THE Government’s announcement of its 10 point plan to help decarbonise the UK, included bringing down the curtain on new petrol and diesel car sales by 2030.
After that date, only fully electric or hybrid cars will be available to lease or buy.
Ashley Barnett, Head of Consultancy at Lex Autolease, the UK’s largest leasing company, said:
This is a seismic step towards delivering on government’s Road to Zero policy and one we are fully in support of. However, it simply won’t happen overnight. Petrol and diesel-powered cars accounted for 73 per cent of new car sales this year so far.
2030 will come around particularly quickly for businesses with large fleets of traditionally-fuelled cars and vans. With the new target, they’ll have just over two replacement cycles to make the shift. Although more businesses are exploring switching to electric vehicles already, today’s announcement makes this transition much more pressing and firms will need to start to act now.
SME Fleets Should Work Out Transition Strategy
There are certainly plenty of attractive reasons why SME fleets should move over to electric vehicles.
The current benefit in kind taxation levels for company car drivers are highly attractive, running from 0% this taxation year to 1% in 2020-21 and then 2% until the end of the 2025 tax year.
In overall terms, leasing electric cars has also reached price parity because of the lower operating costs of the cars, even though the headline lease rentals may seem prohibitively high.
Martin Brown, the Managing Director of Fleet Alliance, a fleet management company, says there is nothing to fear for directors and businesses going green.
Writing about today’s ban, Brown said:
Do not be afraid, because the reality of EVs is very different to what you might read or what your friends might believe.
Fleet Alliance’s own company car fleet is already more than 70% electrified and I expect this percentage to increase in early 2021 to more than 80% and by end 2021 to fully electric. Some of our drivers have driveways with home charging stations; others live in apartments where there is no access to electric charging. Yet none has ever run out of electricity.
But Brown does caution that SME fleets should start the planning process now as to how and when vehicles will transition.
David Brennan, CEO of Nexus, a vehicle rental business, added:
It is important we acknowledge that businesses cannot ‘go green’ overnight, due to the huge upfront expenditures involved in the move which, in the current climate, will not be viable for many businesses.
Can The Car Makers Make Enough EVs?
Ian Fletcher is the Principal Automotive Analyst at IHS Markit. He says:
One of the major questions will be whether the automotive industry will be ready to meet such a shift. IHS Markit’s view is that car manufacturers are already moving forward with plans to introduce the hardware to meet this goal, and even the decision to end the sale of PHEVs by 2035 is unlikely to destroy long-term product plans that are already in the making.
What About Electric Car Grants?
The current Plug-in Car Grant is worth £3000*, and is open for electric vehicles only, although there are limitations on which cars can qualify.
However, in today’s announcement the Government said it would make £582 million in grants to incentivise take up, which suggests grants will open up once more for PHEV models.
*Editor’s note: the value of the Plug-in Car Grant has been reduced subsequent to this article being written. Its value is now £2500 and vehicle price-capped at £35,000. For further information read: Cuts To Plug-in Car Grant Hit Tesla And Polestar Fleet Choices.