Fleet industry reacts to 2035 petrol and diesel ban

The fleet industry has accused politicians of “not living in the real world” after the Government announced it was bringing forward the ban on the sale of new petrol and diesel cars and vans to 2035.

The Prime Minister Boris Johnson confirmed the much tougher, stricter timetable yesterday (Tuesday February 4), which now also includes a ban on hybrid technology.

Caroline Sandall, chairman of fleet representative body ACFO, said: “Climate change and air quality are major international concerns, but simply advocating a ban on the sale of petrol, diesel and hybrid cars and vans is far too simplistic.

“It is clear politicians do not live in the real world - a world occupied by businesses employing fleet decision-makers that already typically operate the most technologically advanced and therefore the cleanest vehicles available.

“Fleets are, in the main, in the vanguard of introducing plug-in vehicles and taking action to reduce their carbon footprint, but politicians must make it much easier to switch, and switch quickly.

“ACFO is very keen to see a much higher level of commitment to supporting greater take-up of electric vehicles. However, while new car registration figures show that demand is increasing it is being hampered in part due to the right products not being available at the right price with realistic delivery times.

“Simply advocating a ban on the sale of internal combustion engine and plug-in hybrid models is not the answer.

“The Government needs to take control and solve a range of issues that concern fleets.”

According to ACFO they include:

• Electric vehicle charge point anxiety is replacing range anxiety as the big issue for drivers as they consider whether or not to choose a plug-in company car due to a number of concerns that include: the different types of plug-in vehicle recharging points causing confusion around the speed at which a vehicle’s battery will be recharged; different vehicles requiring different connectors to enable charging to take place; and no standard payment system across all charge point providers.
• A commitment that the Plug-In Car and Van Grants will remain in place for years to provide confidence to fleets that they are not a ‘here today, gone tomorrow’ funding solution
• Company car benefit-in-kind tax rates for 2023/24 and 2024/25 in the March 11 Budget to enable long-term fleet manager and company car driver planning.
• Working with National Grid and the electricity distribution network companies to provide confidence that the power supply - and the infrastructure -  required to support the charge to electric vehicles is available
• Support for fleets with significant commercial vehicle operations (both van and HGV) to transition to the new technology - both electric and hydrogen - as adoption is barely registering and vehicle manufacturers seem to be struggling to deliver workable solutions to meet real world operational demands.

Matthew Walters, head of consultancy and customer data services at LeasePlan UK, said: “Though it’s a challenging ambition, it is one we are fully in support of. The next step from the Government now has to be putting a strong robust plan in place to make sure this target is achievable.

“It needs to focus on supporting manufacturers to ensure that supply meets demand, especially as we are due to leave the EU and will cease to be a contributor to its emissions targets by the end of the year.

“It must also prioritise educating the public to debunk the many myths around the move to electric that are out there.

“The complexities around a lack of infrastructure and range anxiety, for example, need to be addressed if we are to bring drivers on the journey.

“Above all, we must do all we can to get there as quickly as possible. There is still a way to go, but we are definitely moving in the right direction.”

The BVRLA, whose members own and operate more than five million cars, vans and trucks and buy nearly 50% of all new vehicles sold each year, is urging to the Government to match its bold new carbon reduction targets by unveiling a comprehensive EV support package in its forthcoming Budget.

Ashley Barnett, head of fleet consultancy at Lex Autolease, said: “While it’s encouraging that an estimated 100,000 electric cars will be registered in the UK in 2020, that’s against a backdrop of 32 million cars on the roads. 

"Price parity between electric cars and their petrol and diesel counterparts isn’t expected until 2025, which is why fiscal support such as plug in grants and low benefit in kind must be maintained in the interim.

“Fleets have always been the pioneers of the newest, cleanest technology, and play an important role in feeding the second hand market. As leasing providers, we have a part to play in forecasting demand accurately and securing adequate supply from manufacturers.

“We look forward to continuing to work with government departments and industry bodies to help the UK transition to a net zero future.”  

BVRLA chief executive, Gerry Keaney, said: “Budget 2020 is an opportunity to set the tone for a new decade in which the transition to decarbonised road transport will be won or lost.

“Fleets are being asked to invest billions of pounds in new electric vehicle technology and infrastructure, which comes at a hefty price premium to its petrol and diesel alternatives.

“To achieve these goals the Government must provide a clear support package through to at least 2025. It must preserve the Plug in Car and Van Grants, maintain a strong set of tax incentives and tackle the huge and often arbitrary costs associated with fleet charging infrastructure.”

Andy Eastlake, managing director of the Low Carbon Vehicle Partnership, said: “We welcome the Government’s proposals to bring forward the target for the ending of the sale of IC-engine cars from 2040 to 2035.

“The target will be challenging for industry and drivers, but if we are to meet the 2050 net zero commitment we must raise our level of ambition in road transport.

"The intent from Government is to give some real clarity on this target and to really gather the widest views before responding in the summer.

