2024 is now upon us – and some of the UK’s pre-eminent fleet sector specialists give their views on what the next 12 months have in store for car and van operators.

Rising challenges for service delivery and driver shortages

Beverley Wise, Webfleet regional director for Bridgestone Mobility Solutions

The year ahead presents a myriad of exciting opportunities for fleets, but also some complex challenges that will need to be navigated.

As tech developments advance apace, business customers will continue to expect faster and more flexible service delivery. For fleet operators, meeting this demand calls for ever-smarter processes, which must invariably be supported by fleet management software solutions.

Access to real-time and accurate vehicle and driver insights for informed decision-making, dynamic routing and efficient last-mile delivery will be essential.

Digital systems that improve the working lives of drivers, helping them mitigate stress behind the wheel and better manage their workflow will also be important in helping address a commercial driver shortage, acting as a fillip for skills recruitment and retention.

Elsewhere, stricter environmental regulations can be expected to be a significant factor throughout 2024. Understanding and adhering to the regulatory landscape will be crucial to avoiding penalties and maintaining a positive corporate image. Fleets should consider solutions that support them in the accurate reporting of the CO2 emissions caused by their vehicles, in anticipation of disclosure requirements, such as the UK Sustainability Disclosure Standards (UK SDS).

Greater shifts in cost saving, data security and AI for coming year

David Savage, vice president, UK & Ireland, Geotab

This time last year we were quite enthused about the transition to zero emission vehicles, given the UK’s aggressive and world-leading schedule to complete the shift. However, the recent delay to 2035 has arguably put a damper on the industry, with stagnating demand amongst consumers in particular. Assuming there’s no amendment to government policy, companies will be looking to reassess their electrification strategies. In the shadow of this, and broader economic uncertainty, this year will see greater shifts in cost-saving measures across the board as businesses use the pause to assess data-driven tactics in electrification and plan for the future. This is particularly relevant for the telematics space, where organisations will be looking for significant cost savings, especially in vehicle maintenance and lifecycle extension.

On the subject of electrification, there is a call for greater standardisation in charging infrastructure measurements to simplify understanding for consumers and businesses alike. We’re seeing the emergence of this following the Government’s Public Charge Point Regulations, which seek to standardise critical components of the charging experience such as payment, pricing transparency and open data access. 2024 will see this kicking into gear amongst UK charging networks – not only to simplify comprehension for drivers and fleets but also hopefully go some way to compel further interest in electrification. There is a prevailing expectation of eventual consolidation and standardisation, drawing parallels to the evolution of mobile phones across the EU, and we hope to see the fruits of this soon.

We anticipate the conversations around data security and artificial intelligence (AI) will continue to evolve into 2024. Data security, including GDPR compliance, is becoming increasingly important with a continual need for entities to review the data they ingest. The fleet management industry is creating extensive amounts of data which need to be protected and utilised responsibly. So too with AI, the industry is experiencing heightened interest in how it can enhance and optimise the fleet management world. Of course, this is associated with numerous implementation challenges, particularly its integration across various data sources. Beyond insight inference, these larger datasets will begin to be used for additional purposes such as the ‘gamification’ of data to drive employee engagement and positively influence driver behaviour.

2024 to see evolving OEM environment and rising role for fleet data

Rory Mackinnon, sales and marketing director, Holman

The availability of data is greater than ever before, and this trend will only continue in 2024. Customers now need to be able to access that data in a way that allows for actions to be taken to improve the running of their fleet from both an efficiency and cost saving perspective; it’s the role of businesses such as Holman to be able to support this opportunity for our customers.

While the Government has moved out the zero emissions deadline to 2035, there is still a keen focus from customers to drive their fleet sustainability forward. But there is a challenge around infrastructure that will get worse before it gets better, and customers will need a fleet supplier that will be able to support their needs today but with an eye on their future sustainability goals.

