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Big rise in alternative fuels interest - SMMT

Official figures from the Society of Motor Manufacturers and Traders (SMMT) show demand for electric vehicles (EVs) is flourishing this year following the introduction of the zero-rate benefit-in-kind (BIK) tax in April and the launch of new models.

Registrations of battery electric vehicles (BEVs) rose by 158% in the first half of the year compared with the same period in 2019, from 11,975 to 30,957, with market share increasing from less than 1% to 4.7%.

BEVs are now outperforming plug-in hybrid (PHEV) vehicles for the first time, despite growth in the latter, which were up 29% – from 15,136 to 19,508. PHEVs now account for 3% of the market.

While market share for pure EVs has been artificially elevated by a corresponding slump in demand for petrol and diesel cars due to the coronavirus lockdown, it is still indicative of a turning tide. In May, market share hit double figures with fleets, leasing companies and manufacturers all reporting strong demand on forward orders.

Data from Fleet Intelligence (formerly Sewells Research & Insight) reveals just how strongly the intention to buy is building among fleets and their company car drivers.

Its quarterly Pulse Fleet Policy research suggests an acceleration in electric growth, with companies forecasting an average 8% increase in BEVs on their car fleets over the next 12 months versus a 13% fall in diesel. Hybrid share is expected to rise, by an average of 7%, and PHEVs by 2%, but petrol is in decline, anticipated to drop by 5%.

This trend is being driven by several aspects, headed by more acceptable pricing, plus practical factors such as increased driving range and availability of public charging points.

Pulse shows a more tentative shuffle towards electric for commercial vehicles, with a forecast 3% rise in electric, PHEV and hybrid, but an 8% fall in diesel.

Again, cost is a big influence in fleets’ decision to invest in alternative fuels, as well as readying their operations for an expected tightening of rules around clean air zones.

With the imminent launch of two plug-in hybrid Jeeps and two pure electric vehicles – one car, one van – FCA is well-placed to satisfy this growing corporate demand.

The PHEV Renegade will arrive in showrooms from August with an expected launch date of September.

FCA has opened a portal on its website for the special La Prima edition of the new 500 BEV and has seen strong interest from the corporate sector. The coronavirus pandemic has slightly delayed the launch, but it should be in the UK from Q1 next year.

The fully electric E-Ducato enters the market this month (September) and is already finding its way onto fleets.

FCA fleet and remarketing director Iain Montgomery anticipates modest numbers to begin with, but a rapid growth curve due to the preferential tax treatment of electric, competitive total cost of ownership and a new driver mindset to travelling forged by the experiences of the Covid-19 lockdown.

Expansion of the national charging infrastructure and a growing number of dedicated parking bays in high profile areas are also making electric more visible and, therefore, more acceptable, which will further drive demand.

“The initial feedback and interest are very positive,” Montgomery says. “When you have zero BIK and lower total cost of ownership, it is very compelling. The only thing stopping some people is the range anxiety versus their lifestyle. But, even this is changing as people get used to travelling fewer miles.”

FCA is also seeing a trend towards smaller vehicles while anyone looking to opt out of the company scheme is also being catered for through its personal lease products.

“We will see a steady increase in the mix of electric and PHEV within each model range,” Montgomery adds. “Hybrid and PHEV is a stepping-stone to BEV and we have all three options in our range.”

Meanwhile, the fully electric E-Ducato provides an ideal solution for last-mile delivery operators which are restructuring their logistics operations to hub-and-spoke models in urban areas.

With a range of up to 224 miles for the five modules battery version (137 miles for the three modules) and a 10-year warranty, the large panel van is also a perfect companion for utilities fleets with payload of up to 1,900kg and load space of 17cu m.

FCA is planning a BEV roadshow to give operators the chance to drive and inspect the Ducato.

“We are making a clear mark in the sand with these products, but we will continue to develop hybrid, PHEV and full electric across our range of vehicles,” Montgomery says.

FCA is further supporting uptake with consultancy advice and the inclusion of home charging kits for the 500 BEV via its Mopar division.

However, while both petrol and diesel registrations fell by more than 90% in the first half of the year, they remain an important part of the fleet sector and FCA is continuing to invest heavily in research and development to improve performance and reduce emissions.

Montgomery points to Jeeps with 1.0-litre engines, a “big jump” from just five years ago, as an example of the leaps in technology across its model lines.

“We aren’t ready to press the stop button on petrol and diesel,” he says. “We see ongoing development to make them more efficient, including the introduction of mild hybrid technology.

“It will also be dependent on the industry; for example, diesel makes sense for transport and logistics, but diesel hybrid is a real-world option. We will also see petrol continue to rise and there are plenty of improvements still to be made here.”

He adds: “I can’t see that drive for greater efficiency ever stopping.”