There’s been a lot of political in-fighting over the subject of net zero, including what’s at stake for fleets. Alex Grant, editor-at-large, looks at the current state of play…

Alex Grant, Fleet World editor-at-large

Stability is a cornerstone of fleet decision-making, but it’s become increasingly rare. The world has changed immeasurably since demand for diesel peaked just 10 years ago. Sustainability has gained momentum despite political turmoil, a pandemic, war and supply chain challenges – and Net Zero remains the goal for 2050. The Autumn Statement filled some important gaps for fleets, but the impact of lethargic decision-making is increasingly clear.

Confusion is rife. A recent survey for World EV Day showed 46% of UK drivers believe electric vehicles cost more to run than petrol or diesel cars. Unsurprisingly, after months of bad news about energy prices, less than half expected to pay less for charging than for liquid fuel, but awareness of even the clearest benefits was low. For example, only 47% of the most cost-conscious respondents realised they’d save money on tax – EVs currently qualify for zero-rate VED and 2% Benefit-in-Kind. Even EV drivers were unsure about some costs.

The Government hasn’t helped. Having deferred important decisions through the summer, while mired in a leadership contest, it announced a two-year energy price cap in September, which also fixed the cost of EV charging at a lower level than liquid fuel. Five weeks and one new Chancellor later, that same scheme was cut to six months, then extended for 12 months at a higher rate in the Autumn Statement. Reducing the taxpayer burden is the right approach, but with fewer fixed-rate tariffs available, those U-turns make it hard for drivers to work out what they’re committing to.

Businesses have had even less to go on and, as that group includes chargepoint operators, their un-capped costs have been passed on through progressively higher tariffs. When Osprey raised its prices to £1/kWh in September, it told customers the lack of details about government support had left them with no alternative. It’s cut its prices since, but this shows how inaction in Westminster can make charging costs as volatile as filling with petrol or diesel.

Worse still, there’s been no safety net. The 8p/mile Advisory Electric Rate was long overdue and, presumably overshadowed by ongoing in-fighting at Westminster, we’ve had agonising delays announcing company car tax bands beyond April 2025. With year-long lead times now increasingly common, drivers had been gambling on almost 18 months of tax bills when ordering cars.

The 1%-point annual increases confirmed in the Autumn Statement are logical, but who could have been sure? EV Benefit-in-Kind has been a rollercoaster, rising from 0% in 2014/15, to 16% in 2019/20, then falling back to 0% in 2020/21. Fleets will also remember the heel-dragging as WLTP was phased in with ‘NEDC Correlated’ CO2 figures – a misnomer that led to large overnight tax hikes for some models. Or perhaps the 3%-point diesel tax levy, which, instead of being scrapped, was raised to 4% with almost no warning. How on earth can you plan for that?

Meanwhile, financial support for EVs is shrinking at equally short notice. There’s no chargepoint grant for homeowners, no Plug-in Car Grant – and no support for people buying a used car either. The SMMT says the used EV market increased 57.1% year-on-year in Q2 2022, reflecting the growth in new registrations in 2019. Given rising interest rates, high transaction prices and the squeeze on household income, schemes like the Scottish Government’s 0% interest loan for used EVs seem worthy of a nationwide roll-out.

Obviously, there’s no reason to believe the tide will turn back in favour of combustion engines. We’re due details of mandatory EV sales targets for manufacturers – and the 2035 end-date for new combustion engines hasn’t changed. However, this transition is still in its early phases and – in an ever-changing world – stability is vital if fleets (and consumers) are to make more sustainable long-term decisions.