Volkswagen and diesel engines did not have a great 2015. But has the scandal left some fleet managers wondering whether it may be time to turn their backs on diesel vehicles and start buying or leasing petrol, hybrid or perhaps even fully electric vehicles?
“Each organisation’s circumstances are different, and various factors need weighing up and calculations making”, comments Alan Locke, owner of fleet servicing specialists, AYCEN Garages, in Manchester. “The surge in hybrid and electric vehicle popularity means fleet managers are presented with more and more information to keep abreast of”.
Business and commercial vehicle sales and contract hire are both still led by diesel models. They typically have higher P11D values but much lower CO2 emissions, lower fuel consumption and lower benefit in kind (BIK) rates. The 3% BIK surcharge for diesel vehicles is set to be nullified from the 2016/17 tax year, though.
Alan continues, “Diesel vehicles’ residual values also typically remain higher when the time comes for their disposal and replacement. Servicing typically costs more for diesel vehicles and so do repairs, presenting another factor requiring consideration”.
Fuel economy is still the domain of diesel cars and pump prices have recently fallen just below petrol prices, but modern petrol engines are also becoming increasingly advanced and fuel efficient. For sole traders, freelance professionals and partners or directors who drive more than around 15,000 miles per year, diesel still makes more sense. Low-mileage drivers who don’t frequently venture outside their local areas will usually find that petrol cars better suit their wallets. For light commercial vehicle drivers, diesel is often the only option available.
Lex Autolease’s 2015 Report on Company Motoring found that 7% of the company car drivers surveyed drive hybrid or electric cars, whilst 14% of the fleet managers polled cite hybrids as genuinely practical for companies, with only 1% considering all-electric vehicles (EV) to be truly viable.
British Gas runs a number of fully electric Nissan e-NV200 vans on its fleet and hopes to increase this 0.4% share to 10% of its fleet by 2017. Center Parcs is also experiencing financial and environmental benefits from running forty electric Renault Kangoo vans on its 188-strong fleet, highlighting that EVs certainly are practical for certain companies.
Mileage once again has the deciding vote for some fleets, though, as high-mileage sales representatives and couriers wouldn’t be able to use electric vehicles because of their limited range and sometimes sparse, slow charging facilities. For executives and chauffeurs, the Tesla Model S offers the most viable electric range of circa 265 miles, but the price tag limits its affordability.
“Hybrid vehicles combining either a petrol or diesel engine with one or more electric motors may well be the answer for high-milers”, concludes Alan “Lexus, Mercedes, Audi, BMW and the like all featuring one or more in their ranges, along with more affordable options from Toyota, Volkswagen and Citroen”.
Fleet managers clearly have a lot of factors to balance when deciding which vehicles to recommend and many fleets will likely comprise a mix of diesel and hybrid vehicles for the foreseeable future, leading towards a greener, cleaner economy.
Business Aspects Magazine would like to thank Alan Locke for his participation in this article. To read more of his views, please read his LinkedIn post, Fleet Managers: Are There Viable Alternatives to Diesel?
Alternatively, to discuss your fleet servicing options, call AYCEN Garages on 0161 223 5335.