It has only sold one electric van to date, but Iveco is so confident EVs are the future that it has appointed Martin Flach to the new position
When you have only sold one electric van in seven years, it might seen a bit incongruous to appoint an alternative fuels director.
But that’s the case at Iveco, which launched the electric Daily in 2010. Martin Flach, appointed to the new role in mid-2016, even admitted to Commercial Fleet back in 2014 that “it made no sense” to run an electric Daily in the UK due to the lack of incentives. So what has changed?
Iveco always insisted it would continue to offer an electric option, regardless of the interest from fleets. The company was the first to go large with a 3.5-tonne van but it will be followed this year by Renault with the Master ZE and Volks-wagen with the eCrafter.
And now Iveco is planning a much bigger push into alternative fuels – electric and compressed natural gas (CNG) – in the belief that, like it or not, environmental pressures to cut vehicle emissions from local authorities and national governments will drag fleets into the world of greener fuels.
The move is very much a long-term strategy and Iveco knows full well it is likely to cost a lot of money in the short term. But, as Flach tells Commercial Fleet magazine, when the sales of such vehicles finally start taking off, he wants Iveco to be firmly in the forefront. The company already occupies a different place in the market than most van manufacturers; its products start at 3.5-tonne gvw and go right up to 44 tonnes.
From the middle of 2017, all these sectors will either have electric variants or CNG/LNG models on offer.
Flach says: “Despite Brexit on the horizon, global warming is the biggest challenge facing our industry at present. The need to develop environmentally-friendly trucks and vans has never been greater and, whether they like it or not, transport chiefs are facing local and regional initiatives against the use of diesel vehicles which will multiply after we leave the EU.
“Some of the operators we talk to are already looking at alternative fuels and we believe interest will increase as time goes by. Taxes on pollutants are on their way and we want to have a pivotal role when the realisation finally hits that fleets will have to buy greener vehicles.”
Flach is planning a major campaign to accompany the launch of these new models. His team is at present negotiating with all Iveco dealers so there will be an alternative fuel ‘champion’ at each who will be responsible for nudging fleet buyers towards these models. They will all be more expensive to buy than their diesel counterparts, but cheaper to run.
He said: “Firstly my team will be targeting existing customers who are appropriate candidates such as local authorities, dot.com delivery companies and firms who operate in and around London. We are getting enquiries every day about electric vans, for example, but at present the front-end price puts them off. We need to explain how the lower running costs and other benefits help to balance the wholelife cost of the vans. When someone goes into a dealership to buy an Iveco vehicle, we will question them about the use they will be put to and, if appropriate, our alternative fuel champions will then gently nudge people in this direction.”
Daily will be offered in a CNG guise from gross vehicle weights between 3.5 tonnes and 7.2 tonnes while electric versions go from 3.5 tonnes to 5.0 tonnes.
Eurocargo gets CNG versions from 12 tonnes to 16 tonnes from the summer, while Stralis will be offered in either CNG or LNG formats.
CNG Dailys lose around 200kg in payload while electric Daily loses up to 300kg dependent on how many battery packs are included. However Flach is hopeful that this problem will soon be ironed out (see panel above).
Another problem is that natural gas is not available at any fuel stations at present, although there are 20 sites across the country where tanks can be filled on contract.
However, Flach said Iveco would help fleets establish their own on-site filling stations where applicable. He said: “If someone comes to us for one vehicle and they don’t live anywhere near an existing filling point, we would say gas is not for them. But anything above about 15 vehicles would warrant an on-site point. These can either be paid for upfront, leased or installed on a pay-for-use basis, so it won’t necessarily cost the fleet any money at first.”
The CNG-powered Daily will cost around £4,000 more than the equivalent diesel but with the possibility of 30% fuel savings, Flach reckons it will break even after two years of typical fleet usage. Following that, savings will be made.
It’s a similar story for Stralis, which has a £20,000-£30,000 premium over diesel but should break even after around two years and 200,000 miles.
Eurocargo prices have yet to be announced but Flach said breaking even on price would be “more challenging”. He added: “For buyers of this vehicle, price won’t be the force behind the buying decision. It will be chosen by fleets which want to cut emissions and help clean up the air in urban environments.”
The electric Daily, costing £80,000 for two battery packs and £100,000 for three, will break even with a diesel equivalent after six years based on the Government’s Plug-In grant, fuel savings, lower maintenance costs and no London Congestion Charge.
However, what is uncertain is the residual value of such vans, which could again sway the equation in diesel’s favour. Battery life could also be an issue after so many years’ use.
Flach admitted: “There is virtually no used market for these vans at present but in five years’ time we believe electric vehicles will be more accepted by used buyers so hope that RVs might improve.”
One of the problems with electric- and gas-powered Daily vans at 3.5 tonnes gross vehicle weight – the biggest seller – is that as the batteries and gas tanks weigh between 200kg and 300kg, the vans lose the same amount in payload to get under the limit. Anything above this weight and operators need an O-Licence and tachograph fitted.
Martin Flach has been at the forefront of the battle to increase the weight of vehicles car licence holders can drive from 3.5 tonnes to 4.25 tonnes in electric and gas vans, so this loss of payload is, effectively, overridden. And, finally, he believes his goal is near.
He said: “I have been in negotiation with the Government over this problem for seven or eight years now and until 18 months ago I was pretty much bashing my head on a wall. In fact I might as well have been talking to a brick wall as no one seemed to think this was a priority. But things started changing about a year ago and finally a consultation document is about to be published and I urge all fleet managers to give their positive views on such a move so legislation can be brought in soon.”
At present in Germany, drivers with car licences are allowed to drive electric vans up to 4.25 tonnes while in France this is allowed for both electric and gas vans.
Flach is hoping the Government will follow suit for both gas and electric and also to obviate the need for O-Licences, tachographs and speed limiters up to 4.25 tonnes.
However, he said: “Some or all these points may finally end up being law and I’m not too worried about the speed limiters as these vans are built for urban use, anyway, but at least we are getting somewhere after all this time.”
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