By David Bushnell, Principal Consultant, Alphabet
THE disruption caused by the COVID-19 pandemic brought with it significant changes to travel patterns, business operations and working life, particularly working from home.
Carbon emissions plummeted at a record pace with strict lockdowns and many industries temporarily halting business, causing a decline of 7% in emissions in the UK in 2020 – the biggest drop since the last world war. The drop in emissions also focused business on taking a more environmental stance, with consumers looking to choose brands that have genuine environmental sustainability built into their businesses.
Naturally, travel and transport industries both have a role to play this year in maintaining these positive environmental changes. This has in turn helped accelerate the uptake of electric (EV) and plug-in-hybrid (PHEV) vehicles across the fleet industry. With sales surging for the vehicles in 2020 – EVs saw a 186% rise in registrations; PHEVs a 91% upswing; and between both transmission types accounted for nearly 11% market share – the transition to EVs and PHEVs is set to continue at pace this year, making now the perfect time for SME businesses to assess their ongoing fleet strategy.
Time To Electrify Your SME Fleet
Range and charging anxiety has often been a concern that prevented many companies from mass adoption of electric vehicles. However, this has largely fallen away during the pandemic. With reduced travel and fewer people heading into work five days a week, business mileage profiles are down and investment in public charging is up, making the argument to electrify fleets much more straightforward.
Alphabet’s Electric Vehicles In Figures
46% – the number of all 2020 company car orders that were for EVs
8% – the rise year-on-year for electric vehicles
16% – the rise year-on-year for PHEVs
We expect demand for electric take up to continue in 2021 – see our report Fleet Streets: Accelerating changes to travel and transport in the UK for more on this.
Legislation to ban petrol and diesel cars from 2030, and PHEVs by 2035, means the green direction of travel is clearly laid out. So it’s important that SME fleets and business users now look to offer mobility solutions that incorporate some form of electrification. This will be vital if SME fleets are to meet these ambitious deadlines.
Greater Choice Of Electric Vehicles
When it comes to electric vehicles, people often think of it as transport of the future, viewing it as a one-size-fits-all situation and the upfront cost as a reason to shy away. But as demand grows for the vehicles, and technology and infrastructure continue to develop, we’re seeing more new models and variety than ever before, making electric vehicles a strong competitor in today’s market. Businesses that take the step to electrify sooner rather than later, will find the perfect fit for their fleet and take advantage of the cost savings that come hand-in-hand with going electric.
Not only are there savings on Corporation Tax, National Insurance, maintenance and fuelling with electric, but with the Benefit in Kind (BIK) rates introduced at the start of the last tax year driving employee demand for the vehicles, SMEs now have the momentum behind them to electrify their fleets. This is another reason we will see the adoption of electric continue to accelerate throughout 2021.
While the positives of going electric are undeniable, not all companies will be in a position to take this step yet for a variety of reasons – unsuitability for purpose, perhaps, or lack of sufficient charging infrastructure when matched to journey requirements and driver location. As such, plug-in hybrid vehicles remain an important part of the electrification journey. The technology will provide an essential stepping stone to help businesses transition from traditional petrol and diesel vehicles; particularly while charging infrastructure is more widely established across the UK.
The events brought on by the pandemic last year have created a seismic shift in positive attitudes towards mass electric vehicle adoption. Now with a national time frame upon us, SME fleets need to be looking ahead and strategically planning the transition towards electrification.