Finally, the OEM market in the UK and Europe has been fairly consistent for the last decade, but in 2023 we have seen many new entrants into this space, especially from China. This trend will continue in 2024 and play a bigger part for fleet decision-makers – this is good news for drivers and fleet managers who now have more choice than ever before.

2024 will be the year of the EV

Andy Bruce, CEO of Fleet Alliance

2024 will be the year that companies look to accelerate down the electrification route, as they seek to meet their own ESG agendas and address the environmental concerns of their employees. And they will be helped in achieving these ambitions by lower prices and greater supply of electric vehicles.

The vehicle manufacturers are once again building up stocks of vehicles after several years of shortage of supply, with good levels of many volume models. And, as they are bound by the Government’s target to produce 22% of their product mix as EVs in 2024, this means that EV supply will continue to increase.

As a result, the manufacturers now have to be more realistic about pricing, but reductions in list price, as we saw with Tesla, can distort the market. Discounting is the tried-and-tested route they will go down and already we are seeing some discounts over 30% in certain specific cases.

Another shot in the arm for EV production across Europe was the recent news of the EU and UK deal to extend the rules of origin for batteries for a further three years until 2027. We welcome this initiative as it means stability of parts supply is maintained and the threat of tariffs on EVs has receded for at least another three years.

All these factors combined add up to good news for our customers as they will mean lower rentals on EVs, making them more affordable along with the continued attractiveness of very low Benefit-in-Kind (BiK) tax rates. This continues to make electric cars very attractive from a cost perspective, especially when supplied through salary sacrifice schemes, which open them up to wider numbers of employees in all types of businesses at very advantageous rates.

The degree of pent-up demand currently in the market is also a strong reason for optimism in 2024. We, like many suppliers, are seeing above average levels of contract extensions with a running rate three times that of normal levels.

I liken this pent-up demand to a dam that is currently showing signs of leaking, but which may well see a more general collapse in the coming months, as customers cannot continue to extend their vehicles indefinitely. Salary sacrifice is the route that many will decide to go down.

Finally, we believe that 2024 will bring us all greater political stability and a gradually improving economic backdrop, which I’m sure we would all welcome.

Last-mile delivery transformation in 2024

Nick Guise, group marketing manager at Trakm8

As we enter 2024, the last-mile delivery landscape is witnessing a profound transformation, with AI fleet optimisation solutions at the forefront of innovation. Focused on achieving excellence in last-mile delivery, flexible and scalable algorithms are reshaping how the industry approaches cost management and sustainability.

AI Optimisation solutions address the challenge of escalating fleet costs while meeting the growing consumer demand for sustainable deliveries. Enabling customers to book delivery slots and optimising delivery schedules, these solutions play a crucial role in reducing last-mile delivery failures and ensuring timely customer fulfilment, thereby enhancing the overall online shopping experience.

AI Optimisation technology promises a host of benefits for fleets, including significant reductions in fuel and labour costs, decreased total fleet mileage, the ability to handle increased order volume without requiring additional shifts or vans, and notable improvements in miles per drop. This translates to substantial savings in emissions, fuel expenses, and overall operational costs, making it a transformative solution for efficient and cost-effective fleet management.

Insurance to bring big challenges

Paul Hollick, managing director, Lightfoot

Insurance is going to be a big, and costly, issue for businesses to grapple with in 2024 as a number of factors combine to create rocketing premiums.

With premiums rising by up to 30%, we are hearing from lots of fleets who are struggling to keep a lid on insurance costs, even if they have excellent safety records.

Inflationary pressures, a lack of parts and a shortage of technicians are the key drivers behind the price rises, but there are other factors at play too – it only takes one electric vehicle to be written off, or a new battery pack required, to put a fleet’s policy into the red.

Gone are the days where you could demonstrate that your fleet risk is reducing and therefore expect a reduction in your premium. The best that you can hope for is that your increases are smaller.

What customers are saying is that it’s becoming more and more important to be able to put together a package of convincing measures that prove to the underwriter that your fleet risk is reducing; be that through installing lights or dash cameras or demonstrating what you are doing with that data to manage your risk.

