A new study by Lex Autolease reveals that 8 out of 10 (84%) LCVs, currently on the market, will not meet the EU’s 2020 carbon targets.
The legislation requires manufacturers’ average CO2 emissions, across their LCV ranges, to be lowered to 175g/km by 2016 and then to 147g/km by 2020. The average – for the industry as a whole – stands at 203g/km, according to VCA figures.
4 out of 10 (42%) small sized vans, 8 out of 10 (80%) medium sized vans and all classified large vans, pickup trucks and 4x4s are currently above the 147g/km target.
Manufacturers will be forced to pay a fine for every unit of carbon over the limit multiplied by the quantity of vehicle sales. For some, these fines could be astronomical and run into millions of Euros.
Grahame Neagus, Head of LCV Consultancy at Lex Autolease says: “This may result in some manufacturers ceasing production of high-emitting, engineered LCVs.
“But whether that materialises, or not, it is inevitable that list prices will come under pressure as a result of the increased R&D investment and production costs. Commercial fleets will share at least some of this burden at a time when the industry is already making the move to Euro 6 compliance within the HGV sector.”
Lex Autolease – the largest leasing supplier of LCVs to the fleet market – says that the CO2 legislation also presents a real issue around logistics and vehicle choice for fleet operators.
Grahame Neagus adds: “Many businesses rely on LCVs to function and run effectively. Without the vehicle choice currently available in the market, countless businesses will suffer. This could raise problems in particular with businesses operating in utilities and heavy construction sectors.
“As diesel already dominates the LCV industry, the option of switching to alternatives to reduce CO2 is being studied at length. But there are issues over range and flexibility when moving away from traditional fuel sources.
“Many businesses will need to consider downsizing their LCVs to two or more much smaller models, which will emit less CO2. Whether this will lower overall emissions is unclear, given that vehicle size is often determined by payload.
“Longer term, fleets might need to completely reconfigure their logistics cycle, and the vehicles used within it, or explore new technologies. CNG gas and hybrid range extenders will gradually take greater market share, but the trade off is the higher up-front cost.”
To download a copy of Lex Autolease’s White Paper entitled ‘Proposed EU legislation to limit LCV CO2 emissions’, please visit the ‘Advice’ section at: www.lexautolease.co.uk
For further advice regarding LCVs, please contact Lex Autolease’s Consultancy team on: 0844 824 0270 or email: fleetconsultancy@lexautolease.co.uk
As of last month (January), private and business buyers of EVs will be eligible for up to 25% off the cost of a plug-in car, limited to £5,000. However, the Government intendeds to review the £43m fund in 12 months time, spelling long-term uncertainty for firms looking to invest now.
A poll by Lex Autolease – the UK’s largest provider of company vehicles – reveals that almost half of financial directors (47%) would not pursue their company’s interest in electric vehicles, or plug-in hybrids, if the subsidy was removed.
Chris Chandler, principle consultant at Lex Autolease, says: “We’ve published the actual cost of ownership figures in a new guide, which clearly shows that the subsidy is vital to ensuring these vehicles are cost competitive. Without it, new EVs such as the Nissan Leaf can’t compete with the likes of a diesel Golf or even the Toyota Prius on cost.
“Businesses are sending out a clear signal that their interest in electric vehicles could be seriously diminished without the subsidy. Particularly if future changes mean the numbers no longer stack up.”
In contrast, business drivers say that one-off, up-front incentives are not a major turn on. Only 2% would be enticed by a discount or subsidy, whereas almost half (43%) said that low or zero company car tax would make them want to choose a plug-in hybrid or fully electric vehicle.
Chris Chandler adds: “This spells the way forward for the future of business car taxation, which is essentially more of the same. The current system rewards those who choose clean and frugal vehicles and it has been working well since 2002.
“However with long vehicle replacement cycles the industry needs plenty of advanced notice and a longer term commitment from Government to allow them to adopt these new technologies. Given the scale of the investment by manufacturers, the industry can’t afford for this to be a flash in the pan like scrappage.”
