Fleet sales last month were 58% higher for cars than in August 2022, providing more evidence of a recovery in the market. Powering this was high demand for pure electric cars, which were up 72% compared to the same month last year, and 40% ahead this year of 2022. Van sales are up 20% year-on-year too.
With diesel sales falling, but petrol on the rise, many businesses are still trying to understand what their fleet might look like in future as they work through these changes in powertrain choices.
So if you have a 100-strong fleet, how might the future look? Interviews with 400 fleet managers by industry analysts 360 Media Group in its recently published Fleet Outlook Report found many businesses are undergoing fundamental change in the type of vehicles they run, and how they fund them.
The Fleet Outlook Report research found that nearly a quarter (23%) of new company car orders are electric, with around half of fleets offering electric cars on their choice list.
Increasingly, company car fleets are made up of a mix of vehicles, not just in terms of their powertrains, but how they are funded too. While around a quarter of company cars on a fleet will be electric, with the other three-quarters a mix of petrol and diesel, an increasing number of those which are electric may not be classed as ‘company’ cars for much longer.
Around two-thirds of company cars are ‘business need’, with the other third more flexible (often perk drivers) and so instead they may end up being funded by salary sacrifice, which technically means they are no longer company cars, but private cars instead.
The tax breaks for electric vehicles sourced through salary sacrifice means increasing numbers of drivers are opting out of traditional company car schemes and into these alternative funding mechanisms set up by the company. Indeed, the 360 Media research found that 48% of fleets are ‘very likely’ to introduce salary sacrifice schemes in the future, and new figures from the BVRLA show the salary sacrifice market grew 41% year-on-year, with 91% of registrations pure electric.
So the 100-company car fleet of today may be made up of around 25 electric company cars now, but as salary sacrifice increases in popularity, the overall official fleet size may decrease, while electric car numbers increase, as perk drivers opt out of traditional company cars and into electric salary sacrifice options.
This year so far, electric vans have made up only 5% of total sales, but this is rising all the time. More than 11,400 have been registered in 2023, up 16% in 2022 and in August, for example, electric vans accounted for nearly 7% of all sales.
So in a 100-vehicle fleet with 30 vans, currently only one or two are powered by electric. However research suggests that this is going to change quickly. The 400 fleet managers quizzed predicted 22% of vans orders will be electric in the next 12 months. In that 30 van fleet, suddenly three or four times as many will be electric.
It’s hard to say exactly how a typical fleet will develop in the next few years, but there are some trends that point to how it will go.
Firstly, it seems that within the next replacement cycle of three to four years the majority of cars funded by businesses will be electric. However, what’s not known is how many will remain company cars, and how many might switch to salary sacrifice.
With around half of fleets likely to offer some form of salary sacrifice scheme (assuming the tax advantages for doing so remain), then a 100-strong company car fleet now could be somewhat smaller in the next few years.
Nevertheless, those opting for salary sacrifice still need to be treated as business drivers, with all the charging expense and risk management that entails for business mileage on the road and at home.
As for van fleets, electric numbers are set to grow quickly. New processes for payments and charging will need to be put in place, domestically and in public, while still managing traditional diesel models.
With registrations growing and the shape of the company vehicle park changing rapidly it will need managing, and the expenses of its various cohorts of drivers and what powers different vehicle types paid for. That’s where Allstar comes in.
Our Allstar One Electric card can pay for electric, petrol and diesel so no matter how radically your fleet shifts in the next year, you have payments and expenses covered.