News

Demand for electric and plug-in vehicles set to rise in 2017

Written on January 19, 2017

The uptake of electric vehicles is set to rise as early as 2017. A combination of factors – including increased choice of vehicles, improvements in technology and low benefit-in-kind tax rates – are contributing to their rising popularity with drivers and fleet operators.

Over the next five years, the number of electric cars and plug-in hybrids available to consumers is set to double as manufacturers invest in ultra-low emissions options. Some are introducing plug-in cars for the first time this year. In 2015 Jaguar announced the I-PACE, their compact all-electric SUV, leading to theories that sister brand Land Rover will launch their own EV production model. The Volkswagen Group have also proclaimed their commitment to a range of 20 cars with electric propulsion in the next few years.

Furthermore, a group of manufacturers consisting of BMW, Daimler, Ford and the VW Group have announced their intention to boost infrastructure for a European network of superfast car chargers. Targeting 400 sites in Europe, the improved network will reduce plug-in car charging time, aiming to enable long-distance EV travel along major routes by 2020. When charging has progressed to be as convenient as refuelling at traditional petrol stations, it’s expected that many companies will jump to capitalise on economies of scale and improved battery & motor technology.

2016 saw significant changes to the plug-in car grant, reducing available funding based on EV range and total emissions. Additionally, company car drivers with plug-in cars are expected to see steep increases in benefit-in-kind tax payments. Yet customers remain undeterred: drivers of plug-in cars with under 50g/km CO2 emissions will pay benefit-in-kind tax at 9%, which remains a markedly lower rate than for conventional cars.

Fleet operators are set to benefit as well, being able to run plug-in cars at a lower cost than conventionally fuelled cars. Organisations advocating for the benefits of plug-in vehicles suggest they will become much more common among fleets’ choice lists. According to Poppy Welch, head of Go Ultra Low, fleets took up plug-in vehicles at an even faster rate in 2016 than among private consumers. Compared to 2015, the total recorded EV registrations increased by 54%.

Welch said: “Our research shows only 25% of UK businesses offer EVs to employees as company cars – with almost 70% of user-choosers saying they would consider an electric car if the technology was made available to them.

“With recent Government investment in workplace charging initiatives, as well as improving technology from vehicle manufacturers, we expect EVs to be even more popular with businesses and their employees next year and beyond.”

UK fleets warned to prepare for continued rise in fuel price

Written on January 17, 2017

Fleet operatives in the UK are being advised by both Petrolprices.com and the AA to prepare for continued fuel cost increases in 2017. At the time of writing, UK motorists are paying an average of 117p per litre of diesel, with forecasts that the figure could rise to between 120 and 130p by the end of January.

This prediction is based partially on the announcement by OPEC (the Organization of the Petroleum Exporting Countries) of their intention to reverse a global downturn in oil prices by cutting rates of production. Formed of thirteen nations in the Middle East, South America and Africa, OPEC aims to reduce production by 1.2 million barrels daily. Increasing scarcity in the supply will drive price per barrel upwards, having a knock-on effect on prices at the pump.

The RAC is reporting that prices may rise into next year, as happened in 2008, the last time oil production was cut. Luke Bosdet, AA’s fuel spokesman, has warned of biofuel shortages being an additional factor in the rise of diesel prices. He warns there has been a “rubbish harvest” of oil seed this year, which constitutes 4.75% of diesel fuel. Biofuel scarcity could increase prices by a further 1-2p per litre.

Uncertainty surrounding Prime Minister Theresa May’s handling of ‘Brexit’ is cited as another potential factor. Jason Lloyd, managing director of Petrolprices.com, said it is possible prices could fall if markets can be convinced that a “soft Brexit” is forthcoming. However, weakness in the pound follows recent political developments casting doubt on the likelihood of a UK-EU agreement on single market involvement following Article 50’s triggering due in March.

In addition, the recent election and imminent inauguration of America’s impending President Donald Trump is another area prompting reservations. While some fear the outspoken President turning his hand to international relations may affect prices once sworn into office, Trump has also stated his intention to boost American oil production. Perhaps this is why RAC fuel spokesman Simon Williams declined to predict an exact figure, warning instead that fleets “should expect uncertainty” this year.

Eduarda Amaro, principal consultant at Lex Autolease, advises fleet managers to run operations as efficiently as possible based on wholelife costing models, as fuel price fluctuations contribute to 25% of costs. The use of fuel cards to gather data on driver efficiency and behaviour may be another route for businesses to take in order to reduce the impact of the increases.

