Diesel still top powertrain choice but petrol, hybrid and EVs are on the rise

28 December 2017

Diesel remains the most common fuel choice for cars used by the UK’s top 50 vehicle leasing firms, but with a significant rise in the proportion of hybrid, petrol and electric cars in this year. Changes in demand are due to a mixture of fleet policy changes, growing environmental awareness, government policy and tax benefits.

What changes in demand are the leasing companies seeing?

Diesel cars had a 71.4 percent share for the fifty largest leasing companies in the UK this year. Petrol numbers have risen from 20 to 22.4 percent, with hybrid increasing to 5.2 from 4.9 percent and the share of pure electric cars going from 0.3 up to 0.9 percent over the same period.

According to the major leasing companies, we are not seeing a reaction to the ‘demonisation’ of diesel cars by the press following the VW emissions scandal. Rather, in the majority of cases, firms are turning to alternative fuel cars to take advantage of tax benefits, rather than simply acting out of concern for the environment.

There is still a strong argument for diesel cars in the context of high mileages, despite the Air Quality agenda. Newly introduced tests for real driving emissions (RDE) are further motivating car manufacturers to reduce emissions. As a result of the pressure generated by RDE fuels are continuing to evolve, with substantial investment in the production of advanced fuels. Businesses may be looking at their fleet policies rather more closely with regard to different fuel usage. In the shorter term, it is likely that they will continue to focus on diesel while trying to accelerate the uptake of plug-in hybrid and EV’s where appropriate.

What changes in fleet policy might be expected?

Pure electric cars are seeing a slower uptake than hybrid because, with the exception of Tesla, range is currently limited to below two hundred miles. However, as the uptake of hybrid and electric increases, it will be essential that companies update their policies.

One obvious point will be to ensure that fleet managers say ‘no’ to requests for electric or plug-in hybrid vehicles if the user will struggle to find charging points. Other questions also need addressing. For example, if plug-ins are added to the fleet, how are fuel reimbursements to be paid? Moreover, how do fleet managers ensure that drivers bother to charge their hybrid vehicles if they have a fully expensed fuel account?

While it is clear that the overall trend for the future will be towards the use of ultra-low emission vehicles to support government policy, electric and hybrid powertrains are not currently appropriate for every journey or user. Overall, the average carbon dioxide emissions across the 50 largest UK leasing companies has fallen significantly this year as a result of the switch to Euro 6 diesel, hybrid and electric vehicles. Fleet operators will be looking to continue this trend and will begin to look at their NOx footprint.

In conclusion, diesel will continue to make-up the largest proportion of UK fleet vehicles over the coming years, with a continued rise in the uptake of alternative fuel cars. Companies will need to review their policies to remain relevant as this happens and to stay in step with changes in demand together with government and manufacturer developments.

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