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Cost and eco benefits drive businesses to electrify

Factors mentioned by fleet and mobility decision makers in the research were topped by reduced fuel expenses (66% of those questioned – up from 54% in 2021) and, in second place, tax incentives (58% – up from 40% last year). A lower environmental impact was third with 54%, total cost of ownership being lower than petrol or diesel vehicles at 41%, while improving the company image only at 37%, and being able to drive in low emissions zones at 33%, despite new cities and areas being added across the country.
shaun sadlier
Shaun Sadlier

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18 August 2022

COST advantages and lower environmental impact head the list of reasons why UK businesses are electrifying their company vehicles, research from the latest Arval Mobility Observatory Barometer shows.

The factors mentioned by fleet and mobility decision makers in the research were topped by reduced fuel expenses (66% of those questioned – up from 54% in 2021) and, in second place, tax incentives (58% – up from 40% last year).

A lower environmental impact was third with 54%, total cost of ownership being lower than petrol or diesel vehicles at 41%, while improving the company image only at 37%, and being able to drive in low emissions zones at 33%, despite new cities and areas being added across the country.

Shaun Sadlier, Head of Arval Mobility Observatory in the UK, said: “As net zero and other corporate environmental targets become increasingly common across organisations of all types and sizes, it is unsurprising to see reduced environmental impact as one of the leading reasons that fleets are electrifying. All kinds of non-ICE cars – hybrid, PHEV and pure EV – offer major gains in this area.

“However, it’s a sign of the times that cost advantages now account for the top two reasons mentioned by the decision makers surveyed. It clearly shows that as operational experience of electrified vehicles grows, fleets are increasingly knowledgeable about the real world potential and financial benefits of their adoption.

“In fact, more than four out of 10 fleets now show an awareness that electrified choices offer a total cost of ownership in line or lower than petrol or diesel alternatives, a key point that is only likely to become more pertinent as oil prices continue to increase.

“Another factor that has seen considerable growth is that employees are increasingly pushing for electrified vehicle adoption, up to 42% in this edition of the research compared to 29% last year. Staff enthusiasm for electrification is a key enabler of rapid change in many organisations.”

The research also asked UK businesses which electrified form of power they had already adopted for their fleet and which they planned to adopt within the next three years. Currently, the most popular are hybrids (54% already adopted/68% adopted and planned), plug-in hybrid (44% against 63%) and battery electric vehicles (36% against 57%).

Sadlier added: “These percentages represent nearly double the rate of adoption compared to the 19 other European countries that we survey, and it applies to all electrified cars and all rates of adoption. The UK is very much amongst the leaders on an international basis when it comes to car fleet electrification.”

Which of the following alternative fuel technologies do you currently use for your car fleet (already using/already using or considering using within the next three years – UK and other European countries)?

UK                     Europe

Plug-in hybrid                                          44%/63%        24%/37%
Hybrid                                                       54%/68%        26%/38%
100% battery electric vehicle                36%/57%        19%/34%

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Why are you already or are considering implement alternative fuel technologies on your car fleet (UK and other European countries)?

UK                                Europe

To reduce fuel expenses                                                                   66%                                46%
For tax incentives                                                                              58%                                35%
Because of their lower environmental impact                            54%                                54%
To anticipate future restrictive policies                                       45%                                34%
To fulfil employee requests                                                             42%                               24%
Because total cost of ownership is lower than ICE vehicles     41%                               36%
To be compliant with your CSR policy                                          38%                             40%
To improve your company image                                                  37%                              41%
To be able to drive in low emissions zones                                 33%                              34%

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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