Mrs Amaro also predicts that fuel duty will remain frozen into 2018 as a result of price rises. She said: “With prices rising at the pumps, hitting drivers with the double whammy of that and an increase in duty would be too much.”

Global oil prices and wholesale costs are affected by many factors. As a result, current short-term forecasts are subject to change.

Changes to car tax and salary sacrifice rules prompt consideration by fleets

Written on January 13, 2017

Parliament is in the process of debating proposed changes to car tax and salary sacrifice rules as part of the 2017 Finance Bill. The changes are to be confirmed at 2017’s spring Budget announcement. The proposals currently recommend significant limits to the tax benefits afforded by salary sacrifice car schemes.

Employees using a salary sacrifice arrangement, or using a company car in place of a cash alternative, will now pay tax connected to their vehicle or cash alternative – whichever has the highest taxable value. These changes will apply to all related contracts entered into on or following April 6th 2017. Those on contracts before April 6th will be exempt from the changes until April of 2021.

Additionally, under the new rules employers will no longer benefit from associated National Insurance savings on many salary sacrifice cars. This has prompted concerns that companies will decrease the selection offered through schemes to employees. There are fears the result may be the removal of such schemes altogether.

However, the changes come with an important caveat regarding low emission vehicles: the limitations will apply only to cars which emit more than 75g/km of CO2. While many worry about increased costs and reduced choice, fleet representative body AFCO has warned employers against reflexively rejecting salary sacrifice car schemes.

Caroline Sanders, Deputy Chairman, said: “Businesses must consider the impact of the change, taking into consideration employer position on CO2 limits and available cars.

“There are many cars that are largely unaffected, others will perhaps become more attractive, such as ultra-low emission vehicles, and others will become less attractive. But that doesn’t mean the destruction of choice lists; it just requires careful consideration of the impact on available vehicles.”

Across the industry, reactions have been mixed. While many employers await clarity from Government and internal review processes before announcing changes to their staff, others have already highlighted the proposals and their probable implications. Rolls-Royce has announced its intention to close its salary sacrifice car scheme. On the other hand, it has been reported that many private and public companies – from the NHS, to Morgan Sindall and the Unipart Group – are favouring the “wait and see” approach.

While the new rules may make salary sacrifice car schemes more expensive for employers, companies must consult their tax advisers and HR representatives to analyse the unique impact on their business and review the options available. It is advisable that employers begin to analyse the immediate impact on both existing vehicle orders and their drivers, offering renewed choices where necessary.

Dan Rees, associate director of Deloitte Car and Mobility Consulting, has indicated that ultra-low emission vehicles will become “more and more attractive” as we approach the 2020/21 tax year, when new benefit-in-kind tax incentives for the cleanest cars – from 16% down to 2% – come into action. With ultra-low emission cars exempted from the proposed changes, it is likely that salary sacrifice car schemes will remain an attractive option for a large number of employers.

Impending cold snap raises fleet safety questions

Written on January 12, 2017

The Met Office has forecasted a dramatic drop in temperatures across the UK starting this week.

Cold air originating in Canada is set to spread southwards today, bringing sub-zero conditions to some parts of the country. Yellow warnings for Severe Weather have been issued in anticipation of increased wind and snow.

Places inland are likely to see only rare snow showers. However, more frequent and disruptive snow showers are expected in northern/western Scotland, Northern Ireland and Irish Sea coastal areas. Eastern coasts will also be affected to a lesser extent around Friday and Saturday. Where snow settles, there is a chance temperatures may hit negative double digits at -8 to -10C.

Overnight frosts, hail and snow showers are predicted, bringing 2-5 centimetres of snow at low ground and 10-30cm on ground beyond 200-300 metres. Some major publications are also reporting on the likelihood of ‘thundersnow’ events, when rain showers and stormy weather combine with snowfall to create blizzard-like conditions.

Even a small amount of snowfall can cause disruption in the UK. Motorists are therefore advised to be cautious on the road during the cold snap. Fleet managers, too, are encouraged to be vigilant with vehicle maintenance. Some things to watch if you’re managing the upkeep and leasing of vehicles this week include:

Cooling System
Frosty weather threatens damage to your vehicle’s engine block when coolant freezes and expands. Refer to the vehicle owner’s manual for recommended coolants designed for winter weather. Check for leaks and repair them if possible. If it’s been a while, you should also ensure the cooling system has been flushed and the coolant refreshed. All of the above should prevent the system’s critical failure.

