Official figures from the SMMT revealed that sales of diesel cars dropped by 25.6% in January and this decline is set to continue as fleets lead the way in moving away from the fuel much faster than the industry expected.
Confusion over Government policy is said to be one factor causing buyers to be hesitant. Diesels have been the focus of air quality concerns, prompting speculation that owners could face higher taxes or limits on where they can be used.
The government has stated a long-term goal to ban the sale of new cars running solely on petrol or diesel by 2040. Company car tax for diesel cars was increased in the November budget and London has introduced a higher congestion charge for higher polluting vehicles.
Sewells Research & Insight’s twice-yearly Market Barometer has found that 71% of fleets currently operate diesel cars, but only 59% expect their replacement cars to be fuelled by diesel. Petrol cars will take up most of the slack in the short-term, although the most dynamic growth will be in sales of hybrid and electric cars.
The Market Barometer suggests that as many as 30% of fleets expect to run hybrid cars within the next 12 months, and a further 7% will have pure electric cars on their books by the end of the year.
Corporate fleets (employing 250+ people) are leading the way towards a lower emission future, with 47% expecting to replace some of their cars with hybrids this year, and 16% preparing to run electric cars.
Benefits attracting fleets to make the move to alternative fuels:
• Fuel cost savings – It is estimated that the cost of electricity to power an electric vehicle is about one third the cost of petrol.
• Emissions benefits – Hybrids produce far less pollution from the exhaust while electric vehicles produce zero direct emissions.
• Lower maintenance costs – Electric vehicles have far less moving parts than a conventional petrol or diesel car. Expensive exhaust systems, starter motors, fuel injection systems, radiators and many other parts aren’t needed in an Electric Vehicle. Although Plug-in Hybrids have a petrol engine, the electrical motor requires little maintenance due to far less moving parts, which leads to less wear and tear to the petrol engine components.
• Safety – Electric Vehicles tend to have a lower centre of gravity that makes them less likely to roll over. They also have a lower risk for major fires or explosions and the body construction and durability makes them safer in a collision.
• Less noise – Hybrid and electric vehicles produce much less noise than their conventional combustion powerplants
Simon Staplehurst, commercial research director, Sewells Research & Insight, said “The fleet sector has passed the tipping point from a default to diesel towards a greener future.”