Action needed on EV sector myths and political landscape

Chris Pateman-Jones, CEO of Connected Kerb

The move from early EV adoption to mass market has seen misinformation reach new heights. Underpinned by today’s 24-hour news cycle, misinformation spreads far and wide in no time.

There is a real need for the industry to unite to tackle mistruths and bring clarity to consumers. Otherwise, we’ll witness a sea of confusion amongst new and prospective EV drivers, which will inevitably have a negative impact on uptake.

Uniting the industry will therefore be key for 2024. The new industry body, ChargeUK, has already laid the groundwork for a stronger, more collaborative EV industry, whilst bringing together government and other key stakeholders to accelerate overcome key challenges and drive forward the EV transition at the pace and scale required to reach net zero.

A supportive political environment for EVs in 2024 will also be vital to transform the UK’s transport system at the pace and scale science demands. The electric vehicle transition has become a frontline political issue over the past year – from pushing back the phase out of new petrol and diesel cars to 2035, to the likes of ULEZ.

But political controversy doesn’t change the facts – the EV transition is well underway and accelerating at pace. EV sales have continued to soar month on month, and the ZEV mandate, which came into place this month, will see car manufacturers sell an increasing number of EVs every year. So, charge point operators, such us at Connected Kerb, need to remain laser-focused on providing the reliable, affordable, and convenient charging infrastructure that’ll make 2024 the best year yet for EV drivers across the UK.

Innovations in fleet management to support net zero goals

Aliaksandr Kuushynau, head of Wialon division with fleet software developer Gurtam

We are seeing an emerging trend towards the integration of OEM (original equipment manufacturer) telematics and aftermarket telematics systems. Historically, these systems have functioned on separate platforms, leading to fragmentation in the way vehicle data is collected, analysed and utilised. By bringing all data together onto unified platforms, such as Wialon, the industry can leverage a more holistic view of vehicle performance, driver behaviour and operational efficiency.

Deeper integration of EV data into fleet management platforms is a significant step towards decarbonisation and net zero goals. The evolution of fleet management platforms to support the electrification of fleets is a critical development, as it not only aids in reducing carbon emissions but also supports organisations in achieving their environmental goals in a practical and effective manner.

Rise of driver-friendly technologies: The integration of driver-friendly AI and Advanced Driver Assistance Systems (ADAS), along with video telematics, reduces the cognitive load on drivers, with features like traffic updates, route optimisation and voice-activated controls becoming essential. Familiarising drivers now with these technologies will likely lead to a smoother transition to more automated systems in the future.

Introduction of AI technologies to multiple processes of fleet management, such as route planning, predictive maintenance or fleet safety management, as well as decision-making. AI can process vast amounts of data to provide fleet managers with actionable insights, helping them make informed decisions on vehicle utilisation, cost analysis and compliance with environmental and safety regulations. Furthermore, AI is instrumental in managing the complexities of modern fleets, especially as they transition to include electric and autonomous vehicles.

A call for a realistic approach to EV fleet adoption

Adam Hall, energy services director at Drax Electric Vehicles

While 2023 was a positive year for the EV industry, 2024 will be somewhat more challenging.

The tough financial climate last year has meant that many fleet-operating businesses, which have long been the driving force behind the nation’s transition to electric, have had to cut back on larger-scale sustainability projects. This isn’t to say that they’re any less determined to make a real difference towards net zero; it just means that they’ll need to recover from the financial hits of the past few years before committing to high-investment projects.

However, as we saw during the pandemic, the EV industry is extremely resilient to economic ups and downs. As such, we should fully expect more major milestones over the next 12 months, particularly as we see the rollout of lower-cost models.

Fleet cost efficiencies remain paramount

Alfonso Martinez, UK managing director at ALD Automotive | LeasePlan (soon to be Ayvens)

For 2024, the focus remains on driving cost efficiencies and reducing total fleet costs. At ALD Automotive | LeasePlan, we are exploring multi-cycle asset management with second/third-life leasing opportunities, subscription models and flexible leasing solutions to meet the needs of cost-conscious customers seeking mobility solutions.

