Despite all the doom and gloom, there are some signs of optimism for fleet managers this year.
The number of rapid charge points is expanding, rapidly
Last year, more than 8,700 chargers were installed in the UK, increasing the overall number by a third since the end of 2021, according to Zap Map statistics. And that growth will likely continue in 2023, experts believe, as demand for EVs soars.
In particular, the roll out of rapid and ultra-rapid chargers is expected to gather pace. In its report looking forward to what will happen this year, Zap Map Commercial Director Alex Earl, said: “Looking ahead to 2023, I only expect this upward trend to continue for high-power chargers, with more and more hubs of 100kW+ chargers popping up across the country.”
As well as the rise in the number of charge points being installed by operators, local councils are getting in on the act too, especially with kerbside points that homeowners without a driveway can access. Research has found that councils are planning to install more than 16,500 new public chargers this year – double the amount already in place.
Lead times for vehicles could shorten, at last
During and post-covid, fleets have been hit by longer and longer lead times for cars and vans, as supply chains were disrupted.
One of the main issues was the shortage of semi-conductors, vital in the operation of many vehicle systems, after producers switched from supplying automotive manufacturers to consumer goods makers during the pandemic.
But according to Simon Harris, Head of Valuations at UK Vehicle Data, specialists in the UK automotive industry, the cost-of-living crisis could have a dampening effect on consumer demand for electronic and white goods, freeing up semi-conductor capacity and therefore increasing vehicle production.
“We’ve spoken to a number of manufacturers and they are far more optimistic about production capacity this year than they were six months ago. The result of this is that lead times, which have been at all-time highs, should start to reduce. As a result, firms can expect to defleet those ageing vehicles they have not been able to replace, and get drivers into new cars and vans,” he said.
Inflation to drop, so fuel and other vehicle prices might too
The last few years have proven one thing: you can guarantee that there are no guarantees. But there is finally some good news on inflation, it seems.
Experts suggest that inflation peaked in the autumn at a 41-year high of 11.1 per cent, dropped in November to 10.7 per cent, and should continue to slowly decrease during 2023, returning to the Bank of England target of 2% in the ‘medium term’.
Janet Mui, head of market analysis at analysts Brewin Dolphin agreed. She said: “The main source of pain in 2022 was arguably the persistence of eye-watering inflation, which had a knock-on effect on monetary policy and economic activity. The good news is that inflation is likely to slow sharply in 2023 for a number of reasons.
“Commodity prices, including wholesale oil and gas, have fallen notably. Inventories of goods are building up and shipping costs are falling rapidly, which are good signs for price pressures to fall.”
What does this mean for fleet-related purchases such as fuel, electricity, parts and services in 2022? Well, it mostly points to a general downward trend relative to last year, which can only be a good thing. But as we have seen in 2022, making predictions about the economy is a precarious business…
Electric vans are booming
2022 was an appalling year in the van market, with a severe lack of supply meaning that LCV sales dropped to 282,000 units, more than 20% lower than the previous year, according to figures from the Society of Motor Manufacturer and Traders.
But the SMMT predicts a strong bounce back this year, with the LCV market set to grow to 330,000 units powered in parts by electric vans. It expects sales of these vehicles to rise by 60% in 2023.
Mike Hawes, SMMT Chief Executive, said: “A return to growth is expected in 2023, but if this crucial sector is to deliver for the economy, society and the environment, action is needed from all stakeholders, particularly in the areas of charging infrastructure and fiscal frameworks, enabling more van buyers to make the switch.”
Renting cars and vans is going to be much easier
The vehicle shortage supply has meant that over the past two years, it has been more difficult for firms to rent cars and vans because, quite simply, the hire companies don’t have the stock. The result of this is has been far less flexibility for firms needing to get employees on the road quickly, or to replace vehicles that are in for repairs or maintenance.
But according to the British Vehicle Rental and Leasing Association’s Industry Outlook report, which garners opinion from executives across the industry, 2023 looks far more rosy when it comes to short term hire.
It said: “Given the uncertainty of today’s turbulent economy, rental companies are particularly buoyant about the year ahead, with the flexibility of short-term hire proving attractive to businesses that do not want to make long-term financial commitments.”
“Overall, 44% of car rental companies and 40% of van rental companies expect demand in 2023 to be stronger than 2022, while flexi-rental products for light commercial vehicles are forecast to boom, with 57% of suppliers expecting the next 12 months to be stronger than this year.”
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