Fuel Tank
In cold conditions, best practice is to keep your fuel tank above the halfway line. Letting your tank run low risks allowing water vapour to collect in the fuel line, which can freeze and prevent your vehicle from starting. A half-full tank prevents the collection of condensation and reduces the possibility of freezing.

Windscreen Wipers
It is all too easy for windscreen wipers to degrade before the vehicle owner realises, or it’s too late. With rain, frost and snow likely to hit motorists this week, it’s important to check that they are functional before planning any journeys by road. If possible, consider upgrading to heavy duty wipers which withstand ice and snow for only a small cost increase.

Lights
Ensuring all lights on your vehicles are operational is standard practice for most responsible motorists. However, with ice on the roads and increased braking times to be expected, it’s best to ensure your brake lights and indicators are working. Check them manually as the warning lights on your dashboard may not be accurate.

Battery
A vehicle regularly exposed to freezing temperatures risks draining the charge from the battery and preventing it from starting. If you have the capacity to keep your vehicles in a garage, the extra warmth will help the batteries to hold their charge.

If you’re unsure whether you will be affected, check your local weather forecast. The Met Office has issued Severe Weather warnings for most of the UK.

Young men targeted in Christmas drink-drive campaign

Written on December 22, 2016

This year’s drink-drive campaign has just been launched by the government, specifically targeting young male drivers who – according to the latest figures – account for almost two thirds of the drink-drivers killed on the roads.

Various social networks will be used to target the demographic, with advertising to be sent out on Facebook, Twitter and Spotify as well as others. 5.4 million British males aged between 25 and 34 use the networks, and represent the highest single user demographic.

Road Safety minister Andrew Jones said: “Drink-driving destroys families and ruins lives, yet some reckless drivers continue to take the risk and get behind the wheel after drinking – particularly young men who account for almost two thirds of drink drivers killed on our roads.

“We have some of the safest roads in the world and deaths from drink driving have fallen significantly over the last 30 years, but it is still responsible for the deaths of five people every week.

“This Christmas we are specifically targeting the biggest perpetrators of this devastating crime – young men, but our message to everyone remains the same: don’t drink and drive.”

A new advert will be placed on Twitter or Facebook every day throughout December, all of them focusing on the idea of FOMO – the ‘fear of missing out’, and that young men have plenty to live for the following day: a day they may not see if they choose to drink and drive.

Department for Transport research found that 20 per cent of young men have had two or more drinks before driving, and a further 11 per cent had considered it. A third of adult respondents, meanwhile, claimed that doing so would not impact their driving skills.

Research from the National Institute for Health and Care Excellence (NICE), however, demonstrated that a second drink doubles a driver’s chances of being involved in a fatal crash.

Chief Constable Suzette Davenport, said: “Police officers on patrols over the Christmas and New Year period will be specifically targeting people driving under the influence of drugs or alcohol and we will also be doing roadside testing, so we can make instant arrests.

“Our message is very simple and very clear – you are breaking the law, you are risking your life and the lives of those around you and the consequences of doing so will plague you for the rest of your life.”

IAM RoadSmart chief executive Sarah Sillars noted: “Younger drivers and especially young males are at the highest risk on the road in general and it is worrying to see just how high this proportion is in drink drive deaths and serious injuries.

“Through the work we do with offenders, the most common feedback we receive is “I simply didn’t realise”, particularly when it comes to the risk of still being over the limit the next day.

“This clearly demonstrates the need for education, especially for high-risk groups. Our advice is always make it none for the road this Christmas, but if you’re going to have a drink, know your limits.”

Vehicle rental and leasing sector records more growth

Written on December 20, 2016

The number of vehicles operated by the BVRLA has brought membership levels to more than 4.7 million, a figure boosted by a 40 per cent rise in the leasing broker sector.

The BVRLA this week hosted its annual industry conference in the West Midlands, and reported a 16 per cent overall rise in membership during 2016, with the total number of members reaching 908 – 128 more than at the end of 2015.

Chief executive Gerry Keaney said: “The association has now welcomed its 900th member, and we are fast approaching a combined fleet size of five million vehicles, which has never happened before.

“In the past three years, both membership and fleet size have grown by more than 30%, which corresponds with the growing strength of the industry which is now more influential than ever.”

The leasing broker sector was responsible for a great deal of the new memberships, with 308 of the members operating within the group. The number of vehicles that members are responsible for has also grown, reaching 4.7 million, with more than 3.8 million of those vehicles being cars.

