL COST FOR A MIDSIZED CNG CAR IN EUROPE

Vehicles that run on Compressed Natural Gas (CNG) are basically adapted petrol models. Natural gas essentially consists of methane and is also used for heating and cooking. Unlike LPG vehicles (liquefied petroleum gas), CNG cars are not banned in underground car parks. Another advantage is that many OEMs offer CNG as a factory option. This means that the additional gas tanks are perfectly integrated in the car’s floor, the combustion system has been adapted and the factory warranty is not void. Indeed, it is possible to retrofit most any petrol powered vehicle with a CNG system, for prices ranging from €3,000 to 5,000. That is more than the supplement you pay for an OEM CNG model over the petrol model it is derived from. Also, retrofitting means sacrificing many litres of boot space (the gas tanks have no other place to go) and – inevitably – the manufacturer’s written word that all technical failures are covered during the Europe-imposed 24-month period following the first registration. TIMID POPULARITY If natural has so many advantages, then why is it not more popular? First of all, there is a lack of awareness. Not many fleetowners investigate the possible benefits of CNG in terms of TCO arising from lower CO2 emissions and cost of fuel, probably because the industry today is obsessed with (plug-in) hybrids. Indeed, battery-aided petrol models offer greater tax advantages and promise tantalising fuel efficiency, but they carry a much heftier price tag. Moreover, plug-ins consume up to 400% more than what they claim on paper, as practice learns – certainly when

used for long-distance travel. That seems not to be the case with CNG: according to an ADAC test from July 2014, the real driving emissions (RDE) of natural gas vehicles deviate just 8.7% from the factory figures. Safety is no issue. CNG vehicles are subject to stringent tests, including crash simulations, so that they resist impacts and fire at least as well as a conventional car. Refuelling is entirely safe, too, thanks to a nozzle that clicks onto the receptacle on the vehicle and an automatic shut off. GROWING INFRASTRUCTURE There is no denying that the CNG network is still not dense enough. Of the roughly 3,700 stations in Europe, a third are situated in Italy and another third in Germany. Other gas-minded countries are Sweden, Switzerland and Austria. The rest of the European states are slowly catching up, aided by local governments, the National & bio Gas Vehicle Association (NGVA), and the EU. Natural gas vehicles are key to reach the agreed 30% CO2 reduction target by 2030. That is why the European Union is investing € 160 million in the development of CNG stations, so that they will be located at a maximum distance of 150 km all over Europe by 31 December 2020. Incidentally, CNG vehicles can switch to petrol when their natural gas tanks are empty, extending the range with a few hundred kilometres. Also, it is possible to have a natural gas station installed on the company’s premises. Nonetheless, these ‘domestic’ filling stations work at lower pressure and hence much more slowly than commercial ones. FLEET EUROPE #88

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A much anticipated newcomer is the Audi A4 Avant g-tron, which can travel up to 500 km on CNG plus another 450 km on petrol.

SLOWLY INCREASING MODEL OFFER It is clear to see that there are believers and non-believers in the automotive industry. Daimler (Mercedes), FCA (Fiat, Lancia), Opel, Volkswagen Group (Audi, SEAT, Skoda, VW) and Volvo are leading the way, offering in total 31 passenger car and 14 LCV models powered by natural gas. A much anticipated newcomer is the Audi A4 Avant g-tron. It uses a 170 hp 2.0 TFSI engine with an innovative combustion technology to lower the NEDC fuel consumption to 4 kg/100 km, which corresponds to 100 g CO2 per km – roughly 5 g less than the equivalent 2.0 TDI engine and even 28 g less than the 150 hp 1.4 TFSI. The premium D-segment estate car can travel up to 500 km on CNG plus another 450 km on petrol.

Natural gas is extracted from underground gas fields, located at various depths. It can be mixed with biomethane and Power to Gas, further enhancing its sustainability credentials. Biomethane is basically refined biogas produced by the natural breakdown of organic material in waste from agriculture, sewage or food. It has the same composition as natural gas and can be injected into the natural gas distribution grid, or used directly by CNG vehicles. The same goes for Power to Gas - the name given to synthetic natural gas produced with surplus energy from wind farms or solar panels through a chemical process, making it carbon neutral.

HYDROGEN OR CNG AT WILL Audi operates its very own “e-gas” plant in Wertle, Germany. It uses renewable power to break water down into oxygen and hydrogen. The hydrogen can be used to power fuel-cell vehicles, but as the demand today is still low, it is reacted with CO2 to produce synthetic methane, or Audi e-gas. Chemically, it is nearly identical to fossilbased natural gas, so it can be distributed throughout Germany over the natural gas grid to CNG filling stations.

Equally interesting is the revamped Opel Zafira CNG. The 150 hp 1.6 Turbo engine of this seven-seater MPV gives you 530 km of natural gas range, to which you can add 150 km if you switch to the 14-litre petrol tank (NEDC). Its CO2 emissions amount to 129 g/km. By way of comparison: the 134 hp 1.6 CDTi (diesel) emits 119 g/km, the 140 hp 1.4 Turbo (petrol) 148 g/km. SUSTAINABLE SOURCING Natural gas is found in large amounts in nature: the global reserves of natural gas considerably exceed those of oil (>200 years). New discoveries are made regularly. FLEET EUROPE #88

The revamped Opel Zafira CNG. This 7-seater MPV has a range of 530 km of natural gas, to which you can add 150 km on petrol.

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Close the loop, store the excess Dieter Quartier @ DieterQuartier

Solar panels have found their way to the rooftop of many a company, but would it not make sense to store the excess energy in a large battery instead of selling it back to the grid?

Solar panels are no longer the privilege of large corporations conscious about their environmental impact (and energy bill). SMEs, too, are increasingly aware of the advantages of producing their own electricity. Becoming carbon neutral and saving money in a relatively short time span, for instance. Or protecting themselves against price volatility and inflation of energy prices, and becoming self-sufficient, for that matter. The ROI of photovoltaic panels is generally quite convincing: on average, businesses pay off their solar panel systems in 3 to 7 years, while they enjoy free electricity for the life of the system, i.e. 25 to 35 years.

TESLA POWERPACK: THE B2B SOLUTION After having paved the way in electric mobility, the Californiabased automotive disrupter is now pioneering the market of self-storage. Nearly two years ago it introduced the B2C product Powerwall, followed last

year by the B2B solution Powerpack. According to Tesla, you can increase the capacity indefinitely, making this solution attractive for large companies and utilities alike. Amazon, for instance, is already using this solution.

In some cases, ‘solar owners’ receive payment from their utility for the solar electricity that their system generates. In this respect, it might even be financially interesting to install more solar power than you use. But what is the case today, can be different tomorrow. When the grid is not in need of extra power, the utility will probably not pay for the excess electricity generated by a company. So how about taking it to the next level, combining self-creation with self-storage and closing the loop? VEHICLE BATTERY OR EXTERNAL ACCUMULATOR The idea of using batteries for the storage of excess electricity so that it can be used later is not new, but still it is not put into practice – or at least not on a large scale. The financial picture simply wasn’t convincing enough. However, things are starting to get moving as electric vehicle producers see an interesting business case emerging and prices are coming down. There are basically two options: you can either use the battery of an electric vehicle while it is not on the road, or you can install a separate accumulator (‘home storage’). The first option is not the most convenient one: you can only use the car as an energy buffer when it is parked, i.e. not 24/7. Solar energy is created during the day – typically the time when cars are moving, evidently. Also, an electric vehicle’s battery is not built to act as an accumulator that charges and discharges all the time. The additional wear and tear and degradation on the battery in a vehicle-to-grid set up (V2G) has a relatively high cost.

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Far more viable is the second solution. There are different propositions on the market – all of which have their pros and cons. RECYCLED EV OR PROPRIETARY BATTERIES Perhaps the most logical idea would be to recycle a used EV battery. Nissan, for instance, launched a new ‘home energy’ storage product in 2016 created from used Leaf batteries, called xStorage. At €4,000 including installation for 4.2 kWh, this system looks affordable at first glance, but critics refute that this is a cost-effective proposition because it is made of recycled batteries and as a consequence offers limited efficiency and a short lifespan. Daimler (Deutsche Accumotive) and Tesla build and sell ‘brand new’ accumulators specially developed for home storage. Both OEMs have recently constructed large battery production sites to satisfy both the need for vehicle drive batteries and home storage systems, and taking advantage of economies of scale. Tesla’s sleek Powerwall with integrated inverter has a capacity of 14 kWh and costs more or less €7,000 including installation. Apart from this B2C solution, Tesla also offers a (more powerful) B2B system called Powerpack. Deutsche Accumotive sells compact modular units of 2.5 kWh each, which can be combined to clusters. BMW takes a different approach: you can either buy a recycled i3 accumulator as a home battery, or put a brand new one against the wall. Strangely enough, the otherwise design conscious carmaker doesn’t bother wrapping it in an elegant package. CONNECTED TO THE GRID OR NOT Apart from using such a battery to store excess electricity produced by your solar panels for later use, it is also possible to connect this battery to the grid, so that it can be used by the utility as a buffer for renewable (wind or solar) and/or cheap (night-time) energy. Which only seems a logical thing to do. Things get a bit more complicated when you are sending electricity back to the grid, however. First of all, certification and FLEET EUROPE #88

Home storage could make economic sense when batteries are used to store excess electricity and then use it for your own purpose.

LITHIUM: A PRECIOUS RESOURCE Most batteries today are made of lithium ions. They offer a higher energy density than lead-acid batteries and hence save weight, while their memory effect is limited and they hardly self-discharge. The lion’s share of lithium is being mined in Argentina, Bolivia and Chile. Automotive batteries for hybrid or electric vehicles represent a quarter of the global demand for lithium, but this will increase to 40% by 2020. To secure lithium resources, inter-governmental as well as OEM–governmental partnerships are being established.

regulation come into play. Secondly, there is no infrastructure standardisation today. Finally, in most cases the utility will pay less for your ‘home-brew’ electricity then what they charge when you have to buy it from them. In conclusion, experts believe that home storage makes economic sense as far as batteries are used to store excess electricity and then use it for your own purpose, not to sell the electricity back to the grid. Or at least not in the near term.

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Better infrastructure to help EVs remarketing Frank Jacobs @FrankJacobs

In the UK, a fairly exemplary market within Europe when it comes to the integration of EVs and other alt-fuel vehicles, the one-year depreciation deflation over a one-year period of a representative sample of fossil-fuel vehicles amounted to 3% to 5% in 2016. For electric vehicles, the annual depreciation deflation ran up to 10%-11%.

By all accounts, 2016 was a good year for Residual Values. But not for the RVs of electric cars and other alternativefuel vehicles. “They depreciated a lot more than fossil-fuel car RVs”, experts agree. The solution? Surprisingly: “More and better infrastructure”.

