On the 22nd November 2023, the Chancellor of the Exchequer, Jeremy Hunt, will present the Autumn Statement 2023. Paul Holland, Managing Director for UK/ANZ Fleet at FLEETCOR, discusses the need for the government to keep in mind the developing use of EV ‘Grey Fleets.’
Paul Holland
The UK’s vehicle fleets have spent the last decade weaning themselves off fossil fuels in anticipation of an all-electric future. Sales to fleets have been a significant factor in the total number of electric vehicles (EVs) on Britain’s roads being over 900,000, and have also driven the explosion in infrastructure, both public and private. A major driver has been the looming deadline for the cut-off for internal combustion engine (ICE) vehicles, previously set for 2030.
Today, many of the UK’s fleets are ‘grey fleets’, with a mix of electric and ICE vehicles – research shows these make up around a third of all UK fleets, increasing to a majority in two years. A major reason for this is technical: HGVs and other large vehicles are nearly impossible to run on an electric drivetrain so not feasible at present. Another is cost: some of the original grants for buying new EVs and building the infrastructure for them have expired, although the government still has grants available. Similarly, the 0% Benefit in Kind (BiK) tax was a driver that encouraged adoption of EVs and it remains to be seen if there will be any changes to both grants or BIK in the Chancellors budget. Lastly, smaller fleets are much less likely to have fully transitioned to EVs, at least until the second-hand/resell market matures to make it affordable to buy EVs.
What does this mean for the next budget? We already know that the 2030 cut off is to be delayed by five years, perhaps by as much as a decade, so from the outside, some could argue that EV adoption is going to slow down. However, we don’t think so. The cut off was not a major reason for fleets choosing to adopt EVs – for many businesses it is the sustainability strategy that is important, so that they can reap the cost benefits of EVs in the long run and that they are able to apply for contracts if they meet sustainability goals that they would otherwise be disqualified from. What they need, from the next budget and from the government in general, is support to get across the first hurdle of buying the vehicles themselves and deploying charging stations at either their business or in the homes of employees. That can be done by new grants, but also by reducing the price of electricity and even fossil fuels so that fleets have more cash on hand to make the switch.
