With 5.3 million vehicles on the roads, UK fleets have the potential to accelerate an electric vehicle revolution. A new report from Cornwall Insight and PwC explains how
The government’s net zero ambitions may seem like a secondary priority now as the country struggles to cope with the impact of the COVID-19 pandemic. However, in some sense the need to decarbonise the transport sector has been strengthened by some of the by-products of COVID-19, such as improved air quality and lower noise pollution in cities. So how can the net zero transport agenda be accelerated? The fleet sector has a crucial role to play, a new report from Cornwall Insight and PwC has shown. With 5.3 million vehicles on the UK’s roads, fleets are a major part of the transport sector and could be a crucial component in the journey to net zero. The decarbonisation of the light vehicle fleet will also have a positive impact on air quality. Research in the report states that if all 5.3 million fleet vehicles were to generate zero emissions, as much as 30 million tonnes of CO2 would be eliminated – around 25 per cent of all UK transport emissions. Financial savings can be achieved for field services and logistics fleets by switching to electric power. A comparison from the Energy Savings Trust that compares a diesel and electric van travelling a distance of 20,000 miles per year shows fuel cost saving in excess of £1,961, or 63 per cent for the electric-powered vehicle. Not only do fleets constitute a sizeable proportion of the UK’s transport sector, but they are also responsible for more than half of new car registrations (56 per cent) in 2019. So it is easy to see how the electrification of fleets has transformative implications for EVs. And with a life cycle of between two to four years, fleet electrification has the potential to accelerate growth in the private, secondhand market. As fleets renew their stock, this will not only deliver greater choice and affordability for consumers but will, in turn, act as a catalyst for increased consumer adoption of EVs. Choice and affordability are still one of several barriers to EV update.
Electric Vehicles
The fleet influence
certainty of revenue and profitability. These are highly desirable characteristics of any emerging market. Fleet charging does not have to rely on uncertain future sales streams and revenue stacking models, such as advertising or data analytics, which dominate consumer charging platform. Government policy The research confirmed that government has a major role to play in enabling fleet electrification by providing certainty to all stakeholders across fleets, EV charging providers and investors. Stakeholders involved in fleet electrification welcomed the clarification in the 2020 budget on the future of benefit-inkind tax rates for company cars and the plug-in vehicle grant, which was thought to unlock some investment. However, there are still pressing concerns for policy to address including a more consistent approach to clean air zones (CAZ) in cities in the short term. In the long-term, a policy gap exists from 2032 to 2050 regarding fleet incentives that will need additional details if transport is to deliver its contribution to hitting net zero.
Well-suited to electric Field services, depot-based logistics Charge point operators and leased corporate car fleets in The report also finds that the business particular are likely to electrify first models of charge point operators and accelerate EV adoption. (CPOs) need to incorporate some The nature of their operations suggests key principles to be successful. charging will be the least problematic. Often Building partnerships across the value being depot based, logistics and field service chain is a winning strategy. To electrify players can typically charge overnight. fleets the processes are long and customer Alternatively, those drivers taking their solutions can be complex. Few if any vehicles home can similarly charge overnight. CPOs will have the capabilities Corporate fleets by their nature are to master every facet more flexible and can use a and the report found portfolio of charging solutions If all 5.3 that partnerships from home, rapid, workplace million allow the biggest and destination. What’s fl e vehicles et chance of success. more, driving patterns for w ere to gene Achieving all these segments are scale is a critical typically predictable and emissio rate zero determinant mostly over short and as 30 m ns, as much of success moderate distances. illion to of CO2 nnes but there are As for buses, their wo different ‘shades’ high mileage and elimina uld be of scale from predictability of routes ted basic infrastructure guarantee high charging (i.e. number of utilisation and a defined time charge points), to the window in which to administer the scale of data or knowledge charge. However, energy demand will on the needs and business cycles of be significant and there are competing the fleets that are electrifying. technology solutions, such as hydrogen Charge point operators must become a trusted advisor to the fleet as it enters into a Fleet charging new and unfamiliar environment. The report also reveals that there is Fleets will have needs ranging from ‘money to be made’ in fleet charging now, basic questions to complex infrastructure whereas stable profitability in consumerrequirements and only a trusted advisor led charging is still in the future. can help navigate fleets through every The fleet market offers a more stable stage of the electrification journey. proposition than the current public charging Business models will also need to be driven network. It can guarantee utilisation of by constant innovation as the needs of fleets charging assets due to a combination mature from basic charging infrastructure of potentially millions of vehicles, with to complex energy management. L high mileage requirements providing a predictable demand for charging. Fleet charging assets are also more likely FURTHER INFORMATION to be purchased by large corporates that Read the report here can enter into long-term contracts providing
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