VICIOUS CYCLE Used electric vehicles are trapped by the curse of rapid progress, says Derren Martin, International Senior Car Editor at cap hpi: “The problem with electric vehicles is: they are a good proposition from new: driving ranges on the latest models have improved greatly. Pre-existing EVs have much smaller ranges. Which means that range anxiety for older models will always be greater than for newer models”. “At some point in the future, range anxiety for electric vehicles will completely disappear. But until then, used EVs will be locked in a vicious cycle, forever comparing unfavourably to new EVs”. ABSENT INCENTIVES But there are other elements that disfavour the resale of electric cars. For one, the fact that manufacturers in general do not have any system in place to assist with the remarketing of their used electric cars. Secondly, the lack of any government incentive specifically aimed at remarketing electric vehicles – an absence of policy especially glaring if one considers the many measures, fiscal and otherwise, at improving sales figures for new EVs.

HORROR STORIES However, perhaps the most crucial piece of the puzzle has little to do with residual values. Says Derren Martin: “We keep hearing horror stories of clients with electric cars going from charging point to charging point – and finding one after the other not in working order. That is of course a major problem, and moreover: that is not a problem you are ever likely to have with diesel or petrol cars. Admittedly, the problem is anecdotal. But these anecdotes resonate”. Consequently, upgrading the charging infrastructure – and maintaining it in good working order – is going to be a crucial element in driving up electric-vehicle RVs, Derren Martin thinks. The residual values of alternative motorisations clearly still have a way to go before they are on an equal footing with fossil-fuel RVs. But are all alternative motorisations struggling equally? SMALL PROPOSITION Pure electric used cars still depend in large part on a following to gain market share. “That will change when the EVs that have a range of 400 to 500 km will come on to the used-car market”. As soon as range anxiety falls away, expect EV RVs to improve dramatically. But we are not there yet. For now, despite all the talk about the electric future of mobility, electric cars remain a fairly small proposition in the market – new and used. For now, hybrid RVs are a better proposition. In fact, you would think that – combining fossil-fuel engines with electric

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motors – their RVs would be better than both the fossil-fuel and EV alternatives. “But in actual fact, we see that hybrid EVs are struggling as well in the used-car market. Even hallmark models such as the previous model of the Prius – although the latest model has performed better, based very much on low volumes in the used market thus far”. NOT COMMERCIALLY VIABLE Some analysts insist the future of mobility will not be electric-only, but consist of smorgasbord of motorisation options – still including fossil fuels in some vestigial form, but also embracing other options such as biofuel, CNG and hydrogen. Such vehicles are already on the roads, albeit in very small numbers. Are they an interesting proposition from a remarketing point of view? “While it is certainly true that technologies like hydrogen might be very acceptable options for future mobility, the reality today is that the volume of hydrogen-powered vehicles currently on the road is so small that remarketing them is not a commercially viable proposition. The same goes for all other smaller alt-fuel options”.

LACK OF INFRASTRUCTURE The irony of options like hydrogen is that, although theoretically very suitable solutions, they suffer from the problem that electric cars are only just beginning to overcome: the lack of charging infrastructure. “If I wanted to buy a used electric vehicle, I would want a lot more charging points, with a network that is both more extensive and intensive. Plus, of course, those charging points should effectively be working”, says Derren Martin. “More and better infrastructure would give electric mobility a boost. A lot of work remains to be done in this respect”. Of course, experts would not be experts if they all agreed with each other. Dr. Christof Engelskirchen from Autovista Intelligence, part of EurotaxGlass’s Group, thinks valuations for alternative-fuel vehicles currently look set to increase at a faster rate than the overall market, “particularly in France and Spain, where growth of 2% to 4% is anticipated each year between now and 2019. The volumes of alternative-fuel vehicles making it on to the used-car market is limited, and that is bolstering valuations”.

One of the main issues with regard to seamless and price-attractive electric vehicle remarketing is the fact that too much car manufacturers still not have adequate systems in place to support with the remarketing of their used electric cars.

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Analyse, act and be positive for Green Tim Harrup

The days when putting a token electric car in the car park and making a public fuss about the Managing Director opting for a 2.5 litre car instead of his usual 3.0 litre, are long gone. This was ‘greenwash’, but companies now are genuinely going green, for environmental, cost and image reasons. With success.

1. ROYAL DSM

Daan Bielefeld

Global Mobility Manager ROYAL DSM (CORPORATE PEOPLE AND ORGANIZATION) 1,750 vehicles

Royal DSM was crowned winner of the 2016 Smart Mobility Management Award for the successful combination of environmental friendly employee mobility initiative with employee satisfaction and cost efficiency. In terms of green fleet initaitives Royal DSM looked not only at reducing CO2 emissions, but at the less often quoted but equally noxious Nox too. It started a pilot with ‘green private lease scheme’ with oil additive. Early results showed a substantial (>15%) reduction of Nox emissions. The pilot is now extended to the company car fleet to see what the results are over the long term (9 months). A greener car fleet will have impact on sustainability, visibility, (perceived) benefit value, costs or even value creation. Where alternative powertrains are concerned, Royal DSM allows, and stimulates employees to choose, EVs and hybrid cars, both in the company car policy and in private (leasing) schemes. Services such

as help in the decision-making process are offered, and Royal DSM optimises the use of electric or hybrid cars via car sharing initiatives. Hybrid cars have maximum fuel budgets, to ensure electric ‘refuelling’. Within the company car area the company observes that the current driving range is still a challenge. RESULTS AND FUTURE ACTION Royal DSM has arrived at a point where 10% of its fleet is now electric/hybrid. The electric car sharing pool is well received by employees and a good alternative to rental cars or private car use, both in terms sustainability and costs. In the private area, Royal DSM is seeing that the cost level of an EV can still be a roadblock. However, employees are willing to make the change and it continually shares opportunities and/or roadblocks to accelerate a smooth transition towards green mobility. And finally, Royal DSM is implementing a global sustainability policy for company cars.

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Four finalists of the 2016 Fleet Europe Awards demonstrate that today’s car fleet programme should include ‘green fleet’ initiatives to be efficient, cost-effective and stakeholder-friendly.

2. BRISTOL-MYERS SQUIBB Bristol-Meyers Squibb (BMS) states that the strategy is to provide the cars with the lowest CO2 emissions for sales forces. It also proposes, where alternative powertrains are concerned, hybrid and electric vehicles. The BMS car policy includes, as an example, hybrid models for all levels of drivers based in the company’s headquarters in Rueil Malmaison near Paris. This takes into account the restrictions on driving which are imposed by the Paris authorities during periods of the highest levels of pollution. Members of the company’s management have made it a challenge to propose hybrid and electric cars. BMS is also very clear, in setting its policy, that there is a Corporate Social Responsibility element which means that

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senior management has to be fully behind the policy. RESULTS AND FUTURE ACTION BMS is going to continue to propose mobility solutions and not only have low emissions cars in the car Policy. There will be a new offering for employees who do not need a large company car with mobility solutions tailored to their needs including a car sharing program. Members of the management lead by example, opting for alternative powertrains. Importantly, drivers who choose these models are really enthusiastic about having cars with such low CO2 emission. BMS has achieved substantial reductions in both fuel consumption and, as a direct result, CO2 emissions.

Xavier Bazan

Car Fleet Manager, France, Benelux BRISTOL-MYERS SQUIBB (HEALTH AND PHARMA LAB) 2,500 vehicles

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3. CHIESI FARMACEUTICI

Carlo Bertolini

Company Services & Security Head CHIESI FARMACEUTICI (PHARMA) 1,600 vehicles

TOP GREEN FLEET TIPS

Along with a desire for environmental friendliness, one of the reasons why the Italian-based pharma company, Chiesi Farmaceutici, is enthusiastic about a greener fleet is a factor which cannot be underestimated: image. Having the Chiesi logo on the side of alternative powertrain vehicles makes Chiesi Farmaceutici employees very proud to use them in the city, where people are attracted by and curious to see, this strange car. Passers-by therefore immediately connect the name of the company with the electric concept, strengthening even more the positive imagine of the company and its commitment to the climate. The use of alternative powertrains is not necessarily limited to EVs though. The company continually considers other alternative fuels such as methane but the solution is not perfect and Chiesi Farmaceutici believes it could have problems in refuelling.

RESULTS AND FUTURE ACTION There are now 6 hybrid cars and 3 electric vehicles in the Chiesi Farmaceutici company car fleet. Renting electric cars is not the cheapest solution, and buying hybrid cars is more expensive than other possibilities. But a constant CO2 reduction brings some obvious savings. The results are some decreased spending in terms of fuel and some CO2 saved. And while people are happy to see hybrid cars in the fleet without showing any particular reaction, there is great enthusiasm around the EV. The company calculates the effect of reducing CO2 during a complete lifecycle. It was used by the countries for calculating the realistic average in the next four years and the possible costs savings, using a system of a constant fuel price. And, of course, Chiesi Farmceutici will continue to go ahead with its programme, constantly reducing CO2 and seizing every opportunity.

• Understand your company’s vision and relate your goal to it. • If you have a plan and roadmap, start to spread the word and create appetite for your plan. • Stay positive and be creative: If you do not believe in your plan, nobody else will. • Focus on driver’s needs and not only on reducing CO2 emissions on the cars proposed. • Dedicate effort for convincing managers to reduce engines and fuel consumption. • Fixing steps and a precise vision of the possible future results can help in presenting a multiyear project to the company. • Bear in mind that in the centres of many capitals/big cities, very soon cars with diesel or petrol engines may be forbidden.

KEY FACTS AND FIGURES Royal DSM A number of target CO2 levels are common within fleets, depending on car grades. Royal DSM is discussing targets within the global car policy for both the overall figure, and for the top level. It also has a policy which will see average CO2 levels decline between now and 2020. Bristol-Meyers Squibb BMS measures the fuel bought for the entire fleet, the number of kilometres driven, average CO2 emissions and total CO2 emissions There has been a decrease from 4,400 tonnes in 2009 to 2,400 tonnes in 2015, and a 20% drop of average CO2 emissions per car.

AbbVie AbbVie has average CO2 emissions in its EMEA fleet of 118 g/km in 2016, and has a very clear objective of reducing this to below 115 grams by 2018. The company has already achieved a reduction of around 8% between 2014 and 2015 alone. Chiesi Farmaceutici Chiesi Farmaceutici has been reducing CO2 emissions since 2010, buying ecological cars and divesting itself of the worst ones. The company avoids putting cars with high level of pollution on the list for employees. The European average target is 114 g/km of CO2 emissions in 2019 but Carlo Bertolini is confident it will do much better.