In response to the growing appetite for more information on EVs and plug-in hybrids, and the infrastructure required to support the technology, Lex Autolease has published a freely available in-depth guide.
Entitled – ‘Electric vehicles – the way forward?’ – the report is a culmination of a year-long, in-depth study by Lex Autolease’s Consultancy team. The content details the pros and cons of EV ownership from a business and company car driver perspective. To receive a copy, please email: newsdesk@lexautolease.co.uk
4 out of 10 financial directors would not pay a financial premium to introduce hybrid or fully electric vehicles (EVs), according to a survey by the industry’s largest supplier of company vehicles.
Lex Autolease, which leases 300,000 vehicles to firms nationwide, says its poll of 100 financial directors confirms that cost remains a major barrier to entry for many.
However, for just over a third (35%) of those polled, a price premium of up to 10% - compared to conventional fuels – wouldn’t be too much to swallow.
Further findings from the survey, also reveal that half of firms (53%) would invest in hybrids and EVs if they could match petrol and diesel alternatives on a range of criteria, including running costs and convenience of use.
Marcus Puddy, head of consultancy services at Lex Autolease, says:
“For a long time petrol ruled the roost, but today diesel is the most popular fuel choice. So, who knows what tomorrow will bring given our finite oil reserves and rising carbon taxes?
“The fleet industry is renowned for being an early adopter of new technologies and, over the next five years, we anticipate that EVs will become a practical option, in limited numbers, for firms doing a lot of localised ‘back to base’ short journeys.
“Whether they eventually become a mainstream choice for the company car driver is another matter altogether and this will largely be dictated by how well the current generation of EVs perform on the used car market.”
Following a year-long study, Lex Autolease has developed a comprehensive guide to hybrids and EVs. To request a free copy of ‘Next generation fleets: Is the future electric?’, please email: newsdesk@lexautolease.co.uk
Research from Lex Autolease reveals that drivers often take too long to report road accidents and arrange repairs, giving firms and fleet managers a growing duty of care headache.
Lex Autolease reports that it takes over nine days, on average, for drivers or fleet managers to report an incident involving their vehicle - a delay which could translate into higher maintenance and repair costs as well as increased vehicle and driver downtime.
“Drivers and fleets are quick to report vehicle fire and theft – usually less than five days - but that almost doubles when it comes to standard road traffic accidents, which account for over 90% of all incidents.
“Part of the problem may be employees’ busy work schedules, but in the long run it is counterproductive in terms of managing both time and cost”, says Shaun Perks, Customer Proposition Manager at Lex Autolease.
To help tackle the issue, Lex Autolease has developed a new mobile web service – Mobile LAi – which will give drivers the power to remotely book in repairs, new tyres and replacement windscreens, or report accidents using their mobile handset. The service can also be used to schedule an MOT or service as well as providing access to What Car? reviews.
Perks adds: “Wherever you are in the world, company drivers can now book their car or van in for a vital repair or maintenance job, just by accessing their phone. This literally empowers drivers to deal with emergencies on the spot, while also relieving some of the duty of care burden on the fleet manager. Mobile LAi is great peace of mind tool for both parties, so there really is no excuse for putting off what can be done in an instant.
“And, unlike many apps, Mobile LAi is also available as a mobile website for Blackberrys and other smartphones currently available on the market. If the technology is there, why not use it?”
Lex Autolease says that LAi – its online fleet management platform – is the fastest growing method of interaction with fleet managers and their drivers. Taking the same service to mobile is seen as a natural next step offering customers enhanced speed, convenience and duty of care protection.
“We have over 16,000 regular users of our desktop version of LAi, so we know there is a growing appetite for remote access to our online booking and quotation service. The fact that the app also includes maps, a Kwik-Fit centre locator, useful ‘how to’ guides and car reviews only adds to the appeal.
“But the real power of technology is added speed and convenience. Drivers with iPhones needing to book an emergency repair or scheduled service will find that the forms are pre-populated with vehicle and driver information. That means no more slow typing, inputting passwords and hanging around”, says Perks.
To find out more, please visit www.lexautolease.co.uk/mobileweb or call 0800 012 1234.