Diesel stays in driving seat

Government policy will result in diesel dominating the company car landscape for years to come, leaving petrol, hybrid and electric vehicles in its wake, according to the country’s biggest leasing company.

Following analysis of measures announced in the Budget, Lex Autolease accuses the Government of committing a tax U-turn on emerging technologies, which could damage the development of low emission vehicles.

Mark Chessman (pictured), commercial director with responsibility for sustainability at Lex Autolease, told Fleet News that the benefit in kind (BIK) changes have "poured cold water" on the prospect of any power struggle between diesel and petrol, let alone any emerging technologies.

He said: "In withdrawing the BIK discount from electric vehicles and hybrids, and increasing the CO2 scale charge so rapidly, the Government has surprised many stakeholders across the motor industry.

"The real fear is that this will make manufacturers think twice about committing to developing low emission technologies – be it electric, hydrogen or any other."

Global need for alternative fuels

However, this view ignores the global need for manufacturers to continue research into alternative fuels.

In Europe alone, they have tough targets on CO2 emissions to meet, while individual markets such as France and Germany are putting greater emphasis on electric vehicles. It’s unlikely research will be put on hold.

In addition, some carmakers refute suggestions that diesel will intensify its hold on the market.

Honda, for example, believes diesel has peaked and predicts a return to petrol. And with new technology like Ford’s 1.0-litre Ecoboost petrol engine, which delivers greater power and efficiency, combined with forecast price rises for diesel when Euro6 engines become law in 2015, fleets could be persuaded to re-consider petrol, particularly if their drivers are covering low mileages.

Concerns with diesel particulate filters (DPFs) have already convinced fleets like the Salvation Army to change policy (see page 50). The AA reports 700 breakdowns per month due to blocked DPFs.

However, it’s true that the Government is not helping to encourage drivers and fleets into ultra low and zero emissions vehicles with its Budget measures. It is particularly pronounced when assessing the highest emitters.

"Over the next four years, vehicles with no tailpipe emissions will be subject to a 15% increase in BIK," said Chessman. "Meanwhile, executives running the most polluting petrol cars will barely notice the standard 2% levy, which will also apply to most other company drivers."