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4. ABBVIE The AbbVie approach is comprehensive. In all EMEA countries it has implemented a CO2 cap for the five of the car categories within its policy. There is no exception – all cars needs to be ordered in line with the agreed CO2 emission level. And in some countries the company has implemented an EV and hybrid option for employees. Aside from vehicle selection, several of the larger European countries provide Eco-Driving training either as a stand-alone training class or as part of the overall Behindthe-Wheel driver training curriculum. Additionally, many countries provide on-line eco-driving solutions. Looking at alternative powertrains in more detail, AbbVie is in discussion with its leasing partners about the implementation hybrid cars and electric vehicles in countries where, from a legal and taxation

perspective, it is a better option to provide this type of vehicle. RESULTS AND FUTURE ACTION In the current fleet AbbVie has hybrid vehicles in France – for those employees whose yearly mileage is less than 15,000 km – and in electrically-enthusiastic Norway where it has implemented plug-in hybrids and EV models. Currently, with one of the OEM suppliers, AbbVie is working on an electric vehicles project. And the company says that 2017 will be very crucial – it is going to optimize the fleet to some degree – one of the topics will be an alternative powertrain. In the first quarter of 2017 the company is going to start the pilot program with electric vehicles in the Netherlands. Through the creation of the Car Fleet Strategy it is showing its commitment to reducing CO2 emissions by 20% by 2020.

Wojciech Regucki EMEA Fleet Manager

ABBVIE (BIOPHARMA) 3,890 vehicles

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Solving the green tyre dilemma Dieter Quartier @DieterQuartier

What makes a green tyre green? Why do electric cars usually ride on narrow, tall footwear? It’s all about fighting the devil called resistance.

Tyres are a variable that is hard to budget. Their actual cost as part of the TCO story depends on so many factors, stretching far beyond their mere purchase price. Apart from the direct costs – procurement, fitting, storage, maintenance, recycling, wear, et cetera – tyres have a substantial but less measurable influence on comfort and safety. The latter can be seen as ‘indirect costs’. The more impact-absorbing and quiet a tyre, the more driving comfort it yields, resulting in less driver fatigue. This also has an impact on safety – as do tread wear, tyre pressure and season-adapted rubber compounds and tread type. Inappropriate, worn down or deflated tyres can lead

to accidents, costing companies huge amounts of money. And then there’s fuel consumption. This evidently depends on how the vehicle is being driven, on vehicle weight and on engine technology, but tyres play no small part either. They account for up to 20% of a vehicle’s thirst for fuel. That is why carmakers not only turn to lightweighting and powertrain optimisation, but also to low rolling resistance footwear. ROLLING AGAINST RESISTANCE The European tyre label provides information on three characteristics: fuel efficiency, noise and wet grip. Regarding the first aspect, the difference between

THE BENEFITS OF CHOOSING ECOPIA TYRES

Improve fuel efficiency by up to 5.7%*

Eco-friendly, fuel saving tyres for today

Maintain Bridgestone’s safety standards

Reduce CO2 emissions by up to 5.8%*

A low rolling resistance tyre is a hard tyre, which flexes less and hence loses less energy. The flipside is that less deformation often goes together with less road grip.

* With Ecopia EP100. Fuel efficiency and CO2 emissions varies for other models.

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an A rating and a G rating represents a possible reduction in fuel consumption of 7.5%. Based on an average consumption of 6 litres/100 km, you could save 157,5 litres of fuel per 35,000 km – the average lifecycle of a tyre. First remark: it is very unlikely that corporate vehicles will ever be equipped with G-rated tyres. Companies demand A-, B- or C-rated tyres, meaning that the maximum fuel saving potential would be 50 litres or so. Second remark: it is virtually impossible for a tyre manufacturer to build a tyre that is both good at saving fuel and secure maximum grip. Most tyres are therefore a compromise. GRIP VERSUS EFFICIENCY Which brings us to the main challenge manufacturers of green tyres are faced with: if fuel efficiency is the top priority, they need to find solutions to compensate for the compromised grip. Saving fuel means making a tyre require less energy to roll. The so-called rolling resistance mainly depends on losses caused by road surface friction and hysteresis – the fact that a deformable material loses more energy while flexing (under the influence of weight) than it recovers while regaining its original shape.

TALL & NARROW: MORE THAN AESTHETICS Why do electric vehicles use tyres with an extremely large diameter (up to 22 inches) and a narrow tread (155 to 175 mm)? Because less tread surface means less resistance and because a narrower tyre causes less aerodynamic drag. Also, a large diameter combined with a narrow tread makes for a rigid tyre that flexes less and therefore conserves energy. Moreover, narrow tyres make less noise – an important characteristic for EVs. Given Europe’s CO2 objectives, will all cars be evolving towards taller and narrower footwear? If the tyre manufacturers can come up with a solution to compensate for the compromised grip, the answer is probably yes.

UP TO

20 %

THE INFLUENCE TYRES CAN HAVE ON FUEL CONSUMPTION

7.5 % THE DIFFERENCE IN FUEL EFFICIENCY BETWEEN AN A-RATED AND A G-RATED TYRE

RENAULT SCÉNIC: RIDING HIGH Renault is the first carmaker to introduce ‘tall & narrow’ tyres in its conventional vehicle line-up. All versions of the new Scénic and Grand Scénic ride on 20 inch tyres with a tread width of just 195 mm, combined with a relative tyre wall height of 55, i.e. 107 mm – which is more than most 17 or 18 inch tyres. This results in a good

balance between comfort and performance, while the narrow tread results in less aerodynamic and rolling resistance. In spite of their large diameter, they are not more expensive than a 17-inch tyre. Last but not least, the tall sidewalls lessen the risk of rim damage.

Indeed, it is a matter of energy loss caused by deformation. A low rolling resistance tyre (LRR) is therefore basically a hard tyre, which flexes less and hence loses less energy. The flipside of this, is that less deformation means that the tyre doesn’t stick to the road or absorb irregularities as much as a standard tyre. Or does it? Thanks to silica-based compounds, tyre manufacturers were able to solve the dilemma. They offer both low rolling resistance at low deformation frequencies (when the tyre is rolling on a flat surface at low to medium speeds) and high grip at high deformation frequencies (when rolling on an irregular surface, or a flat surface at high speeds).

FLEET EUROPE #88

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SMART MOBILITY

To become THE mobility provider Steven Schoefs @StevenSchoefs

“ALD Automotive wants to be the most innovative mobility provider around, with a focus on outstanding customer experience.” John Saffrett, Chief Administration Officer at ALD International, could not have been clearer about the company’s farreaching ambitions.

John Saffrett, Chief Administration Officer at ALD International, has the responsibility to facilitate new ideas and disruptive intitiatives in the field of fleet, mobility and connectivity.

ALD Automotive manages almost 1.4 million vehicles in 41 countries around the world. And yes, long-term leasing is still a growing business, but company understands that changing technological, demographic and behavioural trends are shifting the focus on providing mobility services, in parallel with the change from a car-centric to user-centric approach. In the Mobility Experience Centre at ALD Netherlands, there is a virtual and digital mobility strategy lab, where top management and key stakeholders, based on their corporate missions and fleet and mobility parameters, get help in matching their mobility strategy with their overall corporate strategy. INNOVATION LAB AND DISRUPTIVE SERVICES To develop and streamline its mobility initiatives, ALD Automotive has promoted a new corporate culture, centred around an Innovation Lab in which mobility initiatives can be launched and discussed across countries, divisions and employees. Some of the mobility initiatives are still in the developing phase, but many have already been piloted or are ready to be rolled out. The Telematics solution has gone live in the UK, with a rollout in the rest of Europe this year. The driver app My ALD, with fleet management functions, is available in more than 20 markets to reach all group entities beginning 2017. And Italy has the lead on the corporate car-sharing programme, like they had with the flexible private lease product RicariCar, where added-value services can be offered in one and the same package, for example concert

tickets or services for a city trip. There will also be a RicariCar Zero, where no mileage will be defined upfront, with the customer paying per use and mileage driven. ALD Automotive’s Innovation Lab is working on Artificial Intelligence conversation in reporting, aiming to make the user experience as convenient as possible by including networks like Facebook, WhatsApp and others in the ALD mobility configuration. The final three disruptive services are already live in the Netherlands. They are Own My Car, in which the company will involve the driver and his social network in the re-sale of the car after the contract is finished; ALD free, allowing the employee to budget his own mobility mix using a variety of mobility modes; and ALD choice, a formula whereby the customer doesn’t select the brands and models himself, but makes the choice based on a car portfolio that ALD Automotive assembled by ALD analytics. Within ALD choice, a mix of new and used vehicles is possible, as customers can already pick vehicles for a period of 3 months. MILLION-DOLLAR QUESTION “We realise that many of these mobility initiatives will not be generating a return in the short term, but that is not the goal,” says John Saffrett. “How long exactly this will take to mature, we don’t know, but certainly 3 to 5 years.” That same time frame was mentioned by John Saffrett when asked when users could expect to use one and the same app to manage, invoice and report all fleet, mobility and travel services. FLEET EUROPE #88

SMART MOBILITY

Carpooling, a logical solution for companies Steven Schoefs @StevenSchoefs

How does BlaBlaCar work?

BlaBlaCar connects drivers who have empty seats in their cars with passengers who would like to share them. The focus is on longer distance carpooling with an average journey distance around 300 km. “Today BlaBlaCar transports more than 12 million people each quarter and our member base is constantly growing”, says Alec Dent, Business Development Manager.

ALEC DENT A couple of days before a journey, a driver will offer a ride via our app or website. We will suggest a price per passenger, although the driver can increase or decrease this if he wants to. A passenger then looks on the app or website and finds the ride he’s looking for. Payment is on-line, and we take a small commission from the passenger, not the driver.

Are drivers screened? A.D. Drivers create a profile with a picture and an identity check with valid ID that passengers can see. There are also ratings from other passengers. We investigate bad ratings and make decisions accordingly. We will probably insist on more and more information as time goes on, to strengthen the trust in all profiles.

You are positioned differently from Uber? A.D. Yes, we don’t provide professional drivers who will go where the passenger wants to go, we are putting people together who want to go to the same place.

A.D. They are complementary. Our model takes account of the fact that there are so many empty seats in people’s cars. The average car occupancy in Europe is around 1.6 – within BlaBlaCar it is 2.6. Car-sharing reduces the number of cars on the streets – a different issue.

Do you have partnerships to establish an integrated mobility approach? A.D. We have had talks with car rental companies, but we do not provide services which are largely intra-urban. However, we offer one-way journeys, which other car transport services don’t. We are very B2C, but we would like to go towards B2B as well, helping company drivers and fleet-owners to save money. It’s a huge opportunity for us. Think of all the driving done by travelling salesmen for example. But we’re not there yet. We realise that the corporate market has to be addressed differently, have other expectations and requirements. But we are eager to enter the fleet market.

How large is the potential market? A.D. There is not an absolute answer. We have in excess of 10 million members in France, which is around 20% of the entire population… This is our biggest market and is still growing fast. Also, over the past 4 or 5 years we have more or less doubled our business annually. We are world leader in this domain, and we have over 90% of the ride-share market in all the countries we operate in within Europe. Our competition, therefore, is really from other transport providers rather than from other companies doing what we are doing.

