ACFO members have been urged to sign-up to the Government-backed Plugged-in Fleets Initiative 100 to discover if electric or plug-in hybrid vehicles make sense for their businesses.
The call came from Kate Armitage, electric vehicle team manager at EDF Energy, one of the partners in the scheme, which is being managed by the Energy Saving Trust (EST).
She made the request at this year's ACFO Conference and AGM, which was supported by EDF Energy and Peugeot and held at Rockingham Motor Speedway in Northamptonshire on Thursday, May 16. The event was sponsored for the first time by industry publication GreenFleet and was held alongside its eighth environmentally-focussed Arrive'n'Drive event, which gave fleet chiefs the opportunity to drive the latest zero and low emission vehicles and learn from exhibitors more about implementing emission-reducing operating strategies.
As part of the Plugged-in Fleets Initiative (PIFI), which is funded by the Department for Transport and Transport for London, the EST is undertaking a free bespoke analysis on 100 fleets to help them understand where ultra-low emission vehicles could work for them.
Interested fleets should contact the EST, complete an application form and provide data about their fleet including the types of cars and vans operated, usage and mileage patterns.
Critically, applicants must also acknowledge the internal support of a board level director for the potential introduction of electric or plug-in hybrid vehicles.
The initiative is open to fleets in England operating vehicles under 3.5 tonnes. Participating fleets must commit to:
- Completing an application form and signing a pledge committing to engage in the initiative and seriously consider the recommendations
- Share live fleet lists, vehicle usage and fuel data with EST
- Attend two face to face meetings with an EST fleet consultant
- Share high level findings in a public report.
Based on information provided and interviews with an organisation's fleet decision-maker, the EST team will provide:
- A detailed report and analysis with recommendations of how plug-in vehicles could work in a business
- A whole life cost analysis, comparing a fleet's existing vehicles with suitable plug-in alternatives
- Infrastructure advice
- A tailored final report.
Twenty fleets have already taken part in the Plugged-in Fleets initiative and with the programme's extension to a further 100 organisations, Ms Armitage said: "The programme is aimed at helping fleets to come to a decision on whether to introduce electric and plug-in hybrid vehicles to their fleets. We are looking for small, medium and large fleets and across all market sectors.
"We are now recruiting fleets to the programme with reports carried out on a first come first served basis. There will not be 100% electric vehicle fleets; that would be naive. However, the reports make the business case for electric and plug-in hybrid vehicles in appropriate fleet applications."
Fleet chiefs told to liaise with leasing companies to curb end-of-contract charges
Fleet operators must liaise with their vehicle leasing providers in a bid to control end-of-contract damage charges.
That was the message to ACFO Conference delegates from Jim McNally, asset risk manager at vehicle leasing and management company Alphabet and chairman of the British Vehicle Rental and Leasing Association's Residual Value and Remarketing Committee.
Research by industry publication Fleet News for its 'FN50' survey of the UK's top 50 contract hire and leasing companies in 2012 estimated end of lease damage charges collectively added up to £45 million to fleet budgets.
Mr McNally said: "Leasing companies don't want to have end-of-contract charges. We would rather price for vehicle usage appropriately at the outset.
"If a fleet is going to use a vehicle in a quarry then don't tell us that it will be used on the motorway because we will build the price strategy against that usage."
He told delegates: "Talk to your leasing provider who will structure a rental that works for you and them."
End-of-contract charges - or de-hire damage - is a compensation payment to leasing companies for returning a vehicle back to the condition outlined in a lease agreement.
Using the example of a BMW 320d Efficient Dynamics, Mr McNally said experts CAP predicted a residual value in 'clean' condition of £9,950 at three years/60,000 miles (May 2013); £9,400 in 'average' condition' and £8,800 in 'below average'.
"A £1,150 reduction on a car worth less than £10,000 is significant," said Mr McNally, who urged fleet managers and drivers to appraise vehicle condition up to three months prior to the end of lease termination.
"De-hire damage is the biggest cause of dispute between leasing companies and their customers. Inspecting vehicles 10-12 weeks before end of contract means fleet managers have the opportunity to mitigate end-of-contract damage charges."
He also urged fleet managers to remind drivers of leased vehicles to ensure cars and vans were serviced in accordance with manufacturer schedules saying it was 'key to a vehicle retaining its value'.
Finally, he reminded fleet operators that the non-return of keys - both the master key and the 'slave' key - was a further 'significant' end-of-contract additional charge for fleets.
Peugeot targets hybrid growth and plans Mu for corporates
The race is on among motor manufacturers to introduce a wider range of hybrid vehicles to meet fleet demand for low emission, frugal fuel vehicles, according to Gareth Foden, Peugeot's head of leasing and rental.
