Peter Eldridge

FLEET MANAGERS NEED HELP IN OVERCOMING PLUG-IN VEHICLE CONUNDRUM, ICFM DIRECTOR TELLS SUMMIT

Posted On : 10th Jan, 2018

Fleet decision-makers require encouragement to introduce plug-in vehicles with powerful financial arguments essential to drive environmental policy changes.

However, Peter Eldridge, director of fleet decision-maker training organisation ICFM, told the Go Ultra Low Fleet Summit in London today (Wednesday, January 10) that for UK fleets electric vehicles were a conundrum.

What’s more, he said that plug-in hybrid cars were for “a significant number of fleet managers the proverbial duck out of water operating predominantly outside of their economic efficiency zone” with the typical view being that higher operating costs – and specifically fuel bills – would be the result when compared with equivalent diesel models.

To encourage fleet demand for plug-in company cars, Mr Eldridge outlined a multi-point roadmap that the government could take on board.

Alternatively fuelled cars registered in the UK in 2017 accounted for 4.7% of the new car market, according to Society of Motor Manufacturer and Traders’ (SMMT) data. Mr Eldridge contrasted that with equivalent figures for Norway, which showed that plug-in vehicles accounted for more than 50% of new car registrations last year.

“That pace of development is well supported by generous tax breaks and other driver benefits,” Mr Eldridge told the Summit as he reflected on what was driving decision-making in Norway.

The corporate sector is responsible for buying the majority of new cars in the UK – a 55.8% market share last year according to the SMMT – but for fleet managers to drive along the plug-in vehicle road in significant volume they must:

  • Feel confident about electric vehicle technology and vehicle recharging as well as plug-in vehicle residual values and operating costs
  • Resist company car benefit-in-kind tax ‘loophole’ vehicle choices – specifically plug-in hybrids – that were not fit-for-purpose
  • Not be drawn into poor fleet vehicle decision-making due to fuel type ‘demonisation’ of diesel in recent months.

Mr Eldridge also highlighted the “bizarre” company car benefit-in-kind tax regime that sees drivers selecting a zero emission car in 2017/18 paying 9% tax, rising to 13% in 2018/19 and 16% in 2019/20 – increases of 44% and 23% respectively – before reducing to 2% in 2020/21, an 87.5% cut.

He said: “Fleet drivers will make improved environmental vehicle choices if the benefit-in-kind tax regime is beneficial; electric vehicle recharging is straightforward at all points in their business and personal travel; and electric vehicle choices are not viewed as ‘below status’ due to prohibitive capital and lease costs.”

To overcome fleet decision-maker resistance to widespread plug-in vehicle acceptance, Mr Eldridge said the government could assist by:

  • Outlining a clear long-term policy for all fuel types so businesses could plan their strategies against a background of stability
  • Provide electric vehicle driver taxation and other incentives similar to those available in Norway
  • Recognise that fleet operators required support to make confident vehicle power train choices and implement environmental policy change.

He said: “If that occurs fleet operators can then get down to business and select the right plug-in cars for the right application; help employees understand the benefit-in-kind tax implications of company car choice; provide driver guidance on how to run electric vehicles efficiently and responsibly and particularly to maximise electric miles in plug-in hybrids; and manage street, home and workplace charging routines and etiquette.”

Mr Eldridge suggested that it was also vital that the government published Advisory Fuel Rates and Approved Mileage Allowance Payment rates for plug-in vehicles to simplify the “challenging issue” of mileage reimbursement.

He concluded: “Fleet operators are not averse to change, but they will not expose themselves or their businesses to risks. Plug-in vehicles must be attractive to mainstream fleet operations in terms of technology and cost and currently there remains too many unknowns across a sector that remains embryonic in terms of sales.”

Go Ultra Low is a collaborative campaign, bringing together a consortium of vehicle manufacturers, government and the SMMT that aims to increase business and consumer demand for plug-in vehicles.

JOIN THE ICFM

We are keen to encourage professional development of fleet management skills at all levels. Find out how joining the ICFM can benefit you.

UPGRADE MEMBERSHIP LEVEL

Please login to the Members Area and complete the form to upgrade to Member or Fellow.

Did you know that you may be able to claim tax relief on your ICFM Membership?
If you are a UK tax payer