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Why do you think your service is better than car-sharing, where I can book a car and have it all to myself?

Alec Dent, Business Development Manager BlaBlaCar: “Today we are B2C, but we would like to enter the corporate market as well.”

INNOVATION

Through the barricades, running the gauntlet Dieter Quartier @DieterQuartier

Volkswagen and Mercedes announced new car-centric mobility concepts last year, recognizing the disruptive change that is coming by embracing it. Let’s take a look at the i.d. behind EQ.

VOLKSWAGEN I.D.: PACKAGE DELIVERY According to Volkswagen, it will be possible to have a package delivered to the boot of your I.D. When away from the car, you can grant temporary access to UPS or DHL to insert a package, after which the car is locked again. With people increasingly buying things on the internet, this seems a sound idea – although not an original one: Volvo launched InCar Delivery last year.

Imagine: within 5 to 8 years, when you need a car, you take your smartphone and order a driverless, electric vehicle of your choosing to come and pick you up. After it has taken you where you need to be, it is available for other users. Gone are the days of owning a vehicle. There are fewer cars on the road and resources are being used much more efficiently. Electric mobility, connectivity, autonomous driving and car sharing: that is indeed the vision carried out by the world’s largest automotive group (Volkswagen) and the world’s largest premium carmaker (Mercedes-Benz Cars), which both revealed a new sub-brand during last year’s Paris Motor Show. A revolutionary idea? Not really – Tesla Motors has been heralding a similar strategy for years. The interesting fact, however, is that two large traditional OEMs now seem to recognise that Tesla was right all along. But rather than join forces, each carmaker apparently prefers to run the race solo. Who will grab the biggest piece of this metamorphic market? Presumably the carmaker who is able to invest the most. Daimler undoubtedly has the biggest wallet – and the engineering force to deliver on its promise. THE VEHICLES The first vehicle spawned by Mercedes new EQ sub-brand is a GLC-like SUV, which according to its maker should by

market ready by 2019, followed by one additional model per year. In the meantime, Daimler has many hurdles to take to put EQ on the map – developing apps, connectivity and interface. The EQ user experience will be entirely different from what we know today, but the vehicle itself is perceived as a natural extension of Mercedes-Benz electrification strategy. The first EQ model will offer a range of 500 km and up to 300 kW of power coming from batteries produced by Daimler subsidiary Deutsche Accumotive. The first Volkswagen I.D. model, of which the brand showed a preview in the shape of the I.D. Concept, is a modest, but nonetheless eye-catching Golf-sized hatchback. Thanks to its Open Space architecture, it should be as roomy as a Passat. In autonomous mode, the steering wheel allegedly disappears. It should go into production in 2020 and offer up to 600 km of e-autonomy. Volkswagen says it will be building the lithium ion batteries itself and offer them with different capacities – just like Tesla does. At the 2017 Detroit motor show (NAIAS), Volkswagen added a minibus to the I.D. Concept line-up that should be seen as an electric, autonomous, connected and shared reincarnation of the iconic T1, the first generation Transporter). FLEET EUROPE #88

INNOVATION

THE BIG IDEA Mercedes-Benz is talking about a brand new ecosystem of products and services– a holistic integration of all hardware and software components, of car and smartphone, of owning and sharing and of driving and being driven. Contrary to BMW’s ‘i’ sub-brand, EQ will be much more than just a handful of maverick models and domestic charge stations. The Swabian brand announced it will launch 10 all-electric vehicles by 2025. By that time, it reckons customer demand will have increased substantially and infrastructure will be developed enough. But will people be willing to share their cars – and under which terms? In this respect, the brand will surely be drawing on its experience with car2go – the car-sharing platform owned by Daimler.

Volkswagen’s vision with I.D. has the merit of bringing connected e-mobility to the people.

Instead of the sharing aspect, Volkswagen seems to focus more on the self-driving features of its I.D. concept, which it wants to have ready by 2025 – five years after the market introduction of the car. An example of this technology is the capability of the car to find a parking spot and park itself after having dropped off its owner. The second pillar Volkswagen is drawing the attention to, is connectivity. Linking the car to your home so you can check on your family, for instance, or videoconferencing with colleagues for that matter, are made possible. Another interesting feature is the fact that your smartphone functions as your car key. In short, Volkswagen’s approach appears much more product-centric than serviceoriented, highlighting the ease of use, the revolutionary design and architecture, plus the fact that it brings electric mobility within reach of many. FLEET CREDENTIALS Which concept holds the most potential for fleets? By the looks of it, Mercedes-Benz seems closer to launch and takes a more holistic approach, as EQ truly embraces car sharing – the only viable cost-saving and congestion-solving way forward. Volkswagen’s vision has the merit of bringing connected e-mobility to the people – potentially revolutionising the car industry as much as the Beetle did. FLEET EUROPE #88

Mercedes EQ truly embraces car sharing, the only viable cost-saving and congestion-solving way forward.

THE EQ PORTFOLIO EQ will encompass all future batteryelectric cars from Mercedes as well as the associated products and services. The carmaker already offers a fastcharging station for domestic use, the free app “Charge&Pay” for convenient recharging at public charging stations as well as stationary energy storage units for power generated by photovoltaic systems. All these products and services will in the future be bundled under EQ.

BUSINESS

Three times Mobility rewarded Tim Harrup

The Fleet Europe Industry Award recognises that the industry is fast-moving, and constantly demanding new services. Last year in November, three top-class companies and added value fleet services made it to the podium. We take a look at what they mean in terms of fleet trends.

XXIMO: Easy to use mobility

Patrick Bunnik, CEO of XXImo and winner of the 2016 Fleet Europe Industry Award.

The winner of the 2016 Fleet Europe Industry Award was XXImo, a Dutch-based company with a Mobility Card designed to support multimodal traveling and at the same time anticipate the full digitalization of payments, invoicing and cost allocation. This is completed by a CO2 tracker for each travel movement to provide insight into the environmental effects. The company says that its mobility platform is unique due to its ability to tailor the solution exactly to specific individual and personal needs while making use of the Visa open loop payment network. XXImo transactions are approved based on the services bought, at what time and where, and not only by monetary value as with traditional open loop cards. The success of XXImo is demonstrated by the fact that in 2015, just 3 years after it began operations, it attracted business and other services specialist Sodexo to be its major shareholder.

SIMPLICITY To simplify the lives of the fleet and travel managers of a company, booking, payment and cost allocation are integrated into one online tool, including a VAT reclaim service. This translates as one contract-one invoice instead of multiple suppliers. XXImo explains that this is a true benefit because the card is used for a broad perspective of different services, which create a lot of different invoicing transactions. Previously, these would be individual paper invoices, but the Mobility Card replaces this â&#x20AC;&#x201C; and all the costly manual work which goes with it â&#x20AC;&#x201C; by one digital invoice at the end of the month. CHEAPER FUEL The XXImo solution enables customers to execute active upfront steering on costs, because cost control and transparency are key. And indeed where financial savings are concerned, XXImo calculates that, thanks to the pro-active guidance on petrol pricing level, between 7 and 10 Euros can be saved at each filling transaction. The sums are easy to do for a fleet manager who knows (obviously) how many cars he has and how many kilometres each of them drives per year. On top of this, the platform provides a clear insight into the CO2 emission for every service. The XXImo Mobility Card is currently in use in the Netherlands, Belgium, Luxembourg and Germany. The company is preparing a launch in France early next year, and developing a roadmap for further expansion into Europe, supported by Sodexo.

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BUSINESS

UBEEQO:

SAFEDRIVEPOD:

Car-sharing for optimised fleet efficiency

Increasing safety by disabling smartphones when driving

The runner-up was Ubeeqo. This Frenchbased company has been so successful in its approach to corporate car-sharing (followed by the private domain) that it too has attracted a major shareholder. It has been acquired by one of the giants in the rental and mobility industry – Europcar.

The bronze medal went to SafeDrivePod. This Dutch-based company aims to deal with a problem which is on the agendas of governments around the world. The use of smartphones while driving.

Ubeeqo starts by pointing out a staggering figure: ‘95%, this is the percentage of time an average car spends on a car park’. Ubeeqo’s objective is to fight against this inefficiency. The corporate car-sharing solution is able to optimise a company’s fleet by mutualising the cars between people and departments. This increases the cars utilisation rate, and they become easier to book and manage. Optimisation also means that fewer cars are needed in the fleet – with obvious cost savings.

SafeDrivePod offers a complete solution that ensures the touch screen of the smartphone is blocked during driving. The system consists of a pod, a matchbox sized product to be placed in the car, an app, software that the driver installs on his smartphone. And a server which provides the fleet manager with transparency on the use of smart phones by employees, assuring the fleet manager that drivers cannot use their smart phones during driving.

FULL SERVICE In practical terms, Ubeeqo provides the client company with a network of vehicles. These are equipped with hardware which connects the car to the Ubeeqo software and controls the opening of the doors, for authorised drivers. Each of these drivers has access to an individual account, via a private password. Bookings are made on-line or via an app.

NOTIFICATION During driving the touch screen of the smart phone is blocked, and then after 30 seconds of being stationary, the touch screen is un-blocked. If the user switches off Bluetooth or the app, a signal will be sent to the user by text message/e-mail and importantly, when the user has switched off the system several times, a message will be sent automatically to the insurance company/fleet manager or employer. Making calls via the hands free car-kit remains possible, however.

Ubeeqo operates a full service package for its clients: financing the cars, maintaining them, providing the software and hardware, as well as dealing with the drivers. This, the company explains, enables it to deliver the best possible user experience and help fleet managers optimise their daily operations. Ubeeqo operates in France, Belgium, Germany, the UK, Italy and Spain.

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ROI SafedrivePod points out that a full 25% of the total cost of damage is related to the driver being distracted by his or her smart phone. It provides a return on investment within one year by reducing this cost. It estimates a damage cost reduction of 15% by using its system.

Jorge Gonzalez-Iglesias, Country Manager of Ubeeqo Spain, and Benoît Chatelier, CEO of Ubeeqo.

Erik Damen and Paul Hendriks, co-founders of SaveDrivePod.

BUSINESS

We are ready for a flexible future Steven Schoefs @StevenSchoefs

Mercedes-Benz is a frontrunner in alternative powertrain development with the announced launch of an unprecedented range of plug-in-hybrid and electric vehicles. A development with the fleet business clearly in mind, says Stefan Herbert, Head of International Corporate Sales and smart sales functions at MercedesBenz Cars.

“We have a clear, three-lane strategy for powertrain systems: we invest in the latest technology for combustion engines, we have a tailor-made range of plug-in hybrids, and we will be marketing a wider range of electric vehicles”.

Could you expand on that? STEFAN HERBERT Consistent hybridisation is part and parcel of the Mercedes-Benz strategy. We have 8 plug-in-hybrid models already, and will extend this range. As for electric mobility, by 2025 we will have a range of 10 fully electric vehicles. We have created a new brand for electric mobility called EQ. The new brand is heralded by the close-to-production vehicle Concept EQ. It is a preview of our new generation of vehicles with battery-electric drives. And our combustion engines are so advanced that our customers can use them also to optimise their CO2 output.

