Discounts are starting to appear on new electric vehicles (EVs) for really the first time since they entered the mass market, delegates were told at the Association of Fleet Professionals (AFP)’s 2023 Conference.
Recent price cutting by Tesla and the arrival of new manufacturers from China were both helping to create a more competitive environment, alongside a gradual ramping up of production volumes following the pandemic.
Mike Potter, CEO, Drive Electric, told the conference: “It’s really a sign that EVs are becoming a normal part of the fleet market as well as the sector seeing a return to something a little closer to traditional market conditions. We’re not talking about massive discounts but the time when all EVs were sold at list price appears to have passed, at least for the time being.
“The moves made by Tesla appeared to us to be designed to try to prompt some kind of price realignment in the EV market and, to some extent, that has worked – although it has arguably had negative effects in terms of setting future residual values. Certainly, others have had to look at their own sales to fleets and whether incentives needed to be introduced.
“New entrants from China have also been a factor. MG is now really established as a standard fleet choice at the entry level EV end of the market and the arrival of others such as BYD could have a similar impact in the mid-market. Their product appears to be strong enough to challenge existing players and if availability is good, they could mount a serious challenge.”
Some fleet managers in the audience reported that lead times on EVs were starting to fall, sometimes substantially – although this could create its own problems.
Peter Milchard, AFP board member, said: “It was interesting during our panel discussion to hear that some fleets, who are sensibly placing EV orders 12-18 months ahead of when they actually need the vehicles based on recent supply experiences, are now seeing some of those orders arriving in 6-9 months.
“On one hand, it’s good news, because it suggests that lead times are returning to sensible levels in some instances but it does mean that their orders are arriving a year earlier than they really need them, which can obviously be an issue in itself.”
The conference also debated the advantages of solus versus panel funding for fleets.
Steve Winter of Appleridge Fleet Consultancy said: “You can easily find differences of between £30-£100 per month on the same vehicle depending on the leasing company. These are not normally a sign of anything other than the appetite of that business for leasing you a certain kind of model of vehicle but does show the importance of benchmarking when it comes to vehicle acquisition. Fleets should consider having a panel of lenders is the right solution.”
The AFP conference took place at The British Motor Museum, Gaydon. Sponsored by Mina, it focused on practical advice for fleets facing a range of current issues. Sessions took the form of panel discussions with leading fleet managers chaired by AFP board members. These covered topics including handling supply matters, dealing with the rising costs of leasing and rental, managing an aged fleet, reimbursing drivers of electric vehicles, and optimising van fleets while gearing up for electrification.
AFP chair Paul Hollick said: “The ongoing impact of everything from the pandemic to the current economic crisis means fleet managers are facing a multitude of difficult issues for which there are often no easy answers such as rising costs across the board, ongoing supply difficulties, electrification of van operations and the ageing of their existing fleets.
“We wanted delegates to leave with ideas they can put straight into action – and the feedback that we are receiving suggests that the conference very much achieved that aim.”
Falling electric vehicle (EV) residual values (RV) are “problematic” for fleets and action needs to be taken to improve their prospects in the used car market, says the Association of Fleet Professionals (AFP).
Paul Hollick, chair, said that RV reductions of 10-20% had not been uncommon over the last 12 months for some of the most popular fleet EVs and that the trend had clear repercussions.
“Until perhaps a year ago, it was possible to make a convincing financial case for EVs at board level. Yes, they were expensive to buy new but residual values were remarkably strong and charging was cheap. Now the second and third parts of that argument have started to fall away.
“Of course, fleets are still going to want to continue the process of electrification thanks to benefit in kind advantages for drivers, the 2030 deadline edging closer and for environmental reasons. However, as AFP members continually testify, being able to back all of this up with a sound financial argument has always made the process much easier.”
Paul said that the question facing fleets and the wider motor industry now was what could be done to help strengthen RVs and reduce the cost of power?
“The latter problem is potentially the easiest to resolve. Fleets that concentrate on home charging are still benefitting from lower costs and over the next year or so, we can expect to see electricity prices fall to a level that, if not comparable to before the war in Ukraine, will be at least much more competitive than today.
“However, addressing the used EV market is going to be more of a challenge. How do we change the perceptions of used car and van buyers, convincing more of them that these vehicles are desirable? It seems to us that doing so centres around making EVs more affordable while ensuring that consumers view them as practical propositions on a day-to-day basis.