Cars and van use within the business leasing sector (contract hire and finance lease) also grew year-on-year, increasing by 5.2 per cent. The car fleet numbers grew by 2.2 per cent, and the corresponding van figure up by 13 per cent.

There was a 10 per cent year-on-year increase in the overall size of the BVRLA car leasing fleet, with personal contract hire accounting for nearly 60 per cent of this: a key discussion topic during the BVRLA’s conference.

A number of other topics were also covered, including Brexit, business car taxation, the economy, emissions, future mobility models, the grey fleet and residual values.
Over 150 executives attended the conference, which was sponsored by a number of companies including Jaguar Land over, Cap HPI and Black Horse.

Delegates were presented with a copy of the BVRLA’s Annual Review, which highlighted the performance of the association through the year as well as detailing plans for the year ahead, in which the association will celebrate its golden anniversary.

FTA launches van excellence report

Written on December 17, 2016

The Freight Transport Association (FTA) has launched its Van Excellence Report for the 2016-17 period, which was designed to analyse the sector as a whole and to illustrate its overall contribution to the UK economy.

LeasePlan sponsored the report, which this year highlights the rapid growth in the UK van market. Over four million vans are now on the UK roads, which the report recognised. However, the report also explored the lack of professional transport skills found in many smaller van operations.

Mark Cartwright, the FTA head of vans, said: “We want to ensure that van operators take safety and compliance as seriously as those running HGV fleets. This requires a cultural change in order to shake off the traditional van driver image and transform the sector into a professional industry.

“All too often a company’s van fleet isn’t seen as part of its health and safety commitment – yet driving is one of the most dangerous activities that most people undertake at work. FTA’s Van Excellence programme can help operators to fully understand their obligations to their employees, customers and other road users, sharing good practice and helping them to acquire the necessary knowledge and skills.”

The FTA’s aim is to try and improve safety and compliance within the sector and to help operators shake off the ‘white van man’ image that many UK motorists still hold.

The body is planning to do this through its ‘Van Excellence’ programme, which was first launched in 2010 in order to help promote best practise within the industry and to promote a higher level of professionalism.

Van Excellence is now operated by more than 115 accredited operators, between them managing over 125,000 vans across the UK. A number of household names use the programme, including BT, DHL, Sainsbury’s and KwikFit amongst others.

This year, the scheme was expanded to include a ‘small van scheme’ designed to enable operators running less than 15 vehicles to participate. The Van Excellence Driver of the Year contest was once again held in order for the finest drivers in the FTA to be recognised for their skills.

The full report was launched at the Commercial Fleet Awards in Birmingham earlier this month, with Balfour Beatty, AAH Pharmaceuticals and Skanska UK all winning.

Lower speed limits could cut pollution

Written on December 13, 2016

The National Institute for Health and Care Excellence (NICE) has produced a document suggesting that variable speed limits could help to reduce levels of air pollution around motorways.

Professor Mark Baker, the director of the centre for guidelines at the NICE, said: “If the traffic is such that you are stopping and starting, decelerating and accelerating, then that increases emissions, pollution and fuel consumption.

“In those circumstances, slowing everything down to 60mph or 50mph is the best approach – but not all the time. That’s why variable speed limits are far more sensible than blanket 50mph or 60mph (limits).

“Variable speed limits are useful where at times the volume of traffic results in unhealthy driving conditions – which is stopping and starting. So M25 most of the time, M4 on a Sunday, M1 on a Friday evening.

“Variable speed limits are justified on roads which are busy enough for traffic to have to break for no other reason than that (the road is) blocked.”

Mr Baker also noted that the battle against air pollution was one that everyone should be “fully committed to” and that the draft guidance sought to “redesign” how people live and work in modern cities.

Professor Paul Lincoln, the chief executive of the UK health forum and chair for the NICE guideline committee, also commented on the new document.

“Traffic-related air pollution is a major risk to the publics’ health and contributes to health inequalities.

“The NICE guidance sets out a strategic range of evidence based practical measures to encourage low or zero emissions transport. This is very timely given the imperative to meet EU and national air quality standards.”

The body has called for both businesses and transport services to try and educate their transport staff in the skills of ‘smooth’ driving, such as turning the engine off at a standstill and avoiding both hard accelerations and decelerations.

