Medium-term rental provides fleets with a solution to embrace an EV future

Fleets must transition to a zero-emission future as they address the ‘age of disruption’ and critical to that target is utilisation of structured, penalty-free, medium-term vehicle rental solutions, according to Goodwood Corporate Mobility.

Medium-term rental

Tony Donnelly, chief executive, Goodwood Corporate Mobility

The Government joined the ranks of business ‘disrupters’, according to Tony Donnelly, chief executive of Goodwood Corporate Mobility, with its recent announcement to end the sale of new petrol, diesel, hybrid and plug-in hybrid cars and vans in 2035 – just three vehicle replacement cycles for many fleets – and possibly earlier, subject to consultation.

The idea, for many fleet operators, that company car and van drivers would only have the choice of getting behind the wheel of a 100% electric or hydrogen model in just 15 years’ time was, said Mr Donnelly a ‘disruptive nightmare’ and too far away to be on today’s agenda.

Model choice, lead times, charging point availability and payment methods were, he said, all well-rehearsed issues that required resolving before the Government’s brave new world vision became a reality.

However, such arguments were no reason for fleet managers to put their head in the sand and pretend it was too early to move away from the tried and tested internal combustion engine, said Mr Donnelly in the wake of the recent Budget that pumped hundreds of millions of pounds into encouraging the uptake of electric vehicles.

What’s more, he said, for the majority of employees a company car was not a 24×7 requirement and medium-term electric vehicle rental provided a viable alternative.

He said: “Carbon footprint reduction is an essential business focus and drivers are pushing to get behind the wheel of electric vehicles with company car benefit-in-kind tax 0% in 2020/21, rising to just 1% in 2021/22 and 2% in 2022/23 and then frozen for the next two years.

“Battery electric vehicle model choice is an issue and availability due to long lead times on some models is a problem. However, I am confident that as manufacturers realign production and increase output of electric models – as well as hydrogen – such issues will eventually be overcome.

“Therefore, the easing of vehicle availability at an affordable price requires the implementation of an interim plan that puts fleets in a position to switch quickly. Battery electric vehicles are not viable for all business-critical driving, but they do fit into a blended and broad fleet solution also presently embracing diesel, petrol, hybrid and plug-in hybrid models.

“The fleet industry is starting to go through never-before-seen large scale disruption as it transitions to the zero-emission future promoted by the Government. That future may be 15 years away, but I am aware of many businesses that have started to address the challenges.”

That said, battery electric vehicle driver Mr Donnelly, meant when three, four and five-year vehicle replacement cycles and contract hire agreements expired turning to structured, medium-term flexible rental agreements pending delivery availability of the appropriate plug-in vehicle.

Offering fleets total vehicle operating flexibility in a structured and managed environment, the benefits, said Mr Donnelly included:

  • New car availability – if a suitable electric vehicle is not available an alternative low-emission petrol or diesel model could be provided for up to 12 months
  • Cost neutrality and potentially a saving when compared with existing vehicle arrangements
  • No early termination costs
  • No maintenance costs
  • Vehicle administration managed by a chosen provider including fuel cards being updated and notification to a fleet’s insurer and the Motor Insurance Database.

Mr Donnelly, who calculates he has charged his car at home for the almost 6,000 miles clocked up in 10 months at a cost of less than £30 apart from two uses of charging facilities at an airport that were included in the parking charge, said: “There will be no ‘big bang’ battery electric vehicle switch.

“Instead fleet managers must transition through the age of disruption via a seamless vehicle management process where all service agencies are co-ordinated through a single source that delivers a structured short to mid-term rental solution with cars and vans replaced penalty-free.

“This provides fleets with a balanced and measured platform on which to build their future corporate mobility policy that meets and beats the environmental challenges.

“All the while the mix of vehicles entering a fleet provides an unshakeable overview and menu of options that widens the appeal instead of restricting it. More importantly, a business can focus on its core activities knowing that it is working with an independent resource that does not have a vested interest in selling long-term leasing solutions.”

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