“The affordability question is a tricky one. In some other countries, of course, there are government subsidies aimed at the used EV market, ranging from low cost loans to lump sums, and these have proven effective. It would be good to see similar moves here. However, it is the practicality issue that we feel probably needs greater attention. The UK simply doesn’t have enough chargers of the right types in the right places, and despite infrastructure growth, it’s not clear that this will change at any point soon.
“It’s not just pictures of queues for chargers in the news that make this situation apparent to used car buyers but many people have come back from Easter breaks in France and Germany, and noted how much more advanced and useable their networks appear to be.”
Paul said that the AFP welcomed the formation of ChargeUK, the new industry body for charging providers, and hoped it would be able to work closely with government.
“It has appeared to us for some time that a much stronger sense of direction is needed than is currently being seen when it comes to charging. We have been arguing for the creation of a charging czar for some time and, if that isn’t going to happen, an industry body working alongside government is probably the next best solution. Without visibly viable public infrastructure in place, used EV buyers are being asked to take a chance on simply being able to charge their vehicles out on the road, which is simply unreasonable.”
Paul added that many of these issues were likely to resolve over time but were proving unreasonably problematic in the meantime.
“Ultimately, it is probable that power will become cheaper, the charging infrastructure will improve, mass production will help to bring down the price of new EVs, and used prices will therefore fall to a level that is closer to traditional ICE options. However, it does feel as though there is limited recognition at a government level that taking greater control over the process of electrification in the short term could make EV adoption much easier for fleets and used car buyers.”
Service, maintenance and repair (SMR) issues mean that fleets are facing excessive vehicle off-road (VOR) time, the Association of Fleet Professionals (AFP) is reporting.
Paul Hollick, chair, said AFP members buying SMR were regularly reporting a range of problems. Some of these, such as parts supply, were felt to be outside the control of suppliers – but others, including levels of communication, were more disappointing.
“Garages and workshops – from small independents to franchise dealers and repairer networks to fast-fits – are facing similar problems to almost every other part of the motor industry. Getting hold of many parts is difficult while finding trained staff is challenging. These facts are having a direct impact on fleet VOR times and are not the fault of suppliers.
“However, other aspects of dealing with SMR at the moment are more frustrating. Simply getting the attention of suppliers to book in work and resolve any issues that are being encountered can be difficult, especially when it comes to manufacturer warranty work.
“A key annoyance is that if vehicles are booked in for a number of SMR jobs, they are often being handed back with just the easier ones resolved and excuses made for anything more complex, along with advice to make a new booking and no dates available in the near future. There is a feeling within the AFP that often a real intention to tackle bigger jobs is limited.”
Paul said that the problem was especially acute because so many fleets had been forced by new vehicle supply issues into operating often significantly older cars and vans.
“On older vehicles, it is almost unavoidable that more SMR is needed and often bigger jobs, too. This means that fleets are now very much reliant on garages and workshops on a day to day basis when it comes to minimising VOR. Being able to count on them doing what they say they will do is essentially an operational necessity.
“At the AFP, we recognise that, to an extent, SMR suppliers are often firefighting in the face of demand and are placed in a difficult situation when it comes to meeting fleet customer needs. However, more straightforward conversations and a more reliable approach would certainly be much appreciated by our members, we feel. What they find frustrating are situations when they are left without a vehicle that they were expecting to be repaired and have to scrabble around to find a replacement. It creates difficult situations.”
PLACES FULL FOR AFP 2023 CONFERENCE WITH THREE WEEKS STILL TO GO
With three weeks still to go, all places are now full for the Association of Fleet Professionals’ (AFP) 2023 annual conference,
In total, 300 AFP members have signed up for the event, which takes place at The British Motor Museum, Gaydon, on Wednesday 17th May, and will focus on practical advice for fleets facing a range of current issues.
Sessions will be chaired by AFP board members and cover subjects including managing supply matters, dealing with the rising costs of leasing and rental, managing an aged fleet, reimbursing drivers of electric vehicles, and optimising van fleets while gearing up for electrification. There will also be a live training exercise involving everyone at the conference on Engaging stakeholders with future fleet policy.
Paul Hollick, chair at the AFP, said: “While this is just the second AFP annual conference, it already feels like a well-established part of the fleet calendar and the number of members who have signed up to attend is a firm confirmation of its value and importance.
“We’re still receiving requests all the time for places, so have opened a waiting list, which can be accessed online but, to all intents and purposes, the event is already full with three weeks yet to go.”
