Will Brexit affect the uptake of EVs among business fleets?
25th May 2021
One of the few success stories to come out of last year was the long-anticipated rise of the electric vehicle. Against a backdrop of COVID restrictions and Brexit uncertainty, the EV market defied the odds. New registrations of battery electric vehicles (BEVs) rocketed by 185.9%. To put this into perspective, overall figures for new vehicle registrations fell by over a quarter (29.4%).
The EV market’s triumph is largely down to growth in the business fleet sector. In 2020, 68% of new EV registrations were for company cars. Businesses are becoming more environmentally conscious, and are making bolder decisions around their fleet policies by choosing to make the switch.
Now more than ever, fleet-operating businesses are enjoying the benefits EVs offer. This includes tax exemptions, enhanced driver satisfaction, lower running and maintenance costs, and the knowledge that they’re playing their part in the fight against climate change.
The challenge fleet operators and the wider EV sector now face is maintaining this momentum, particularly following the UK’s exit from the EU. From ‘Rules of Origin’ tariffs to supply chain delays, Brexit has the potential to lead to a radical shake-up within the automotive industry, which could, in turn, have a significant impact on fleets. Some, however, believe that it presents us with a unique opportunity to innovate and become world leaders in EV and battery production technology.
Now that the dust is starting to settle, just how much of a disruption will Brexit be for the nation’s journey towards electrification? And how should businesses manage their transition to electric vehicles?
What Brexit means for fleets
Despite the fact an agreed trade deal is now in place, Brexit continues to create a level of uncertainty around supply chains and infrastructure. This is naturally a cause of concern for many business fleets.
One of main challenges that Brexit presents is around the Rules of Origin. As part of a post-Brexit trade deal, the UK and the EU agreed that EVs will remain tariff-free until the end of 2023. This is on the condition that at least 40% of their components are of European origin, and at least 55% until the end of 2026. After that, it’s possible that EV sales from the UK to the EU and vice versa will incur a tariff, however the percentage could be reduced if both sides agree to review the final level. During this time, it’s likely that more manufacturers will move production to the UK. Nissan, which already manufacturers lower-capacity 40kWh batteries at its Sunderland plant, has committed to shifting all battery production to the UK to comply with these new rules.
Further challenges still exist for business fleets, particularly around delays in the delivery of vehicles, repairs and tyre replacements. The key is for policy makers to make sure that the UK remains an attractive market for suppliers while still delivering on the nation’s net zero targets.
The evolving role of the fleet manager post Brexit
Despite all the challenges of Brexit, the EV industry has proven itself to be resilient. Step by step, the industry is working collaboratively and in consultation with policy makers to overcome these obstacles.
Over the last year, fleet managers have become more adaptable than ever before. They’ve helped their drivers stay safe and manage constant change. These attributes will be invaluable when navigating the uncertainties that Brexit brings, as more change and disruption is inevitable.
Balancing government strategy with their employer’s own business objectives, as well as staying on top of new rules and regulations, will become a much larger part of the fleet manager’s role now that the UK has left the EU. They are the in-house authority on these matters, empowering both the board and the workforce with up-to-date information and guidance. With the government’s plans to end the sale of new internal combustion engine cars set to come into force in 2030, it’s not a question of if, but when. Fleet managers need to act now to futureproof their operations.
Managing such a large remit in an ever-changing environment isn’t an easy task. By leaning on the EV experts, fleet managers can take the headache out of their journey towards electrification. This allows them to concentrate on keeping their drivers safe and find greater efficiencies in their fleet strategy.
Transitioning to an EV fleet is a key part of cutting a business’s carbon emissions and building on their sustainability agenda, but many fleet managers don’t know where to start or have the time to think about it. But the tools to help them are there – for example using fleet software such as telematics can identify where vehicles can be switched effectively. Likewise, a thorough review of existing infrastructure can allow fleet managers to maximise their assets and reduce downtime – saving them a lot of money in the process.
We can work together to keep the pedal firmly on the drive to electrification, help UK businesses reach net zero and be an example to the world on climate action.
To find out how Drax can support your business on its electrification journey, contact us below.Contact us