How does Mercedes-Benz see the future of alternative powertrains for fleets? S.H. Our fleet customers are asking more and more for plug-in-hybrid- and battery-electric mobility, but we are still in the talking stage, mainly. Change will come only when there is sufficient charging infrastructure. Companies and governments are investing in this, so I predict a big change in the next two to three years.

Do you see a role for Mercedes-Benz in expanding the infrastructure? Stefan Herbert (Mercedes-Benz and smart sales), foresees a big change towards alternative powertrains in the next two to three years.

Read more on www.fleeteurope.com 40

S.H. Yes. Wallbox, a recharge product, is one way in which we are helping to complete the ecosystem. We are investing heavily in infrastructure because that will enable the alternatives to flourish. Not just by providing charging points, but also dedicated parking spaces next to the entrance, for example”.

How will alternative motorisations and self-driving cars impact sales? S.H. We will still sell cars – even as the proportion of electric, hybrid and combustion engines will change. In the end, people will still need to get from A to B. Now, there will be a greater need for flexibility, and that is why we offer services like car2go. We are prepared for more flexible mobility modes. 2017, we will be launching more connectivity services, for example.

Any details? S.H. All I can say at this point is that the launches, under the umbrella of Mercedes me, will be continuous and that they will make driving simpler, safer and more relaxed. But the crucial factor will still be the driver. He or she decides when driving assistance systems like Distronic Plus make most sense and when the pleasure of driving is more important.

You are also responsible for smart sales. How does it compare to the EQ Concept? S.H. The smart is a compact, urban car which is tailor-made for the requirements of modern city traffic. In electric drive, it will have a range of up to 160 km. For longer distances zzzor for other uses, you need another vehicle. That is why we have added Mercedes cars to some car2go fleet. As for the vehicles of the EQ brand, it is about combining Mercedes-Benz’ vision on electrified mobility with our capabilities in self-driving technology and connectivity. The EQ models will have a range of around 500 km, with a basic architecture it is suitable for all model series as well as sub-models, such as SUVs, saloons and coupés. So, a varied, and altogether different mobility-friendly concept. FLEET EUROPE #88

BUSINESS

Mobility success requires a multi-brand strategy Steven Schoefs @StevenSchoefs

In his first interview since becoming CEO of new Athlon International, Gero Goetzenberger reflects on the impact of the takeover by Daimler Financial Services: “The future of mobility is multi-brand.”

After acquisition comes integration. How far along in the process are you? GERO GOETZENBERGER We aim to complete the integration in 2018, but our customers will start reaping the benefits long before then, as the process will starts now.

Where will the process start – in the biggest markets, the most challenging ones, or elsewhere? G.G. We will start in parallel in all markets together. But differences in market size, complexity and business model will mean integration will be quicker in some markets than in others.

What are the new Athlon's biggest markets? G.G. The Netherlands and Germany obviously, as these are our home markets. Next to that: Belgium, France and Italy. It's pretty much in line with the overall size of the economies.

You don’t mention UK, where Athlon partners with Lex Autolease. What will happen to Athlon’s pre-existing partnerships? G.G. It is too early to comment on this, as we want to discuss the future of these partnerships with the partners themselves first. We haven’t had time to do that yet. So, I will have to get back to you on that one.

Gero Goetzenberger, CEO of Athlon: “Ultimately, Athlon will be our one and only brand for fleet and mobility management.”

So it makes sense to continue under the Athlon umbrella. As for the Daimler Fleet Management brand, it will continue to exist in parallel, for now.

With the emphasis on the multi-brand approach, what will happen to the captive finance and lease activities with and for Mercedes-Benz? G.G. We will extend the excellence of our captive fleet and mobility services to other brands. Ultimately, however, Athlon will be our one and only brand for fleet and mobility management.

Daimler Financial Services paid €1.1 billion for a portfolio of just a bit over 350,000 vehicles, largely in markets where it already had a presence. Didn’t you pay too much? G.G. I can assure you that our investments follow a very thorough financial analysis. Athlon is successful, innovative and very healthy financially, with excellent customer ratings. And from a strategic angle, we believe fleet management and operational leasing will stay on a growth course for at least until 2025. Beyond that, in an environment with self-driving cars, we will still have a major part to play.

The merged company inherited the Athlon name. Why? And what will happen to the Daimler Fleet Management brand now?

Athlon has a lot of experience in experimenting with mobility services. Daimler and Mercedes have car2go, moovel and the EQ project, among other mobility initiatives. How will the new Athlon integrate these two mobility approaches?

G.G. Both companies have a great heritage, each with over 100 years’ experience in the mobility business. But I firmly believe the future of mobility is multi-brand.

G.G. The mobility angle has been one of the drivers for Daimler Financial Services’ intent to acquire Athlon. And without a doubt, we will be combining FLEET EUROPE #88

BUSINESS

our knowledge to bring new mobility offers to market. Offers in which the car will still be central, but which will include the mobility services demanded by our clients.

Will the new Athlon be a true generalist supplier of mobility, or more a specialist, focusing on selected mobility services? G.G. I don't believe that today we can clearly predict what the mobility of the future will look like, and how we will be able to monetise it. However, now is the ideal time to invest and test, to see which products will work best in the future, and to focus on those products that will define the future of mobility. I am convinced that to be successful, you will need a diversified approach. In that respect, we are well set

up, as we are able to draw on a multitude of experience.

Can you offer any idea of how the mobility of the future will be monetised? G.G. I think that working with and for customers is what will determine who wins the mobility game. Customers will be prepared to pay for services that were developed with and for them. Fee incomes and provisions from own and third party mobility services will play an important role in monetizing as well. Already now we see customers increasingly including mobility elements in their tenders, and that trend will continue. It is up to us to seize the opportunity to supply the services that satisfy that demand, and thus monetise the mobility of the future.

What don't we yet know about Athlon that will surprise us? G.G. In order to underline our multi-brand identity, we not only keep the Athlon HQ in Almere, but we also have moved our German country HQ away from Stuttgart to Düsseldorf. This shows that we are consequently striving for the best market-specific approaches.

Read the complete interview on www.fleeteurope.com

REMARKETING

2017, a year to watch RVs and EVs Frank Jacobs @FrankJacobs

This year will be challenging for the Remarketing industry, say remarketing experts Dean Bowkett and Wolfgang Reinhold – albeit from different perspectives. Bowkett warns of a downward spiral for residual values, while Reinhold says 2017 is the year the sector needs to come to grips with electric vehicles. Seven years – that is how far back you have to go for a similar turning point in the European remarketing industry, says Dean Bowkett, automotive consultant and editor of the recent ExpertEye Automotive Report. “Residual Values (RVs) have consistently trended upwards across Europe since 2010 and have now recovered to pre-crisis levels. But a downward cycle is looming. And once RVs start to head downward in a typical cyclical pattern, the industry starts

to suffer, with leasing companies failing to achieve contract-end residual values in the used-car market”. NUANCED PICTURE So caution is advised in the new year, but not all is doom and gloom. Looking at both the new-car and used-car markets – and how they interact – In key European countries, the picture is nuanced and still largely positive. New-car sales in Europe (EU+EFTA) for 2016 were about 15.3 million, up 7.6% over 2015. In Dean Bowkett's opinion, the 1.8% drop in July sales was a sign of things to come, but they will come slowly. Sales estimates for 2017 have been downgraded by one tenth of a percent, to +5.1%, meaning Europe will stay just under the 16-million record sales figure of 2007. However, that record will be broken, according to the same projection, in 2018, with sales around 16.3 million. Only from 2019 will a decline in new-car sales make itself felt across Europe. ANTIGLOBALIST OUTCOMES Of course, the picture varies across Europe. Switzerland, the Netherlands and the UK are among the most prominent new-car markets expected to start to decline this year already.

“The downward residual value cycle is looming. And once RVs start to head downward, the industry starts to suffer”, says Dean Bowkett.

Another major element to consider is that new-car sales are actually falling, when compared to the rise in Europe's population. This also has implications for the used-car market, which will continue to pick up the slack, for now. That means

FLEET EUROPE #88

REMARKETING

RVs will remain strong for now, and are not under immediate threat – unless from unforeseen political shocks such as radically antiglobalist outcomes of a few important elections coming up across the continent. 25% RISK Segment per segment, small- and mediumcar RVs will continue to trend down, remain strong for MPVs and executive cars, and trend up for SUVs – reflecting the current preferences in the new-car market. For reasons not necessarily related to Brexit, RVs in the UK have started a downward trend, that for now seems to be held off on the continent. “Yet we still believe RVs in Europe have hit a plateau”, says Bowkett. “The next twelve months are the most politically uncertain in a generation and there is clearly a 25% risk of a 10% to 12% fall in RVs across Europe some time in the next two to three years”. SERIOUS RETHINK But 2017 is not only a year in which to watch RVs with more than the usual attention. The same also goes for EVs – Electrical Vehicles. So says international remarketing expert and Car Remarketing Association President Wolfgang Reinhold. “The challenge for us as remarketeers in 2017 is to get to grips with electric vehicles. We need a serious rethink”. Wolfgang Reinhold is a self-avowed skeptic vis-à-vis electric mobility. But Dieselgate has accelerated the ongoing slide away from fossil fuels by the automotive industry. Even though that doesn't necessarily show up in the RV tables. “Immediately after the outbreak of Dieselgate, in week 39 of 2015, there was a dip in RVs. But the market has recovered. In our most recent overview, we no longer see any effect”. FOSSIL WAY OUT Few people realise how narrowly the industry avoided disaster. A worst-case scenario would have put Volkswagen sales – and diesel sales - in a tailspin, with hugely negative effects on the TCO of corporate fleets across Europe. What has changed, is less tangible, but more profound, Wolfgang Reinhold thinks: “Everybody is now very aware that fossilfuel engines – both diesel and petrol – are

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Wolfgang Reinhold: “I can only say: thank God we didn't invest heavily in those early electric vehicles a few years ago.”

on the way out. That means the challenge for this year is how better to integrate EVs into our remarketing strategies”. Despite his personal skepticism, Wolfgang Reinhold realises electric vehicles are approaching a tipping point – with the models shown at the most recent Paris Motor Show boasting ranges of up to 400 km. “That means we are finally moving beyond range anxiety. Which makes it easier to sell these cars, and cheaper to lease them out”. CATCH-22 Which brings us to the Catch-22 of remarketing a rapidly improving product: who wants to by a used EV with a range of 100 km if the new models are doing so much better? “I can only say: thank God we didn't invest heavily in those early EVs a few years ago. Their very low RVs today would have cost us a lot of money”. Reinhold predicts the imminent arrival of EVs with profitable RVs, and the end of market dominance by Nissan and Tesla, thanks to the market entry by Opel, Volkswagen and Mercedes. “The end of diesel and petrol is definitely coming, but for this year, there is no need to panic. Fossil-fuel cars still have a future for at least two decades. So their RVs are not threatened yet”.