Paul said that the approach adopted for the conference had been chosen based on an need expressed by many fleet managers to access practical guidance that would have a direct impact on immediate, day-to-day issues.
“In recent years, much attention has been given by the fleet sector to big, strategic subjects such as electrification. These are obviously very important but many AFP members today are instead mainly looking for advice and assistance on how to deal with a whole series of current, practical challenges.
“The ongoing impacts of everything from the pandemic to the current economic crisis means fleet managers are today facing a multitude of difficult issues for which there are often no easy answers such as rising costs across the board, ongoing supply difficulties, and the ageing of their existing cars and vans.
“At next month’s conference, we’ll be tackling as many of these subjects as possible, with a focus on pragmatic solutions that have been proven to work, explained by leading fleet managers and industry experts from across our sector. We want delegates to leave with ideas they can put straight into action.”
The headline sponsor for the AFP conference is Mina and Ashley Tate, CEO, said: “The sense of collaboration and desire for electrification was so strong at last year’s conference that there was no question that we wanted to be involved again this year.”
AFP members can register for the conference waiting list at https://www.theafp.co.uk/conference-2023/.
A new electric vehicle (EV) mileage cost calculator has been created by the Association of Fleet Professionals (AFP) to help with accurate reimbursement of company car drivers.
It shows potential pence per mile costs for more than 70 models, comparing a variety of home and public charging tariffs in a variety of weather conditions against the current nine pence per mile Advisory Electricity Rate (AER) rate from Her Majesty’s Revenue and Customs (HMRC).
Paul Hollick, chair at the AFP, said: “This answers a very real need from fleets for information about real world EV charging cost performance, given the variance that exists between what is being paid for electricity and how efficiency changes at different temperatures.
“We expect members to choose to use the information in several ways. The first is simply to look at the mileage costs of different EVs and use the figures to inform future decision making, especially which models should be included on choice lists.
“Secondly, it should also support arguments to encourage more home charging and less use of public facilities, showing just how much this impacts on costs on a per vehicle basis.
“Finally, and perhaps most importantly, it will help to enable more accurate reimbursement of drivers for charging. While the increased nine pence per mile AER rate is an improvement, the calculator does show conclusively how it easy it is for this figure to be exceeded in any number of circumstances. We already have several AFP members who are paying substantially more that AER in order to reimburse employees fairly.”
The calculator has been created by AFP member David Watts of Volkswagen Financial Services | Fleet and plans are underway to make the data it produces widely available across the membership body.
Paul said: “This is a good example of how the huge expertise that is available within the AFP can help to create new and innovative tools that immediately help to improve fleet management best practice.”
David Watts, Fleet Product Manager at VWFS Fleet said “Having been instrumental in raising the issue of the Advisory Electricity Rate (AER) and its appropriateness from a fleet perspective, back in 2020 (when it was £0.04), it was good to explore this further with the AFP.
The exercise demonstrated the significant variance in energy consumption across the EV range, coupled with the huge variance in energy costs, depending where and when you charge up – from home and off-peak, all the way through to ultra-rapid charging – together with seasonal variations. This insight was then compared with the HMRC’s AER business mileage reimbursement to develop a more effective tool to support accurate EV charging reimbursements.
Importantly, the new tool will enable fleet managers to more accurately calculate fleet charging costs, ensuring reimbursement strategies are fair for drivers, incentivising the switch to EVs in line with the government’s wider sustainability agenda.”
Fleets are starting to take the efficiency of different electric vehicles (EVs) seriously thanks to increases in the cost of charging, says the Association of Fleet Professionals (AFP).
Paul Hollick, chair at the AFP, said the gaps between the most and least efficient EVs were striking, and that fleet managers were increasingly swapping information on which were delivering the best figures in real world conditions.
“When EVs started arriving on fleets, fuelling them cost just a fraction of a petrol or diesel vehicle, so there was relatively little attention paid to which had the best miles per kWh figures. However, the price rises seen in the last year or so, with some on-the-go charging costing as much as refuelling an ICE car or van, means that is no longer the case.
“Increasingly, fleets are taking a lot of notice about which EVs are the most efficient, They are spending time analysing which fall within reasonable parameters and which don’t in exactly the same way as they have done with ICE cars for many years. That means working out whether the problem lies with the vehicle, the route or the driver – and taking appropriate managerial action.”
