Diesel and petrol sales – when will they really end?

We’re only two months into the new parliament and already the Government is giving confusing signals about its view of the future.

Early this month, it announced the 2040 deadline for the end of sales of new diesel and petrol cars and vans would be brought forward to 2035, adding that hybrid and plug-in cars would also now be included in the ban.

Just as the industry and business was getting to grips with those implications, the transport secretary then said he was considering bringing forward that deadline to 2032.

For many fleets, that new date is three car change cycles and, potentially, just two van change cycles away. Policies will need to be rewritten now to protect businesses from any possible fall in residual values as we get closer to the ban – although some believe there will be a rush of interest in diesel and petrol just ahead of the deadline. I’m not so sure.

The latest a company should be buying only electric cars and vans is 2028, allowing for a four-year wash-out of diesel and petrol vehicles. 

Much depends on the manufacturers

However, the ease with which fleets can make this change will depend of the speed with which manufacturers bring through electric product.

So far, the signs aren’t good. Supply remains limited as manufacturers shift production lines away from conventional fuels to electric. And, those supplies are, in many cases, going to the retail market.

This is because private buyers can put down deposits; corporates cannot. What does this mean for company car drivers looking to change their vehicles soon? If they are unable to get the electric car they want, to take advantage of the zero BIK, do they opt out and take cash? And with that cash, buy used? If so, it could wreck the company car market this year, unless carmakers ringfence EVs for fleets.

It’s something to be aware of for any driver changing their car this year; come 2021, as EV-dedicated production lines open up and manufacturers anxiously look to bring down average emissions to meet the CAFÉ regulations, supply is likely to increase substantially.

Until then, fleets will need to manage driver expectations carefully.