The EV landscape is gearing up to be an exciting one as the industry advances consumer and commercial mobility. EV adoption will continue to grow with improvements to charging infrastructure and investments, alongside the ZEV mandate, which stands to double the market share of electric vans this year. We also expect the prices of EVs to fall in the European market, signalling positive news for drivers and fleets as battery costs start to decrease.

The digitalisation of the driver journey is also on the rise, with increased customer demand for convenience and a seamless end-to-end solution. While advanced telematics data will continue to enhance driver safety, help fleet managers streamline operations, and improve costs. Those transitioning to electric fleets will have a helping hand from telematics to optimise their drivers’ routes, aligning with available charge points and the best routes to travel.

Despite uncertainties, including a potential general election, the fleet sector must remain alert. Working with reliable and trustworthy leasing partners will be paramount to a stable year where fleet managers and businesses can continue down the road to electrification. We’re confident that we’ll see a sustained effort towards net zero, and we will be here to support our customers throughout that journey.

EVs to become more accessible in 2024

Andrew Leech, founder and managing director of Fleet Evolution

2024 will see EVs becoming more accessible to a wider audience with a market-defining benchmark likely to be breached for the first time.

Citroen will launch the e-C3 supermini in the spring with a list price of around £22,000 and a range of 199 miles, billing it as “the first European affordable electric car”. This will make owning or driving an EV more widely accessible because, in salary sacrifice terms, the e-C3 will probably cost around £250 net with an all-inclusive package and no deposit. This will open up the market to a new range of buyers or lessors and go a long way to dispelling the myth that EVs are expensive and only for the well-off.

Supply of EVs in general continues to improve all the time as manufacturers, especially the Chinese, launch new models and stocks of available models builds up. We are now looking at lead times of just three months, compared to 12-18 months during the global semi-conductor shortage, and manufactures are offering increasing support, typically in the region of 8-10%. However, we are seeing some models from premium brands attracting discounts as high as 30%.

This year is also likely to bring a continued increase in the national network of fast chargers. The latest figures from ZapMap show the infrastructure is growing all the time and will give greater reassurance to those buyers who are contemplating making the switch to electric but are worried about access to sufficient chargers.

At Fleet Evolution, we would also like to see 2024 as the year when the Government gives its wholehearted support to what we view as the Second Industrial Revolution and the move to electric motion.

That means greater investment in renewables such as wind and solar, a greater commitment to expanding the charging network still further, especially in urban areas, and in technology such as lamp-post charging.

And we’d like to see increasing numbers of apprentice schemes offered to young people to encourage them to work in this exciting new industrial landscape.

Connected vehicles and V2V tech to reshape auto landscape

Philip Carl, global head of automotive at Endava

In 2024 we can expect to see a surge in connected vehicle investment, with the market poised for remarkable growth.

Auto manufacturers are set to explore cutting-edge technologies such as 5G and AI to enable more convenient and intelligent driving experiences. Personalised driver experiences will become a competitive necessity for meeting shifting market demands over the coming year as over half of customers are now willing to switch car brands for better connectivity, according to McKinsey.

As a result, technologies such as AI will drive new in-vehicle experiences. This includes real-time traffic updates and AI-powered tools like voice-activated productivity assistants, for example. Parking assistance will see advancements, too, offering real-time directions to available spaces and EV charging points, along with seamless parking payments.

This year, the automotive landscape will witness a profound transformation as these technologies converge, solidifying connected cars as not just remarkable but essential for a smarter and more personalised driving future.

The surge in vehicle-to-vehicle communication (V2V) solutions, capitalising on highly secure, low-latency network connectivity, is set to reshape the automotive landscape in 2024. The V2V communication market is expected to grow to $37.19bn in 2027.