Paul said that fleets were even starting to remove EVs with the worst figures from choice lists and sometimes incentivising drivers to choose the most efficient options.
“It’s widely reported that some widely-used EVs are struggling around the two miles per kWh mark while competing cars can deliver almost twice that figure. These are significant differences that, with current electricity pricing, can have a genuine effect on running costs.
“Certainly, some manufacturers are starting to get reputations for EV efficiency while others are seen as the opposite, and choice lists are being modified accordingly.
“Of course, efficient EVs also make AER repayments more realistic, with the new nine pence per mile rate much closer to the amount being paid by drivers of more efficient EVs who charge at home.”
A new training course launched by the Association of Fleet Professionals (AFP) aims to make women’s voices heard in the fleet industry.
Launched today, on International Women’s Day, the new course is called “Accelerate – Women’s Voice in Fleet” and will give delegates the tools to speak confidently and clearly in public, whether in a meeting, one to one, at a conference or taking part in a webinar.
AFP Board Member Lorna McAtear said: “We have many talented and otherwise confident women within the AFP and the fleet sector in general who, we have found, are not keen on public speaking. This came to light last year when we were planning our 2022 conference and invited several women to speak but found that many were reluctant to do so.
“Women’s voices are under-represented at fleet events in general and we want to help encourage women to share their knowledge, experience and ideas publicly because we believe strongly that the industry would all benefit from hearing and learning from them.
“We’d like to help change this situation and the course aims to provide women in fleet with the tools to step forward and be confident about expressing their views whether in a team meeting, board meeting or more publicly. If possible, we’d like some of the people who take part to become participants in panels for our AFP Conference, which is taking place in May.”
The course lasts two days and is being held on 19-20th April at The British Motor Museum, Gaydon. Modules cover subjects including confidence, courage, clarity and content.
Lorna said: “We appreciate that stepping outside of your comfort zone requires bravery and the course is designed to create a supportive environment. We want all women fleet professionals to be able to make their voice and views heard, sharing with them a toolkit that makes public speaking a skill that can be learnt, honed and repeated.”
Course details can be found at https://www.theafp.co.uk/product/accelerate-womens-voices-in-fleet-19th-20th-april-2023/.
A revised Tax and Regulation Manifesto is being launched today by the Association of Fleet Professionals (AFP) ahead of the Spring Budget on March 15.
The first edition of the document was created almost two years ago and the new version has been expanded from 13 to 21 points. Key items added include greater support for electric vans, the introduction of a chargepoint regulator, alignment of public charging VAT with home charging at 5%, tax breaks for hydrogen use and the support of community charging projects to encourage local charger installation.
Paul Hollick, AFP chair, said: “As a campaigning industry body, the Tax and Regulation Manifesto represents the AFP’s core thinking. It is designed to focus on practical ideas, ranging from quite small detail alterations to major strategic shifts, around which we believe that change or definition is required to enable businesses to move forward with their fleet and mobility plans faster and more effectively.
“Our 2021 Tax Manifesto was successful in that our number one request – to provide more information about future benefit-in-kind taxation – was achieved last year almost exactly in line with our thinking. We believe this very much shows that the government is listening to the fleet sector and we are hopeful that some of the ideas that we suggest here will ultimately be adopted.”
Paul said that the manifesto was the result of several months of work by the AFP’s Future Mobility Steering Committee.
“We’ve been having wide-ranging discussions with our members and other interested parties about developing our original ideas in areas where we believe that the taxation of fleets and mobility needs changing or developing in order to create effective incentives, greater certainty and more fairness.
“Of the 21 points we suggest, several could be implemented quite easily, almost at the stroke of a pen. Others, such as the need for discussions around a road tolling plan, are very much strategic and part of longer-term shifts in policy.
“The results, which we believe are constructive, realistic and thought-provoking, are contained in this document. We’re releasing the manifesto now, just ahead of the Spring Budget, because this is when discussion around policy and fiscal measures affecting fleets are at their peak. We want the document to spark as much discussion as possible.”
The manifesto can be downloaded at Tax Manifesto 2023 (theafp.co.uk) and its 21 points are:
Paul continued: “Most of these points are directly related to the changing shape of the fleet and mobility sectors, specifically the practical issues that we are encountering when it comes to car and van electrification. While we appreciate that the government has achieved much in this area, there remains a lot more to be done, especially when it comes to light commercial electric vehicles.