A number of recommendations were included in the guidance, including that future city and town plans place buildings further away from roads and that cyclists be screened from motorised traffic by shrubs and plants, especially in situation where they’ve been found to reduce overall air pollution.

Dr Jill Meara, current acting director for the PHE centre of radiation, chemical and environmental hazards, said: “As well as reducing the adverse impact of air pollution on health, the advice will help to improve people’s wellbeing by encouraging exercise, and mitigating against climate change by reducing carbon emissions.”

Government should support digital manufacturing, says SMMT

Written on December 8, 2016

The Society of Motor Manufacturers and Traders (SMMT) has published a new report in which it has called for the Government to support growth in the digital manufacturing sector.

According to the research, there is a £74bn opportunity available for the UK should it adjust its industrial strategy to fully embrace digitalisation during the next two decades.

The digitalisation of the UK Automotive Industry thoroughly examined the future of digital manufacturing, an advent that many have referred to as the ‘fourth industrial revolution’. It highlighted the many potential benefits of the approach, as well as the challenges the UK manufacturing sector must overcome in increasing its use of the technology.

Many in the industry see the transition to digital manufacturing as the biggest step change to occur in the automotive industry since the initial introduction of automation to production lines in the 1960s, rivalled only by the invention of ultra-low emission vehicles (ULEVs) and autonomous car capability.

A number of new technologies are beginning to be introduced, including intelligent robotics, 3D-printing and artificial intelligence combined with data management, all of which can have multiple benefits. Using the technologies, manufacturers will be able to save time, boost their productivity, reduce their costs, cut down waste levels and respond more efficiently to customer demand.

The automotive manufacturer stands to gain £6.9 billion every year by embracing digitalisation, leading to a cumulative benefit to the economy of £74 billion.

Key challenges include the improvement of the UK’s digital infrastructure, the current skills gap in the industry as well as the increase in overall investment in digitalisation. Clearer policies on cyber security and standards will also be necessary.

The SMMT has called for the government to further support the work, and to put digitalisation at the heart of UK industrial policy.

Mike Hawes, SMMT chief executive, said: “We may only be at the beginning of a new industrial era but with innovation and continuous improvement part of the automotive sector’s DNA, we are well placed to embrace the opportunity. Significant capital investment will be necessary and we must put digitalisation at the heart of the UK’s industrial strategy to ensure we are equipped with the right skills, infrastructure and standards.

“The competition from other countries is intense, so we should follow the model that is proving so successful in the development of low emission and connected and autonomous vehicles in the UK, with a collaborative approach between government and industry.”

Congestion could cost UK drivers £62bn by 2025

Written on December 4, 2016

According to forecasts from INRIX, congestion in the UK’s road hotspots could cost motorists £61.8 billion by the year 2025.

Using the INRIX Roadway Analytics tool, more than 200,000 traffic jams were analysed in order to identify and rank 45,662 traffic hotspots across Europe. The study took in 123 major cities across the continent.

The total costs of congestion was calculated as part of the analysis in order to approximate the prices European drivers will pay over the next 10 years as a result of gridlock.

Graham Cookson, the chief economist for INRIX, said: “Only by identifying traffic hotspots and analysing their root causes can we effectively combat congestion.

“Some of the most effective traffic improvement measures have benefited from this approach, like Transport for London’s traffic signal optimisation work, which is reducing delays by 13% and could save drivers £65 million a year.

“The Government has taken a similar approach with its Autumn Statement pledge to spend £220m on reducing gridlock at key ‘pinch points’ on the UK’s strategic road network.”

20,375 UK traffic hotspots were analysed in 21 cities, with ranking determined by ‘impact factor’. This figure was taken by multiplying the average duration of a traffic jam with its average length and the number of times such a jam occurred across September of this year.

The £61.8bn figure is the estimated cost that will be incured should there be no reduction in congestion levels by 2025.

Unsurprisingly, London saw the highest levels of traffic congestion, and had more traffic hotspots (12,776) than anywhere else. The impact of hotspots in the capital was also noted as being 28 times higher than in the other four biggest European cities studied: Rome, Paris, Hamburg and Madrid.

As a result of this, London motorists will pay the highest cost should there be no reduction in future congestion levels. It’s estimated that the total cost for drivers in the capital could reach £42bn over the next decade.

The potential costs in the capital as a whole would be over 15 times higher than Edinburgh, the second highest UK city studied. Other cities in the analysis included Glasgow, Birmingham, Manchester, Bristol, Leeds, Cardiff, Bradford and Belfast.