MANAGEMENT

I've always been a petrolhead Frank Jacobs @FrankJacobs

“She wasn’t happy about me working in the car industry. But she has since forgiven me”, laughs Andy. Cars were the family business, with Andy Leeden's grandfather, stepdad and uncle working in car dealerships, either in managerial positions or on the sales floor. “Based on their experience, my mum thought I would never have a great career in cars.” BRITISH LEYLAND Andy's family worked mainly with the now defunct British Leyland and Rover brands during the seventies and eighties: “That is when my fascination was born, even though many of the models back then such as Marina and Allegro are what we would now call crap cars.”

“I've always been a petrolhead”, says Andy Leeden, Global Fleet Category Manager at AstraZeneca. In November, he was crowned International Fleet Manager of the Year at the Fleet Europe Awards in Barcelona – showing mothers do not always know best.

Andy grew up around car dealerships, but his interest in automotive reached beyond the retail side: “I was a compulsive car doodler, always drawing fantasy models. I remember the cars that I drew were more streamlined than the more boxy models that were current in that era.” AM RADIO Car designer – that was young Andy's dream job and his predilection for streamlining certainly was in line with trending changes. “But my drawing abilities were not good enough”, he admits. After finishing secondary school, Andy decided not to go to university but to join a retail management-training programme. “It had one major downside, for me as a young man at the time: Saturday working! Mind you, that was before the retail industry introduced Sunday working.” The job was interesting and varied, but nonetheless, Andy missed the smell of

petrol so at 21, he joined an independent daily rental company, in a fleet administrator role. “I saw an ad in the paper, and the main attraction was that they offered a company car”. That did not turn out to be the glamour model Andy might have imagined: “I got a base-model Vauxhall Astra with only 4 gears, an AM radio and manually operated windows. Growing up around cars, I was used to driving more interesting models, but on the other hand, it was new and I got a replacement every 3 months. Yes, that does sound incredible, but that was the daily rental business back in 1988.” THROWING THINGS Andy's entry-level job was as a fleet administrator, which he recalls included a lot of parking tickets. The company he worked for was a small independent with locations across the UK. It was owner-operated – a fact the owner himself made hard to forget: “He was quite the character and had a reputation for going into a rage whenever something did not go exactly as he wanted, and it wasn’t unknown for him to throw things across the office at whomever displeased him at that particular moment.” Fortunately, Andy was never at the receiving end of the man's wrath. Nevertheless, in 2001 after working in fleet and operational management roles at various independent rental and leasing companies he decided to switch into higher gear, when a Fleet Manager role at AstraZeneca became available. Moving from what were essentially SMEs to a multinational proved to be a bit of a culture shock: “At a small company, everything is very immediate. There are no long consultation rounds; there is no need FLEET EUROPE #88

MANAGEMENT

Andy Leeden, International Fleet Manager of the Year 2016, with his Triumph Stag.

for engaging with many stakeholders. The larger a company, the greater the dangers of inertia. Of course, this is not a reflection on the business, but simply due to a difference in scale.” LEARNING CURVE Andy's move to AstraZeneca required more than adapting to a different size of company: “I took over from the outgoing fleet manager in the middle of a transition of a company car scheme to an employee car ownership scheme. Needless to say, it was a very steep learning curve!” After achieving his MCIPs qualification, Andy's career made a decisive shift to Procurement, an area with career opportunities that seemed a natural fit for Andy's skills. “Around 2005, AstraZeneca was looking at above-market procurement opportunities, and a European fleet project was proposed. The timing was perfect, and I put myself forward as Project Manager – perhaps a bit naively, as I did not quite understand the complexity and challenge such a project entailed.” However, Andy rose to the challenge, and grew with the role, which now is a truly global one – more on that on the next pages. PETROLHEAD GENE As any petrolhead should, Andy spends a lot of his spare time... with cars (see box). “But of course I prefer to spend time with FLEET EUROPE #88

my family – my partner Jane and sons Matt (18) and Callum (16). I watch Formula 1 with Matt, but apart from that, the petrolhead gene seems to have skipped a generation and unlike me they are much more into football. We like to relax by cycling and walking, and we regularly holiday in Spain, as we both have fathers living there. I also enjoy reading, especially if it is car-related...” Spoken like a true petrolhead!

“I LOVE THAT V8 ENGINE ROAR” “For my 40th birthday, I bought myself a Triumph Stag as a weekend car, which I've gradually improved over the years. I wanted to drive something different, it had to be a convertible and have a V8 engine. It could have been a Ford Mustang, but I wasn’t sure it would fit in the garage (laughs).” “Like a lot of older cars, the Stag is much more interesting than modern ones. It is beautiful – no doubt being designed by an Italian has had something to do with that. However, while it has the looks, I have to admit that, certainly compared to new cars, it lacks in fuel efficiency... and safety. No, as a fleet professional,

I could not recommend this car as a corporate vehicle (laughs).” “Admittedly, as a car from 1972, it is getting on a bit, but it does have a few surprisingly 'modern' features, such as power steering and electric windows. Understandable, when you consider it was developed to compete with the Mercedes SL. But, then again, it does not have ABS, airbags or stability control...” “Still, it is a great weekend car: we love to drive it with the roof down listening to that great V8 engine roar...”

MANAGEMENT

Fleet Management is Change Management Frank Jacobs @FrankJacobs

Joining AstraZeneca was a steep learning curve, Andy Leeden says. Seeing he was chosen as International Fleet Manager of the Year 2016, it's a path he has navigated with success. One central lesson learnt: “Fleet Management is Change Management”. “Fleet is an enabling function: we have to look at what the business wants, and align the strategy to that end, looking for win-wins”, Andy Leeden says, while reflecting on how business has come full-circle during his tenure: “From 2006 to 2011, the emphasis was on moving away from leasing towards purchasing, because borrowing costs were relatively high and the internal cost of financing a fleet was relatively lower. More recently, we have moved back towards leasing, as this frees up cash to invest in AstraZeneca's new product pipeline.” ONE SIZE FITS ALL Another reason for the pendulum swing back to leasing aligns with the broader market sentiment: “There is much potential in the pay-on-use model. Although there is no one-size-fits-all solution, it is clear that there is a movement towards usage instead of ownership.” As Global Fleet Category Manager, Andy Leeden has overseen the simplification of AstraZeneca's global fleet policy. “A huge task”, he says – and a few figures underscore that assertion: partnering with the HR and Safety/Health/Environment departments, Andy's team introduced a common fleet standard across 32 European markets. This entailed standardising eligibility rules, simplifying selection criteria,

Andy Leeden was crowned International Fleet Manager of the Year on 16 November 2016 in Barcelona – here together with Stefan Herbert of Mercedes-Benz, who handed over the Award.

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consolidating the number of manufacturer brands to four (one premium and three volume) and setting targets for CO2 reduction (-20% over 5 years) and fleet cost (-14% over 4 years). 95% COMPLIANCE “The markets had a great degree of choice at the country level. That was one element making it hard to find consensus, especially across all markets. Other challenges were making the case for change and getting senior stakeholders on board.” The ultimate argument: the change will not only make driving safer and administration easier, but also it will reduce cost considerably, providing a significant benefit for the company. That core message was put across

very well, Andy says. “That explains why, after only one year, our new policy has 95% compliance – with the rest explained by legacy orders.” Of course, international fleet management is not just about setting and achieving high standards, but also about maintaining them. “After having established our 4 brands for 2015-'16, the challenge now is to investigate whether these are still the ones we want to continue with in 2017-'18. If we decide we need to change brands, there is a risk it could open the debate again.” DRIVESUCCESS Three areas of constant care continue to dominate the day-to-day running of large international fleets like that of AstraZeneca:

CORE FACTS ON ASTRAZENECA AstraZeneca is a global, science-led biopharmaceutical company Annual revenue: $24.7 billion 61,500 employees across over 100 countries 19,000 company cars in 71 countries, across Europe, North America, Latin America, Asia Pacific, Africa and Middle East

If you want to improve cost efficiency and roll out an international fleet programme… “Think beyond vehicle TCO and consider Total Cost of Fleet Operations, says Andy: “What time, resources and costs are you employing in running your fleet? Can you simplify and standardise policies and processes whilst retaining an effective business solution that is appropriate for your individual countries?”

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controlling TCO, enhancing safety, and managing the environmental impact. Annual reviews of manufacturers and lease companies are an important element in checking TCO – in fact, Andy prefers to think of it in terms of Total Cost of Fleet Management (see box). With DriveSuccess, the company has introduced a driver safety programme that provides a high-level framework, with 10 modules and a comprehensive resources library. “The aim is to create a safe-driving culture at all levels throughout the company. That includes the DriveSuccess app we developed, to simplify information-gathering on driver safety. The tool, accessible on mobiles, tablets and PCs, has both driver-facing and management-facing applications.

As Global Fleet Category Manager, Andy Leeden has successfully overseen the simplification of AstraZeneca's global fleet policy with a focus on harmonisation, cost efficiency, safety and green.

FLEET CARBON FOOTPRINT At AstraZeneca, maximum CO2 caps for each of the four remaining grade levels are just one of the measures to reduce the fleet's environmental impact. “We have also added eco-driving to our existing safety training programmes”, says Andy. “And we have taken the measure of our fleet carbon footprint taking into account all business miles driven by all cars – not just company cars, but also the grey fleet.” For Andy, the most interesting thing about his job is the fact that it continues to change

constantly. Most of the fun, he says, is still ahead: “The period up to 2025 will be the most exciting time in the fleet business yet. There are so many unknowns coming at us over the next decade. There is the trend from ownership to usage. We have the rise of autonomous driving. We can expect changes in the regulatory environment, except we do not exactly know what is going to happen in that respect. Will diesel vehicles be banned from urban areas, for example? And how is the broader fuel issue going to evolve – will we get a definitive move from fossil fuels to electric – or other alternatives?” BIGGEST UNKNOWNS “Market-wise, the Asian markets are the biggest unknowns: will they progress towards maturity in the same way as Europe and North America have done, or will they follow a new, faster path, and overtake the mature markets?” Whatever changes the future will bring, the essence of Andy's approach will remain the same: “Not just the bit about change management; as a fleet professional, you can only be effective if you are very good at business partnering. You have to realise that solutions – however well they work on paper – will only happen if everyone involved is pulling in the same direction. That will happen when you create win-win situations for all partners involved.”

WHY PHARMA DOES PRODUCE SUCH GREAT FLEET MANAGERS Beyond the fact that they are all recent winners of the same Award, what do Ivor Johnson (Pfizer), Joe Carreira and Robert Patrick (MSD) and Luc Dendievel (Johnson & Johnson) have in common with Andy Leeden, the most recent International Fleet Manager of the Year? The clue is in the company name: they all work in the pharmaceutical business. Why does that industry produce so many great fleet managers?