“What we hope to see now is that the manifesto will be considered by the fleet and mobility sectors and to hear the reaction from all parties who have an interest. It is by no means a fixed document and we are very much open to further ideas and refinements.”
View the manifesto here – Tax Manifesto 2023 (theafp.co.uk)
Practical advice for fleets facing a range of current issues is the focus of this year’s annual conference from the Association of Fleet Professionals (AFP).
Taking place at The British Motor Museum, Gaydon, on Wednesday 17th May, sessions will cover subjects including managing supply matters, dealing with the rising costs of leasing and rental, managing an aged fleet, reimbursing drivers of electric vehicles, and optimising van fleets while gearing up for electrification. There will also be a live training exercise involving everyone at the conference that will explore fleet policy for the future.
Paul Hollick, chair at the AFP, said: “In recent years, much attention has been given by the fleet sector to big, strategic subjects such as electrification. These are obviously very important but, on a day-to-day level, many AFP members in 2023 are looking for advice and assistance on how to deal with a whole series of everyday challenges.
“The ongoing impacts of everything from the pandemic to the current economic crisis means fleet managers are today facing a multitude of difficult issues for which there are often no easy answers such as rising costs across the board, ongoing supply difficulties, and the ageing of their existing cars and vans.
“The purpose of our annual conference is to tackle several of these subjects, with a focus on practical solutions that have been proven to work, explained by leading fleet managers and industry experts from across our sector. We want delegates to leave with ideas they can put straight into action.”
Paul said that last year’s AFP conference, the organisation’s first, had been a major success with more than 250 members attending.
“While this is just the second time we have held the conference, it feels to us as though it is already well-established on the fleet calendar, thanks to the enthusiastic response we received last year. We are delighted to announce that Mina are headline sponsor for the conference and we will finalise the agenda and announce our list of speakers shortly. We’re very much looking forward to the event.”
Ashley Tate, CEO at Mina said: “We are delighted to be AFP headline sponsors for the second year running. The sense of collaboration and desire for electrification was so strong at last year’s conference that there was no question that we wanted to be involved again this year.”
Registration for the conference, which is open to all AFP members, is now open and can be found at Conference 2023 – AFP (theafp.co.uk)/.
Telematics is proving “almost essential” to the adoption of electric vans and job-need electric cars, says the Association of Fleet Professionals.
Stewart Lightbody, vice chair at the industry body, explained the technology was important when it came to resolving two major points – when, where and for how long these cars and light commercial vehicles were charged, and calculating actual amounts where employers were reimbursing employees for charging costs incurred.
He said: “We now have a number of major fleets with more than a thousand electric vehicles (EVs), so there is quite a formidable bank of experience available within the AFP. A key message we are receiving from these members is that in the majority of job-need cases, telematics is proving almost essential to a smooth electrification process.
“It’s a key element in ensuring that the best option is employed at the best time in terms of convenience and range with the aim of minimising charging downtime. For example, many electric van operators are timing charging to coincide with driver’s breaks, using telematics to confirm that employees are rapid charging to 80% and not lingering to trickle charge to 100%. This is seen as the most productive balance of work availability against charging time.
“Others are trying to minimise use of rapid charging, especially on motorways, because low operating costs are an essential part of their electrification objectives. There is generally a wide gap between the cheapest available power – which is usually at home – and the most expensive – normally the fastest commercial charging on motorways.
“Additionally, in cases where there is limited charging provision – such as in remote areas – the technology means that work can be planned around the few facilities that are available, making EVs practicable in places where there might otherwise be difficulties.
“In all of these instances, the use of telematics makes planning and monitoring much easier, showing the location and type of chargers in relation to the vehicle route and allowing charging strategies to be implemented effectively.”
Stewart added that there was also an important role for telematics in tracking vehicle mileage for fleets that used an actual cost method for charging reimbursement.
“While the 8p AER rate introduced last year was much more acceptable for many employers, there remain a relatively large number who recognise that this is not going to meet the costs that some drivers are racking up driving an EV, especially in vans and larger cars. Telematics means that actual costs can be calculated with greater ease, making this kind of reimbursement a more practical proposition.”
AFP members were swapping ideas and observations on EV management on an almost daily basis, he said, sharing their experiences and solutions.
“Electrification is providing a whole series of new opportunities and challenges for fleets and this thinking around telematics is only one fragment of the overall picture. An important advantage of being part of the AFP is the ability to network and access best practice, and this is something that is proving especially important for EV operators at the moment.”