Are EV Fleets the Answer?

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The expected cost reductions for electric vehicle purchases have not eventuated yet. So, are fleets the answer? A recent note from AVERE suggests that the decarbonization of fleet vehicle purchases may accelerate the availability of used electric vehicles in the European market.

“The European Association for Electromobility (AVERE) is the association that promotes electromobility and sustainable transport across Europe. Their members consist of companies, research institutions, and national associations supporting and encouraging the use of electric vehicles and electromobility across Europe. They currently have more than 50 active members, including from some of the most successful EV countries, like Norway, France, the Netherlands, and Belgium.

“Within these Associations, there are more than 2,600 industry members, ranging from SME’s, OEMs, and other companies with a commercial interest in electromobility and more than 150,000+ EV users.”

They are currently supporting the European Commission’s commitment to introducing regulation in 2023 for the decarbonisation of corporate fleets.

“Corporate fleets today account for an estimated 63% of new vehicle sales in the EU. They drive, on average, 2.25 times more mileage than privately owned cars, thus accounting for a disproportionate share of emissions. Moreover, corporate cars often quickly enter the second-hand market and become private after 36–48 months.

“They are, therefore, the main driver in bringing affordable second-hand EVs to the market, particularly in Eastern and Southeastern Member States, which, at this stage, remain at an earlier stage of EV market development.”

AVERE believes that regulation by the EU is the most appropriate legal instrument to achieve their goals of 100% new zero-emissions vehicles by 2030, a fully decarbonised European road transport by 2050, and making Europe a world leader in electromobility. This regulation will address the vehicles most driven, and thus the most polluting, first. It will have the secondary effect of making EVs affordable to consumers.

The EU has a planned 2035 phaseout of the sales of internal combustion engine (ICE) vehicles. Many member states have much earlier cutoffs.

AVERE Secretary-General Philippe Vangeel says: “Supplementing the strengthened CO2 standards and the 2035 phase-out of internal combustion engines, the planned proposal on fleets is a win-win and no-regrets solution.

“It will help carmakers by guaranteeing demand for their EVs, our climate by addressing the vehicles with the highest decarbonisation impact, and consumers by making affordable EVs available across the EU and stimulating a flourishing market for used cars. We look forward to working with the Commission on how the proposal could be shaped and enforced in detail.”

In the UK, the reduction in the Benefit in Kind tax has encouraged a transition towards EVs for those who access a vehicle as part of their employment package. In Australia, the federal government is in the process of implementing a similar program with our Fringe Benefits Tax.

Are EV fleets the answer? Possibly. At least, they will form part of the solution to decarbonising road transport.

Featured photo courtesy of Michelle Bamberry

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David Waterworth

David Waterworth is a retired teacher who divides his time between looking after his grandchildren and trying to make sure they have a planet to live on. He is long on Tesla [NASDAQ:TSLA].

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