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Diesel is no longer the most popular fuel source for fleet vehicles in the UK. What was an unthinkable idea even a year ago has now become a reality according to new figures from the Society of Motor Manufacturers and Traders (SMMT) which reveal petrol now has 53.2% of the fleet market, up almost 13% on Q1 2017. That diesel has lost its fleet crown is a significant development and one that many environmentalists and advocates of clean air might well welcome.
The picture, however, isn’t that rosy. Recent studies have shown that while diesels are more polluting than petrol, the difference is not as great as some have claimed and that in terms of health-damaging emissions, petrol cars emit up to 62 times more lung damaging pollution in cold weather than their diesel counterparts. There has also been a tendency by many buyers to put off making a purchase until hybrid or electric vehicles become viable, and this has led to both an 8.8% drop in year-on-year cars sales in the UK and an increase in the number of older, dirtier cars remaining on our roads.
While the causes of the situation are complex, many in the industry are pointing the finger of blame at the government. They highlight a lack of coherent strategy on diesels, of taxing them to death and of not putting sufficient support in place for those considering moving to electric car fleets. But is this criticism justified? In this latest blog from Coversure Hull, the fleet insurance specialists, we consider the evidence and the future of diesel.
There’s no denying that the government have been increasingly hard on diesels since the VW emissions scandal broke. In a U-turn on their diesel-first policy of the early 2000s, they have already announced that an outright ban on new diesels by 2040 and pressure is mounting on them to bring this date forward. In 2017 chancellor Phillip Hammond announced a hike in vehicle excise duties (VED) on diesels that came into force in April 2018, and at a local government level cities such as Oxford, Nottingham and London are considering banning diesels as part of their Clean Air Zone (CAZ) initiatives.
With air pollution, especially nitrogen dioxide (NO2) said to contribute to the premature deaths of over 500,000 people in Europe according to a study by the European Environment Agency – 40,000 of whom are in the UK – there are obviously good reasons to see pollution levels fall. Is simply battering diesels the solution though? After all, while NO2 pollution is four times higher from a diesel engine, CO2 emissions – a significant cause of the equally hazardous global warming – are lower. Pushing drivers from one problem fuel to another doesn’t seem like much of a solution.
If the government is determined to see the back of diesels, then, many say, why don’t they just introduce a scrappage scheme and have done with it? A scheme was planned but it has recently been taken off the agenda leaving manufacturers to offer schemes of their own.
This kind of flip-flopping policy change is causing confusion in the minds of drivers and is leading many to do nothing while they wait for electric vehicles to take off. Here too the government have been criticised over a lack of clear policy and direction, but is that entirely fair?
The government has lent support to the electric car revolution and the dawn of electric fleets may be closer than we think. It is thought that by 2020 the U.K. will have more electric car charging points than petrol stations. Local authorities are now offering congestion charge discounts or exclusions for electric vehicles, discounts on charging prices and the government is exempting zero emission vehicles from the new VED rates, so there are definite incentives to running fleets of electric cars.
Of course, electric cars are currently more expensive and many a fleet manager or company finance director will baulk at having to pay more to run their fleet. There are, however, currently grants and dispensations available on electric cars, with up to £5,000 off the price of an electric car, 20% off the cost of an electric van, and grants available for up to 75% of the cost of installing a charging point. All of this does point to the government taking the idea of making Britain’s roads electric a very real possibility.
The viability of electric vehicles – especially for fleet drivers who need to have range flexibility – has long been debated. The charge by manufacturers to get models to market- a drive propelled in no small part by governments anti-diesel stance – has meant choice is now wider than ever, costs are coming down and models such the Tesla 3 have massively increased their range of desirable cars.
Cost-wise there are definite dividends. With mileage costs being about 12p per mile for a standard fleet car and those for an electric one being closer to 3p, there are serious savings to be made. Throw in the 40% reduction in emissions, the increasing tax advantages that these will bring down the line and their ability to enter a CAZ and the case for electric vehicles starts to look compelling.
It’s hard not to find fault with the government’s attitude toward diesels. Loading on the tax, backing bans, emphasising their – but not petrol’s – health risks and calling for their complete abolition without providing a scrappage scheme or making sufficient investment in alternatives such as hybrids and electric cars does feel inconsistent. What is required it seems is clear, joined up guidance from manufacturers and government that sets out how we will practically move to a low emission economy and the support they intend to put in place to make that happen. This needs to come sooner rather than later.
If you would like to know more about fleet insurance or would like some help getting the fleet insurance that’s right for you, then please contact us by calling us free on 0800 977 6037, on Hull (01482) 434343, email us by clicking here or request a no-obligation fleet insurance quote here.