Arval: Our survey says...

Date: Tuesday, June 13, 2023   |   Author: Sean Keywood

Leasing company Arval’s major annual survey reveals some hesitation around EVs, but positivity regarding van fleet numbers overall.

The number of LCV fleets considering switching to battery EVs in the near future has seen a slight fall in the past year.

That’s among the findings from leasing company Arval’s Mobility Observatory Barometer 2023 – a major annual survey of fleet decision makers.

The survey, which sampled 300 UK fleets, found that the percentage of fleets either already using a battery electric van, or considering using one in the next three years, was 46% – down from 47% in last year’s research, although when only fleets who have already adopted the vehicles were counted, the percentage had increased from 9% to 11%.

Even so, when What Van? asked head of the Arval Mobility Observatory in the UK, Shaun Sadlier, about the fact that this showed more than half of van fleets were not even considering battery EVs yet, he said: “Yes, which is a real challenge when you consider we are moving towards [the ban on new ICE vehicles in] 2030 – it’s not so many renewal cycles [away]. 

“Our view, when we are talking to fleets, is that they need to go through a learning process, even if it’s just with a handful of electric vans. They need to understand the impact on their business model, the impact on the driver and how they recharge. 

“It’s all a learning curve for them. At the very least they should be doing small pockets of EVs.”

Discussing possible reasons why the percentage of fleets considering EVs had fallen, Sadlier suggested that the ‘early adopter’ stage for the vehicles had passed.

He explained: “[What we have] now are people having to look long and hard at how they make EVs work on their fleet, in what areas of the fleet, because we have seen very few fleets where they can change to a full fleet of battery electric vans. So, we’re looking at pockets of vehicles they can change over.”

The survey also asked fleets where they were planning to use battery EVs, and found that 72% were planning to use them on all types of roads, while only 6% were planning to deploy them first in urban areas.

In response to What Van? suggesting that this was a surprise, given publicity around EVs being used for last-mile deliveries and the introduction of clean air zones in cities, Sadlier said: “It’s very difficult for a fleet to operate vans in very specific areas. Some operators will have them just in London, for example, but most companies need to be able to cover different routes – motorways, urban routes, country routes.”

Based on the survey results, 18% of the UK’s LCV fleet can be expected to be battery EVs in three years’ time. Sadlier pointed out that under the UK government’s ZEV mandate, 22% of LCV registrations in 2026 will need to be zero-emission vehicles, and that this figure then rises by 12% each year between 2027 and 2029.

He said: “Based on what’s happening at the moment that’s quite a steep curve for electric van registrations. This is where companies have to start [looking at EVs] because actually the product that’s going to be available to them to a certain degree is going to be electric vans.”

The survey also revealed that, based on fleets’ expectations, 19% of LCV fleets – and 27% of the smallest fleets – would be made up of either conventional or plug-in hybrids, an outcome that seems highly unlikely given the limited number of LCV models available with these powertrains.

Sadlier said: “I don’t think that the product will be there to meet that sort of level of market share, so I’d be very, very surprised if that’s the case. I think fleets will have to jump from petrol and diesel to the battery EV. 

“We’ve looked at working with clients and seeing if plug-in hybrids will do the job for them, and then it becomes a supply issue.

“They will have to make the jump. They think there’s a halfway house but the product’s not going to be there to fit enough uses.”

Despite the hesitancy around electric vans, the survey has revealed a more positive picture around overall LCV fleet numbers.

The survey asked for the first time about LCV fleets’ expectations in this area, and found that 87% expect vehicle numbers to either be stable or increase over the next three years, with expected company growth or development by far the most prominent factor in this.

Sadlier said that among Arval’s clients, LCV fleets were possibly more of a growth area at the moment than car fleets.

The expected expansion is despite answers to a separate question showing that fleets expect LCV running costs to rise across the board during the next year.

Explaining this, Sadlier said: “A van is a business tool, it’s needed for them to support their business model. 

“Nobody wants to pay more. They are having to pay more because, for example, vehicle lease rates, which is partly the list price of the vehicle, are going up, discounts are coming down, that’s an additional cost. 

‘What we are working on is looking at options that can mitigate some of these increases.”

The exception to the growth optimism was among the largest fleets, with 39% of organisations with over 1,000 employees expecting a decline. Sadlier said this could be due to smaller fleets having already right-sized in the wake of recent wider economic issues, while larger ones believe they will be further impacted.

When asked about the importance of receiving advice on different subjects, 55% of LCV fleets said it was important on SMR, compared with 52% on financial and legislative matters, and 35% on technical and operational consultancy. Sadlier suggested the emphasis on SMR – up by 13% in a year – could be due to vehicle cycles being extended, meaning more older vehicles on fleets.

The research also found that smaller fleets were generally more likely to seek advice, which Sadlier attributed to a lack of dedicated fleet managers compared with big fleets.

He said: “As you go down the size of the company and number of vehicles then there’s a good chance there isn’t somebody who is a really experienced fleet manager. 

“We see some fleet managers who could be a logistics manager, somebody in HR, somebody in finance, who are looking after passenger cars then suddenly being asked to look after LCVs as well, so they need to lean on people like Arval as a leasing company and other providers to support them, making sure they are legal, for example.”

Fleets were also surveyed about connected vehicle technology, with 46% saying they used this to locate vehicles or improve vehicle security, ahead of 39% to improve driver safety and behaviour, and 29% to improve operational efficiency.

Sadlier said: “Our view on connected vehicles is that fleets could use it for looking at other areas than just where the vehicle is. Right-sizing of the fleet, how many vehicles are being used, what are they being used for, what’s their coverage. 

“We’ve been talking to fleets where a small number of their vehicles were just doing a few miles per week. Do they need them? Do they fit in with a short-term rental for the day, or do they need them at all?”

Fleets were also asked for their views on advanced driving assistance systems (ADAS), with collision avoidance or warning systems named as most popular, followed by automatic emergency braking and lane departure warning.

Sadlier said van fleet operators were increasingly asking about vehicle safety features, which he said was a change in approach.

Regarding how LCVs have generally lagged behind cars when it comes to ADAS installation, he said: “Vans are behind but we’re having more conversations where certain types of ADAS should be considered as standard. 

“It’s a bit chicken and egg at the moment. The questions are being asked so hopefully the manufacturers will follow up on that.”

Finally, on the subject of LCV conversions, the survey found that 40% of fleets were carrying these out, down from 46% last year. Sadlier said that the 9% of fleets opting only for a ply lining was perhaps a surprisingly low percentage given its usefulness in protecting the load area from wear and tear.


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