Particularly pertinent in the realm of autonomous vehicles, technologies such as 5G or dedicated short-range communications (DSRC) are facilitating comprehensive information exchange among entire fleets of equipped vehicles. This exchange includes critical data about road conditions, traffic updates, and potential hazards, thereby fostering enhanced safety measures and optimising traffic flow. The capacity of V2V to redirect vehicles to less congested routes promises to contribute to smoother and more efficient transportation networks, too.

Beyond safety, V2V holds the potential to revolutionise fleet navigation services by facilitating real-time information sharing among vehicles, enhancing reliability and contextual relevance. For instance, a connected vehicle identifying an imminent hazard can autonomously transmit warnings to others on the same route, prompting timely and appropriate responses. Additionally, the integration of AI in compatible vehicles augments the V2V experience, allowing for real-time recommendations on speed and trajectory adjustments to ensure passenger and cargo safety.

In the evolving landscape of smart mobility, V2V communication emerges as a pivotal force, driving not only safety improvements but also efficiency and collaborative navigation.

Decarbonisation plans to accelerate in 2024

Damian Penney, vice president EMEA at Lytx

COP28 saw a landmark moment as nearly 200 nations agreed to transition away from fossil fuels. While the fleet industry has certainly placed a greater emphasis on lowering emissions, global environmental pressures and commercial implications for businesses mean we can expect to see decarbonisation plans accelerate in 2024.

The first solution that springs to mind for many is to switch to greener sources of fuel. This offers great potential in the long-term, but the majority of these solutions are not yet ready for mass adoption by commercial fleets.

Fleets are likely to see more of an impact if they focus their efforts on incremental efficiencies, which offer a faster, less disruptive and more cost-effective route to lowering emissions. There are several ways to achieve this efficiency-led approach – including through optimised route planning, regular vehicle maintenance, driver training and incident reduction.

Naturally, drivers and fleet managers require the tools and technology to unlock these efficiency gains. Video telematics platforms and intelligent dash cams, which are equipped with machine vision and artificial intelligence, stand at the forefront of incident prevention and driver training, as well as data collation and interpretation. As such, these technologies have a pivotal role to play in enabling the commercial fleet industry to reach its sustainability goals.

Fleets investing in technology and IoT platforms to lead way in EV switch

Philip van der Wilt, SVP and GM EMEA of Samsara

Physical operations will continue to be challenged by the uncertainty surrounding fleet electrification and the need to double down on fuel efficiency.

Businesses are waking up to the fact that it’s not petrol, diesel or electricity that powers fleets – it’s data.

Those who have already invested in technology and IoT platforms to manage their fleets are already better off. Fleets that have already invested in connected data platforms are better able to identify which routes, vehicles, and tasks are best suited to the electrification of their fleets.

They’re also using these same fuel-agnostic systems to identify other technologies that will lead to fleet decarbonisation.

It’s now up to the rest of the industry to play catch-up or risk being hit with a double whammy – falling behind on electrification plans while being unable to manage sprawling fuel costs.

EV availability to improve as prices fall

Jordan Brompton, co-founder and CMO of Myenergi

While it’s fair to say that limited supply has proven somewhat of an unexpected barrier to adoption in the UK’s transition to electrification, supply chain pressures experienced over the past few years are finally beginning to ease. As a result, OEMs are catching up on production deficits fast, with finished vehicles now rolling off production lines at record rates.

As we head into 2024, we’ll likely see three things happen quite quickly. Firstly, EV availability will rapidly improve. Compared to the long lead times experienced over the past 18 months, in particular for the luxury end of the market, waiting lists will shrink and lead times will fall accordingly. With a number of new brands looking to penetrate the UK market, this will put pressure on the legacy OEMs.

Secondly, with supply beginning to match demand, production efficiencies will continue to increase and prices will resultingly fall – bringing EVs far more in line with ICE-powered cars from a purchase price perspective – a major positive for the consumer, as well as the wider transition to electrification. We’ve already started to see this across the leasing industry, with many electric models now almost at price parity with their petrol or diesel counterparts.