"Hybrid is the growth area," forecasted Mr Foden at the ACFO Conference, but added that there would be room in the fleet parc for traditional internal combustion engine and electric powered vehicles.
Peugeot, which is at the forefront of hybrid vehicle development, plans to introduce 'hybrid air' technology in 2016 with Mr Foden explaining that mating a diesel engine and air compression would deliver a car with CO2 emissions of 69 g/km and fuel economy of 97.4 mpg.
"It is something for the future, but will be here in a couple of years time," said Mr Foden, who was speaking at the Conference on behalf of event supporter Peugeot, which has the lowest CO2 emissions in Europe - averaging 121.6 g/km in 2012 with two in every three Peugeot vehicles emittingCO2 of less than 130g/km.
Legislators in Whitehall and Brussels are driving manufacturers to produce vehicles with ever lower emissions to meet taxation and environmental requirements, but Mr Foden predicted that electric vehicle sales in 2020 would be around 4-5%, half what was previously forecast by some experts due to infrastructure and range anxiety issues.
He promised that manufacturers would introduce hybrid light commercial vehicles as well as cars.
Additionally, Mr Foden predicted that the traditional fleet vehicle ownership model was under threat from vehicle mobility schemes.
Peugeot launched Mu and billed it as the 'ultimate mobility solution' with customers able to rent a vehicle, scooter or bike for a specific journey.
Mr Foden said: "Over the next 12 months Peugeot will expand the Mu scheme to present a corporate solution for fleets in major cities in the UK to drive down their CO2 footprint and save costs.
"The traditional ownership model is under threat with fleets able to rent the right vehicle for the right journey and that will drive down their CO2 footprint and save costs."
'Do the maths' and make savings by withdrawing fuel for private use
An estimated 10-15% of businesses continue to offer employees a fully expensed company car, but both parties would almost certainly be financially better off if the perceived 'benefit' was removed.
Matthew Walters, head of consultancy services at vehicle management company LeasePlan told the ACFO Conference that 'cash and fuel' was the big issue raised by fleets.
"Fuel is the biggest cost driver in fleet," said Walters, who said introducing fuel cards was the 'obvious answer' to help manage costs.
However, he said fleets that continued to pay for employees' private as well as business mileage frequently failed to appreciate that they were also paying Class 1A National Insurance on the 'perk', which the Government is taxing on a benefit charge of £21,100 in 2013/14.
"Those businesses should change the way they fund fuel and they would realise the benefits immediately," said Mr Walters, who also urged drivers to 'do the maths' to realise that they would in almost every case be financially better off giving up the 'perk' and paying for fuel used privately out of their own pocket.
He added: "The easy solution for employers is to issue fuel cards to drivers and recharge them for private mileage at the value of the fuel through expenses."
Motor manufacturers to put SMR in the spotlight with new measures
An increase in the number of motor manufacturers offering vehicle service packs, national pricing and even longer warranties has been predicted by a fleet expert.
Steve Huddart, service, maintenance and repair (SMR) leader, GE Capital, made the forecast at this year's ACFO Conference.
"Selected manufacturers are now offering service packs as well as introducing national pricing policies in a bid to retain SMR work within their franchise dealer networks and there will be a point in time when every manufacturer is offering service packs or national pricing," Mr Huddart predicted.
Additionally, the advent of longer warranties - Kia offers a seven-year warranty - could continue with Mr Huddart forecasting other manufacturers will follow.
"Longer warranties give us the opportunities to make sure that more SMR work is covered under warranty," explained Mr Huddart, with the benefit for fleets being that SMR costs could be more accurately forecasted.
Meanwhile, one of the biggest challenges facing vehicle leasing companies is to ensure that company car and van drivers have their vehicles serviced on time in accordance with manufacturer schedules.
"The sooner the vehicle is serviced costs will be mitigated," he said. "It is a big challenge to get vehicles in for service on time; the onus is on the driver."
Mr Huddart also revealed the top complaints received by GE from customers in relation to SMR:
- Complaint against garage - 25%
- Vehicle reliability - 18%
- Vehicle individual fault - 12%
ACFO directors elected
Richard Baird, head of new business development at Marshall Leasing, has been elected to ACFO's board of directors for the first time.
ACFO has a six-strong board and directors Julie Jenner, key solutions manager UK, GE Capital, and Brian Ingham retired by rotation.
Ms Jenner, an ACFO director for 10 years and chairman for seven years, was re-elected.
Mr Ingham, who will be 65 later this year and served as a director for 10 years did not seek re-election. His place on the board has been taken by Mr Baird, who has a 24-year association with ACFO and is chairman of the organisation's London East Region.