Pharma companies tend to have large global fleets – so is it a matter of quantity alone, or does quality play a role as well? “I'd have to say quality, although it is true that Pharma has quantity too”, says Andy Leeden. “In the Pharma business, cars are both business tools and important for recruitment and retention. This creates complex situations that require clever solutions. Furthermore, innovation is critical to success in Pharma, and I think this is reflected in their fleet management too.”

From left to right : Luc Dendievel (Johnson & Johnson), Joe Carreira (MSD) and Ivor Johnson (Pfizer).

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Strong foundations to maintain momentum Not many car manufacturers will be able to claim growth of almost 150% in 2016. Yes, INFINITI is growing very fast.

The premium car manufacturer is concentrating on getting the foundations right to grow. For the past two years, the focus for INFINITI has been on expanding its dealer network. The company currently has more than 90 sales outlets in Europe and is expected to increase to 100 at the end first quarter of 2017. It has also added service parts – in order to have the right coverage, manage customer expectations and ensure that all have a service point close to them. MILESTONE YEAR 2016 has been a milestone year for INFINITI models with the launch of the Q30 and QX30, which enabled the brand volumes in the main markets of Europe to increase quickly.

The premium hatchback Q30 has given the brand’s European sales an impressive impulse.

The newest and key product of the INFINITI range is the British built INFINITI Q30; INFINITI's Design and Engineering Centers in the UK were heavily involved in the development of the vehicle. INFINITI’s first ever active compact model has been named as best Euro NCAP Small Family Car of the Year 2015. This underlines the fact that INFINITI is a compelling choice for safety with its

advanced technology, without compromising cutting edge design and performance. On the market since the end of 2016 is the stunning new Q60 sports coupe complete with a choice of either an efficient 2.0 litre petrol engine or the powerful all new 3.0 litre V6 with 400HP and all-wheel drive. In a homogenized world, INFINITI stands for something different. Underneath the head-turning style of every vehicle beats a heart of pure performance and an interior devoted to contemporary luxury. Catering for the needs of businesses large and small, as well as diplomats, embassies and international organisations, INFINITI stands for an unalike quality in product and service offering, with premium business cars for bold and confident business people on the road to success. The current Q50 sedan, launched in 2014, has also been an important car for INFINITI, and there will always be a need for this type of vehicle in fleets. The firm's next-generation 2.0-litre petrol engine technology, the VC-Turbo (Variable Compression Turbo) was unveiled at the Paris Motor Show in September 2016, and according to INFINITI it promises to offer the torque and efficiency of an advanced diesel powertrain without the equivalent emissions.

In a homogenized world, INFINITI stands for something different.

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In December 2016 INFINITI was able to report a new sales record with 230,000 vehicles sold in 2016, of which more than 16,000 units in Europe - up 143 % from the same period last year. This is largely driven by excellent reception of INFINITI’s allnew Q30 and QX30 compact entries by the company’s customers.

ANALYSIS

Seeking the ideal replacement cycle Jonathan Manning

Across Europe, corporate fleets adopt widely different holding periods for their company cars, depending on local conditions. And convergence seems not for tomorrow.

10 THOUGHTS FOR SETTING HOLDING PERIODS 1. The acquisition price of the vehicle and the interest rate on any borrowing. 2. The shape of the depreciation curve over time. 3. The cost of routine maintenance, service and repairs. 4. The length of vehicle warranties. 5. The timing of the first official vehicle inspection. 6. The fuel savings available by replacing older vehicles with more economical new models. 7. The value of ‘lost’ employee time when older vehicles break down. 8. The tax savings available for company and driver by replacing vehicles. 9. The insurance savings and safety improvements from operating new cars with ADAS. 10. T he business benefit from having employees motivated by a new company car.

Fleet managers, concert pianists and comedians rarely find themselves together in the same sentence, but in one area at least their success depends on the same quality – timing. For corporate fleets, the decision about how long to keep company cars is critical to minimising the total cost of ownership (TCO). The challenge is to identify the defleet sweetspot when a car’s depreciation is amortised over the longest possible period, but without service and maintenance costs rising. LOCAL SENSITIVITIES Across Europe, these sweetspots differ from vehicle to vehicle and country to country, each market sensitive to local economic conditions and the demands of used car buyers. Additional factors further muddy the waters. The shifting sands of government taxes and regulations, for example, can change dramatically over a four-year (or longer) holding period, impacting heavily on TCO. Employers also have to assess the emotional value of a company car – how much does a new car boost employee performance, and to what extent does an old car demotivate staff? In an entirely rational world, fleet decision makers would be free to set model-bymodel replacement cycles. This might see different holding periods for two cars in the same choice band, based on data which

shows that, beyond a certain mileage, one becomes unreliable, or requires expensive maintenance work, or proves unattractive to secondhand traders. In the real world, however, such flexibility is unachievable for fleets and leasing companies. The only viable solution is to establish thresholds for holding periods where the depreciation curve has flattened, but the cost of any repairs remains modest. HOLDING PERIODS EXTENDING Across Europe, holding periods have extended in recent years, initially as a reaction to the financial crisis of 2008/09. For some businesses, these longer holding periods then became the new norm. Cars and vans proved themselves to be reliable over higher mileages, and spreading depreciation over longer periods made sound financial sense by minimising running costs, said Andy Hartley, commercial director at Lex Autolease. “The parameters behind these decisions haven’t changed and for such customers they continue to run vehicles to an extended replacement cycle”, he said. Andy Hartley added, however, that, “Other customers temporarily chose to extend vehicle contracts pending greater certainty over their business plans and quickly returned to a normalised replacement cycle following the financial instability of 2008/9.” FLEET EUROPE #88

ANALYSIS

The trend towards longer holding periods continues in Spain, where the struggling economy has pushed the average operating lease term from 42 months in 2007 to 46 months today, according to Juan Arús, Director of magazine Fleet People. A similar development in Italy has pushed average holding periods to 48 months, said Vincenzo Conte, Managing Editor of Auto Aziendali. In Germany, however, the direction of travel is in the other direction, with anecdotal evidence indicating shorter holding periods for user-chooser cars as companies compete to recruit and retain the best staff, said Nicole Holzer, Editor at Firmenauto. She added that “in a volatile used car, the younger a car and the fewer kilometres it has on the clock, the better residual value it can achieve”. In Poland, the situation is different again, with the typical duration of full service leasing contracts being 36 months, while outright purchase fleets keep their cars for 48 months, said Adam Dziedzinski of Fleet.com.pl. No official data exists for Switzerland, but market analyses by Balz Eggenberger, managing partner of fleetcompetence Europe, reveal that about 60% of car leases are for 48 months and 120,000 km, while these thresholds can stretch to six years and 200,000 km for companies that purchase their vehicles.

in the current economic crisis to lengthen contracts in order to lessen TCOs”, said Stéphane Renie. “The UK has always been shorter than the European average, due to residual value optimisation.” And while it may be tempting for purchasing departments to attempt to harmonise contract terms across Europe, Stéphane Renie said companies retained the flexibility at a local level to adopt the most cost efficient holding periods. “I have not seen a company impose a shorter contract in markets where the local tendency is for a longer contract.”

THE AVERAGE ACTUAL FLEET HOLDING PERIODS* MONTHS

60 43 40

The average also obscures a broad spread across principal markets, ranging from 37 months in the UK to 47 months in Spain, shorter still in emerging markets like Turkey (35 months) and Brazil (34). “Most of the western Europe mainland market is about 43 to 45 months, but Spain has longer holding periods – it makes sense FLEET EUROPE #88

FRANCE

GERMANY

ITALY

SPAIN

*These are the actual duration of contracts rather than the original contract length. Source: ALD International, 2017

THE OPTIMUM SELLING TIME

TOTAL COST

COST €

He revealed that the average contract mileage of ALD Automotive’s fleet has fallen from 110,000 km in 2014 to about 100,000 km last year, although the average duration remained at about 43 months. This reflects the modifications that fleets make during the term of a contract, either to terminate early a vehicle or extend its fleet.

Viewed as a whole, replacement cycles are gradually extending across Europe, but annual mileages are falling, said Stéphane Renie, Sales and Marketing director of ALD International.

SERVICE MAINTENANCE REPAIR DEPRECIATION TIME/MILEAGE

The optimum time to sell a vehicle is where the depreciation line intersects with the service, maintenance and repair line. The big challenge in determining the ideal holding period, is to identify the defleet sweetspot when a car’s depreciation is amortised over the longest possible period, but without service and maintenance costs rising.

ANALYSIS

Charging into the future Jonathan Manning

Electric vehicles challenge conventional wisdom about optimum fleet holding periods. In the absence of historic residual value and maintenance data, forecasts for the most cost effective fleet contract can be little more than best guesses.

Establishing the most cost effective holding period for electric vehicles is proving a headache for corporate fleet operators and vehicle leasing companies. Still too many uncertainties make a reliable prognosis about the ideal holding period for EVs almost impossible.

There’s no consensus on the optimum odometer reading for an end-of-contract electric vehicle.

The evidence that does exist points towards extended holding periods that allow fleets and leasing companies to amortise the higher depreciation of EVs over a longer period. Moreover, EV maintenance and repairs ought to be cheaper than combustion engine powered cars, with fewer moving mechanical parts. Finally, given the limited range of battery-powered vehicles, the distances they cover tend to be shorter, so a longer holding period should not lead to an intergalactic mileage. WHEN SKEPTICISM REIGNS But major uncertainties still jeopardise EV residual value forecasts and thus the possible holding period. How long will batteries last? Will demand for second hand EVs increase to meet ex-fleet supply? And will the next generation of EVs be so far advanced of today’s models that corporate fleets will struggle to find any buyers for their current EVs? “Technological obsolescence is a real issue that we have to take account of,” said Stéphane Renie, Sales and Marketing Director of ALD International. He added that ALD Automotive’s EV contracts tend to be of a similar duration to petrol and diesel cars, but a much lower mileage – 40,000 to 70,000 km. Such relatively short distances can pave the way for longer contracts, said Andy

Hartley, Commercial Director at Autolease, market leader in the UK.