Finally, as the transition to electrification continues to accelerate, we’ll see vehicle manufacturers further increase their spend on EV R&D and cut investment into ICE models almost entirely. This will most likely be the final nail in the coffin for traditionally fuelled vehicles, with consumers unwilling to purchase dated technology.

These scenarios, alongside continued national investment into the public charging network, will see barriers to adoption crumble and registrations soar. This is positive news all round.

New approaches to driver training

Greg Ford, head of corporate, RED Corporate Driver Training

With rocketing insurance premiums, we’re expecting more fleets to look into systematic ways of reducing their driver risk liability – but businesses need to ensure it’s not just a box-ticking exercise. The potential solutions, such as our SafetyFirst system, need to be targeted correctly to achieve the best outcomes.

We also believe that 2024 will have less of an EV focus than previous years – with demand dropping and the ICE ban delayed until 2035, we expect more businesses to be investing in ways of making their existing ICE fleet as efficient as possible through courses such as Fuelsave.

Grey fleet remains a growing issue of concern, with more businesses reducing their company car offering and moving to a cash for car solution. Companies must recognise that they still have an obligation to ensure roadworthiness and driver competency even if an employee is driving their own vehicles.

Finally, we’re hoping for less public sector service disruption to allow our sector to clear the backlog of professional driving tests.

New car market to be driven by return to incentives

Ian Plummer, commercial director at Auto Trader

The new car market is set to return to a ‘push’ model in 2024, as manufacturers face a challenging combination of slowing retail sales, new regulatory targets, and increased competition from new entrants.

As a result, significant discounting and finance offers to stimulate consumer demand – particularly for electric models – will continue this year, fuelling a predicted 4% growth in new car sales: from an estimated 1.89 million in 2023, to circa 1.97 million in 2024.

The strict ZEV Mandate will require 22% of all brand sales to be zero emission or face a fine of £15,000 for every non-compliant vehicle sold. However, the current average share of EV sales across brands is just circa 16%, and for some, it’s as low as 3%. The recent softening in retail EV sales, which as of November were down 29% versus 2019 and accounted for only 1 in 10 of all retail sales, further underlines the need for more offers to stimulate demand in the market this year.

Used car demand robust but growth hampered by supply pressure; Auto Trader predicts market to rise from estimated 7.17 million sales to 7.24 million in 2024.

Supply shortfall and robust demand sees stabilising in headline used car values.

Over £32m in profits being lost due to unnecessary price adjustments.

The used car market will increase in 2024, fuelled by robust and resilient demand. Despite the economic strain on UK consumers – inflation, interest rates and, potentially, a general election – we predict robust used car demand will continue in 2024 and result in a small market uplift. We forecast transactions will increase to an estimated 7.24 million sales, up from the 7.17 million we forecast for last year.

Optimism for global electric vehicle sector

Charlie Jardine, CEO of EO Charging

The EV market is poised for a surge in momentum in 2024, driven by falling costs, technological advancements, and robust government support globally.

Consumers, businesses and the public sector are switching to EVs in ever-more significant numbers, with 14 million EVs expected to be sold globally in 2023. This represents a 35% year-on-year increase despite ongoing concerns about the scale and quality of public charging infrastructure.

The United States will strengthen its position as a global frontrunner in accelerating EV adoption, surpassing European counterparts in government-led investment.

In the UK, industry commitment to net zero progress will continue, despite government delays, with energy companies launching free EV charging schemes to try and help maintain momentum. With the impending general election in 2024, we can expect a robust debate on greener transport policies, hopefully making the case for accelerating support for electric adoption even stronger for future governments.

The year ahead will also increasingly highlight the role of energy management solutions in helping to meet surging EV demand. Load management and battery storage innovations are poised to take centre stage. It’s becoming clear that open standards are now critical for effective infrastructure. As we navigate through 2024, collaboration through open-source standards will be pivotal in propelling the EV industry forward, promising a future of simplicity, reliability and accessibility.