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Changing need for mobility could see resurgence of company car

Dramatic changes in travel patterns as a result of the pandemic could see increased demand for company cars, in particular for electric vehicles, as business and consumer travel habits evolve.

The research by Alphabet indicated that more than a third (37%) of respondents would now consider using a company car

As drivers continue to avoid public transport where possible, the research by Alphabet indicated that more than a third (37%) would now consider using a company car following the pandemic, to enable them to travel safely, whereas prior to lockdown many employees favoured a cash benefit.

This is underlined by analysis that shows how work travel patterns have changed; only one in three (35%) expects a return to pre-lockdown travel behaviours. And with the latest statement from the Prime Minister indicating that the new raft of restrictions may be in place for six months, it’s likely that the changes to work travel patterns are likely to remain for some time due to ongoing safety concerns. As such, Alphabet has said that fleet managers will need to have a flexible fleet offering to handle these changing preferences when building their future mobility plans.

It’s not the first indication that the fleet sector might actually increase as a result of the pandemic. The Association of Fleet Professionals (AFP) pointed out last week that the company car remains a highly effective tool for business – and in many instances, the only viable transport option.

Dispelling reports that the company car is in potential decline, AFP chair Paul Hollick said that although the use of company cars for sales and account management has seen changes as businesses ditch face-to-face meetings, the company car has a far broader role for businesses and many of the reasons why they have historically been operated are more vital than ever, from job need to human resources considerations.

Hollick also outlined that the drive for electrification was likely to be increasing take-up of company cars and said it was likely that former cash allowance drivers were actually looking to opt back into company car schemes thanks to the 0% Benefit-in-Kind rate for EVs introduced at the start of the current tax year.

Alphabet’s analysis on ‘Fleet Streets: Accelerating changes to travel and transport in the UK’ also underscores how electric vehicle demand is soaring. While SMMT data shows new car registrations fell in August, electric vehicles took a record market share, and nearly a quarter (24%) of respondents to the Alphabet survey said an EV or plug-in hybrid vehicle (PHEV) would be their next choice while 40% would strongly consider one. This is a substantial increase from the 19% of people considering EVs at the end of 2019.

People also want to see businesses supporting the shift to EVs and are prepared to pay for it. Over half (55%) of respondents felt delivery vans should be electric, while one in three said they would be happy to pay extra for an electric delivery vehicle. Fleets that make the shift early have the opportunity to benefit significantly in terms of brand perception and preference.

Commenting on the research, Alan McCleave, UK general manager at charging specialist NewMotion, said: “With a focus on electrification, and the infrastructure to support it, fleets will be a central part of the national recovery from Covid-19 and our path to a greener economy.”

McCleave also called for much more robust smart charging infrastructure. “Fleet managers need to feel confident that powering their plug-in vehicles will be as simple and reliable as it is for traditional vehicles. Introducing interoperability, so a single payment solution works across all charging networks, is a large and necessary change,” he added.

Nick Brownrigg, chief executive officer, Alphabet GB, said the research showed how a lot of changes are here to stay, and added that for fleet managers flexibility is ever more important.

“People are adopting new habits and behaviours so it’s key that digitalisation and sustainability are central to any fleet strategy. Now is the time for all of us to invest and meet the changing needs of employees and customers, so we can ensure everyone feels safe and confident when travelling to work,” he continued.

To read the full Alphabet report, click here.

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.