Lex

“Depending on the customer’s confidence over the technology and warranties involved, this can result in longer contract lengths than a typical fleet customer, partly in order to spread the investment cost and vehicle depreciation over a longer period of time to optimise monthly costs,” he said. Further complications arise, however, in the form of shared ownership structures for EVs, whereby some manufacturers, like Renault, lease the battery separately. “We’ve found that customers buying a used electric car are put off by the prospect of then having to lease the battery on top of the price of the vehicle,” said Gil Kelly, operations director for Venson Automotive Solutions. “This is not a buying model that car owners are used to. Anything that needs a mindset change from buyers, takes time and education”. In the Light Commercial Vehicle world, manufacturers are realising that to have any chance of strengthening the residual value proposition of EVs, they require a dedicated used vehicle network that can inspect the vehicle, including its battery, electrical elements and cooling system, and a used vehicle warranty offered, said Andy Picton, Senior Commercial Vehicle Editor at Glass’s, part of EurotaxGlass’s Group. “Some are even offering free rapid charging points, free car rental and train journeys as incentives to entice potential customers,” he said. FLEET EUROPE #88

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Leading hybridisation across Europe As the originators of Hybrid powertrain technology and two decades after launching the pioneering Prius, Toyota lead the hybrid market. And they are not planning on slowing down: The all new Prius Plug-in Hybrid will surely contribute to the carmaker’s success, as will Toyota’s car-sharing pilot YUKÕ a project exclusive to full hybrids.

CHARGING TOWARDS 1 MILLION VEHICLES Toyota and Lexus sold more than 928,000 vehicles last year in Europe – an increase of 6% that is mainly attributable to a surge in the demand for hybrid vehicles. Indeed, Toyota total hybrid sales grew by 41% year on year, to 295,000 units, meaning that one in every three vehicles sold by Toyota Motor Europe is now powered by a combination of petrol and electricity. The current hybrid line-up consists of 15 models – from the compact Toyota Yaris to the RAV4, the first hybrid compact SUV; all the way through to Lexus’ flagship model, the LS600h. The new Toyota C-HR, a dynamic coupé cross-over, is expected to boost sales even further. FLEET FAVOURITE: THE NEW PRIUS PLUG-IN HYBRID For the all-new Prius Plug-in Hybrid, Toyota has listened carefully to customer feedback. It features numerous sophisticated technological breakthroughs, such as a Dual Motor EV drive system and two world firsts EV range-extending solar roof and auto air conditioning featuring a gas injection heat pump.

With an EV range doubled to over 50 km and a maximum EV speed increased from 85 to 135 km/h, the new Prius Plug-in Hybrid represents a huge leap forwards in efficiency and driving performance, whilst remaining true to Toyota’s goal of creating the ultimate eco car. Moreover, the Prius can pride itself on being the safest large family car tested by EuroNCAP in 2016. YUKÕ: SHARING THE FUTURE Toyota has created a car sharing pilot offering exclusively full hybrid cars. With this programme, the carmaker wants to extend the delights of full hybrid driving, enjoyed by more than 9.5 million Toyota and Lexus customers around the world, to those customers that choose not to own a car. In Europe, the pilot kicked off in Dublin (Ireland) with 15 hybrid cars and Forli (Italy) with 7 hybrid cars. YUKÕ not only helps solve urban congestion and mobility issues, it also improves air quality thanks to extremely low NOx emissions. After evaluation, Toyota aims to expand the ‘hybrid car club’ throughout the continent.

From the compact Yaris all the way through to the SUV RAV4: the hybrid line-up represents a third of all Toyota sales in Europe.

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There is fleet life after Brexit So, in the words of UK prime minister Theresa May, Brexit means Brexit. Every thinking person in Britain is intensely interested in the outcome of the momentous decision to leave the European Union. Emotions still run high, and denial remains the essence of any negative, or positive, economic news that is broadcast ad nauseam. TONY ELLIOTT Global Fleet Expert

Truth be known, nobody knows just what the impact will be of this momentous decision. Everyone has their own agenda, and those who should know what the ramifications will be frequently place their own particular biased spin on their predictions. Various factions involved in the split declare their own negotiating position with great gusto, but these are probably not genuine positions; but necessary before the commencement of the tough discussions that will take place. Posturing rules the day.

a success in applying trade tariffs on many popular light vehicles, then the retail price of those vehicles would rise in proportion to the increase, thereby potentially raising the Total Cost of Ownership (TCO).

I am neutral as to the decision made by the majority; it is what it is, and we need to try hard to protect those industries that employ us. We need to absorb information, cogitate, and then try very hard to determine what is best for all those concerned.

RESIDUAL VALUES If fewer vehicles were imported from Europe, and other manufacturers and models were sought from other countries outside of Europe, then we would see fewer Italian, French, Spanish and German cars in the used-car market. This could improve the residual values achieved and thereby reduce the TCO. Of course, it would also increase the TCO of those alternative vehicles bought as alternative replacements. Supply and demand still rules the day.

IMPORT/EXPORT So, what impact might the UK Light-Vehicle Fleet Industry experience? The import and export of light vehicles is one area that might be affected. There have been comments in the press predicting trade tariffs between mainland Europe and Britain. This seems to be a move that would hurt both Britain and Europe equally. I would imagine that the light-vehicle manufacturers of Italy, Spain, France and Germany might lobby against this possibility, as indeed would the fewer-numbered vehicle manufacturers in Britain. If there would be

The TCO of Operating Lease rentals would also rise, but would be commensurate with the same increased costs for the fleet users, were they to take on board the operating risks of the fleet. Other tariff-fed fleet cost increases, for spare parts, replacement panels etc., would again add to the TCO.

Would the demand for light fleet vehicles reduce as a result of Brexit? We will certainly see less employees working for those global corporations who decide to relocate their corporations, or certain divisions, to Europe. Whether these relocated staff currently drive a company vehicle or buy their own, there will be fewer vehicles purchased

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EXPERT

From an international corporate trading point of view it might be better to be in the European Union than out, but there is for sure business life outside EU membership.

in Britain. Will this be a significant number? Probably not. These reductions are likely to be negated by relocated ex-pats arriving in Britain from trading companies outside of Europe. But, as mentioned before, we just do not have enough robust information to determine the consequences.

blished in other non-EU countries, and they appear to be not adversely affected by their lack of EU membership, so why would Brexit be different? Yes, it might be better to be in the EU than out, from a corporate trading point of view. But there is life outside EU membership.

FINANCE COSTS What of our finance costs? Well, it is difficult to see what would change to our Banking Governance on finance interest rates as a direct result of Brexit. Yes, we will all experience bank interest rate fluctuations, but these will occur irrespective of Brexit. Again, we see wildly varying speculations regarding the impact of Brexit on the Bank Base Rate, but it might be the case that any fluctuations are fundamentally derived from our general economic circumstances at this time, and not specifically from Brexit. Regarding those Operating Lease companies headquartered in mainland Europe, the question is whether there will be any difference to their UK subsidiaries after Brexit. Or whether there will be any decisions that impact upon global and standalone-UK customers who currently obtain their Operating Leased vehicles from foreign lessors. From experience we know those subsidiaries largely operate on their own two feet: albeit following the broad trading practice rules and requirements of their parent company. Those parents currently have subsidiaries esta-

USED-CAR MARKET The used-car market in Britain is pretty much self-contained, with little import of used vehicles into Britain, or export of used-vehicle stock to other countries. So, are we to see a glut of used vehicles depressing residual values because of Brexit? No, we are not. Yes, with the super new vehicle sales figures achieved by the UK car dealers last year, we will see a higher stock of used cars in three to four years' time, and we will see residual values reduced because of the surplus: but not because of Brexit. As mentioned at the start, it is difficult to determine the true eventual impact of Brexit, both in the UK and in the EU. But, whilst there will undoubtedly be some variances in light-vehicle supply and the TCO, it is hard to visualise that these changes would be significant. Like the European fleet industry, the British industry has battled through many challenges over the past forty-five years, and it has come through them well; stronger as a result. It is doubtful that Brexit will affect the British light-vehicle fleet significantly; certainly less significantly than the difficulties that it has endured before.

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COLOPHON EDITORS Steven Schoefs – Chief Editor sschoefs@nexuscommunication.be Céline Gilson – Project Coordinator cgilson@nexuscommunication.be Houda Joubail – Digital Coordinator hjoubail@nexuscommunication.be CONTRIBUTORS Tim Harrup, Frank Jacobs, Jonathan Manning, Dieter Quartier EXPERTS Tony Elliott (Nexus Communication), Erwin Boumans (BDO Network – www.bdointernational.com) Cover: Hungry Minds – Benjamin Brolet, Athlon International Pictures: ©Shutterstock - ©ThinkStock ©iStock - Benjamin Brolet Layout: Hungry Minds info@hungryminds.be

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SALES & MARKETING David Baudeweyns – International Key Account Manager dbaudeweyns@nexuscommunication.be Sigrid Nauwelaerts – International Key Account Manager snauwelaerts@nexuscommunication.be Daniel Savigny – International Key Account Manager dsavigny@nexuscommunication.be Aline Verpoorten – Internal Sales Assistant averpoorten@nexuscommunication.be Virginie Emonts – Sales and Marketing Assistant vemonts@nexuscommunication.be ADVERTISEMENTS SEAT (2), ALD Automotive (4), BMW Group (13), Jaguar Land Rover (15), Volkswagen Financial Services (29), ŠKODA AUTO A.S.(32-33), Car Remarketing Association (43), Infiniti EMEA (51), Toyota Motor Europe (55), Adam Opel AG (59), Hyundai Motor Europe (60).

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www.fleeteurope.com Fleet Europe is published by Nexus Communication SA Parc Artisanal 11-13, B-4671 Barchon (Belgium) T +32 4 387 87 71 - Fax +32 4 387 90 63 - contact@nexuscommunication.be Fleet Europe is registered and copyrighted trademark. Reproduction rights (texts, advertisements, pictures) reserved for all countries. Received documents will not be returned. By submitting them, the author implicitly authorizes their publication. PUBLISHERS Caroline Thonnon – CEO & Head of Business Development Thierry Degives – CEO & Managing Partner

Charge your fleet with e-motion.

Hyundai has developed a car that will change the way we think about hybrids. It’s the all-new IONIQ Hybrid, and it’s been engineered to deliver all the dynamic driving characteristics of a conventional car. It rewards with a driving experience energised by its sporty 6-speed dual-clutch transmission. It impresses with a 1,300 km driving range, and an extended 8-year or 200,000 km warranty for the powerful lithium-ion polymer battery. And it attracts with a sleek, aerodynamic design that won the Red Dot Design Award 2016. With a drag coefficient of just 0.24 and an energy-efficient powertrain, the IONIQ Hybrid is an attractive addition to any fleet. IONIQ Hybrid. Driven by e-motion.

Fuel consumption in mpg (l/100 km) for IONIQ Hybrid range: Urban 72.7 (3.88) – 83.1 (3.4), Extra Urban 71.9 (3.92) – 78.5 (3.6), Combined 70.6 (4.0) – 83.1 (3.4). CO2 emissions: 92 – 79 g/km. These official EU test figures are to be used as a guide for comparative purposes and may not reflect all driving results. Hyundai provides a 5-Year Unlimited Mileage Warranty. On the lithium-ion polymer battery, Hyundai provides an 8-year or 200,000 km Battery Warranty, whichever occurs first. For the 5-Year Unlimited Mileage Warranty and Battery Warranty, certain terms and exclusions apply. For detailed information on these terms and exclusions, please refer to your local Hyundai website or consult a Hyundai dealership.