Planned changes to company car tax will help ensure an upbeat outlook for fleets in 2020, bringing a “groundswell” of support for EVs while also keeping diesels in the picture.

Fleet Alliance MD Martin Brown said 2020 should be a positive one for the fleet industry, aided by the clarity from government company car tax announcements

So said Fleet Alliance Group as it reported a record year in 2019 and added that it’s quietly confident about the coming 12 months – taking in prospects for the wider fleet industry too.

The group – which comprises Intelligent Car Leasing, Intelligent Van Leasing and Neva Consultants – now manages a fleet valued at £1bn following an increase in its managed fleet from 25,000 vehicles to 37,000 in less than a year, despite a market downturn in terms of new vehicle registrations. It also saw growth in profitability of more than 20% compared to the year before and has now increased its office space in line with continued expansion in the business.

Providing his outlook for the coming 12 months, managing director Martin Brown said that 2020 should be a positive one for the fleet industry and welcomed the clarity brought by last year’s Government announcement on changes to company car tax, which many now expect to be confirmed by the chancellor in the Budget on 11 March, including the zero BiK rate for electric vehicles (EVs) for tax year 2020-21, enabling them to be adopted into law in the Finance Bill.

Brown said: “Providing we get confirmation from the chancellor in the Budget in March, we now have certainty on BiK rates, which allows fleets to forward plan again. The zero BiK rate for EVs should be a shot in the arm for electric vehicle sales, while hybrid vehicles, with the appropriate range, will be tax-busters, too.

“At the same time, the new generation of cleaner RDE2-compliant diesels will not attract the usual 4% diesel surcharge, which underpins our belief that diesel still has a key role to play in the short-to-medium future of fleet mobility,” he continued.

Brown also said that there was now a groundswell of buyers in favour of EVs and hybrids, as demonstrated in full-year 2019 new car registration figures, which show hybrid take-up increased +17.1% while battery electric vehicle registrations were up 144.0%.

He added that improvements in EV supply and pricing would help further increase uptake going forwards.

“There is a currently an imbalance between supply and demand which should ease as the vehicle manufacturers bring forward new ULEV and EV models,” he explained.

“There is also an imbalance between the cost benefit to the driver through lower taxes, and higher costs to the company through higher rentals. But we expect that gap to also close over time as supply increases and prices come down,” he finished.