"With this in mind, we believe that in this proposal ‘zero means zero’; the desire is for all new cars and vans to emit nothing under all circumstances as soon as feasible. The timing is what we need to pin down. Clearly this will present a number of challenges, but also opportunities.

“Latest information on the fall in battery prices points to electric vehicles achieving price parity with conventional cars within the next five years. But there are already very significant fuel and other cost savings for EV drivers so switching is already a good financial proposition for many.

"In simple terms for the typical driver the aim is that your next car should have a plug, and the one after that should have no engine.

“However, there’s a big job to be done; by the manufacturers in switching over production facilities over a short timescale and by organisations like LowCVP and others in making sure drivers, the energy system and key market players are fully prepared for the electric transition.

“This shortened target will heighten ambition and focus minds to meet the challenges ahead.”

Brian Madderson, chairman of the Petrol Retailers Association (PRA), said: “The Government’s plan to bring forward the ban of petrol, diesel, and hybrid vehicles is ambitious, but does not have a basis in which to achieve it.

The PRA believes that this would not be possible without significant investment into petrol forecourts to provide retrofitted charging infrastructure, which the Government has yet to address. This policy change is largely uncosted, and over reliant on driveway charging points which many drivers will not be able to access, it says.

Madderson said: “Many of our members have already embraced low carbon systems, re-engineering their businesses toward roadside retail with improved car valeting and larger convenience and food-to-go facilities that cater for the slower refilling of electric cars.

“However, there are significant financial and technical hurdles that will need to be overcome to integrate electric vehicle charging into many of their forecourts.

“Until the issue of credible charging infrastructure is addressed this will impede the mass take up of electric vehicles.”

Justin Benson, head of automotive at KPMG UK, said: “It’s already a challenging time for car makers, who are focusing on dealing with new EU emissions targets.

“Though the ban has only been brought forward five years, product development is a seven to 10-year process for car manufacturers, so they will now need to think about redefining their product cycle plans for the UK market in the mid-20s.

“Arguably Europe has been the most strict in terms of emissions, and it is also the UK’s largest trading partner, so the question now is whether European countries will follow suit.”

Road safety and breakdown organisation GEM Motoring Assist has welcomed the announcement.

GEM road safety officer Neil Worth said: "In recent years we have witnessed significant steps in the development of alternative fuel vehicles, and we believe that any remaining concerns about range anxiety and inadequate infrastructure will be dispelled if we all work together to embrace the opportunities of a sustainable future on the roads. 

"We believe that in order for this to succeed, we must have strong leadership and clear information so that road users understand what will happen and when it will happen, as we make ready for the ban in 2035."

Brian Menell, CEO of TechMet, said: “The danger the Government faces is that as a result of these initiatives, OEMs are shifting their vehicle range to significant (or in the case of VW - total) battery powered vehicles, and are not properly considering the risk of supply shortage for essential metals such as cobalt in the medium term. 

“In our opinion this should be a key concern to the Government, as the time lag to get new mine supply from discovery to production can be up to 10 years and is seldom less than five. 

“So with initiatives such as this the projections of EV sales require a tripling of global cobalt production by 2030 (even assuming a thrifting of cobalt by moving to more nickel-rich cathodes), the cobalt price needs to be higher for longer to enable investors to commit significant new capital to enable this to happen. 

“The alternative is a lot worse: no new mine supply emerges, the auto manufacturers sink billions into new Li-ion EVs and so within five years end up paying a huge premium to secure the (by now) very rare cobalt that the market is able to produce.

“If the Government is serious in driving a shift to EVs they must also consider either sovereign investment in the materials pipeline or encourage investors to commit capital into the necessary projects.”

Ben Stansfield, partner at Gowling WLG, said: “The announcement of the ban signals a period of rapid change for the automotive sector. Having committed to net zero carbon emissions by 2050 in 2019, this is amongst the first substantial policy announcements which will help the UK to reach its target. 

“Whilst the change to 2035 is not wholly unexpected, it cannot keep changing so that the Government can gain a positive headline.

“The Environment Bill, which has just restarted its passage through Parliament contains powers enabling the recall of motor vehicles for emissions and environmental performance - as well as new powers in relation to air quality in urban areas. 

“It would help all industry sectors, not just the automotive sector, if a roadmap was published by Government (as the European Commission has done) which sets out what the Government intends to do and by when.” 

Thomas Newby, chief operating officer, field and installation, at Tonik Energy, said: “Transport is the nation’s biggest source of greenhouse gas emissions, so the announcement from the Prime Minister is a momentous one for the UK’s fight against climate change.

“The transition away from fossil-fuelled vehicles cannot come soon enough and whilst the announcement is undoubtedly a step in the right direction; true change - particularly one that is set out to tackle toxic transport systems - requires imagination and action beyond what we have already seen.

“A stretch target comes with its own challenges and public and private sector stakeholders must collaborate to ensure the infrastructure is in place to support the boom in clean, green motoring.

“Not only does the demand for a full cross-section of electric vehicles need to be met, but an assumption that existing electrical connections are suitable for significant increases in power demand from electric vehicles, is likely short-sighted.”