As 2024 draws to a close, Tim Laver, UK managing director at Ayvens, takes a look back at some of the key trends that shaped the fleet industry this year.

Tim Laver, UK managing director at Ayvens

With elections looming on both sides of the Atlantic, a still-lingering cost of living crisis, and the first zero-emission vehicle (ZEV) sales targets for manufacturers, 2024 was never going to be a quiet year for the fleet sector.

Amidst this dynamic backdrop, we proudly marked the official launch of our new brand, Ayvens, in the UK. This exciting milestone is not just a key moment in our global brand rollout, but also a major step forward in our mission to provide UK customers with seamless access to our market-leading leasing and consultancy services.

In a year defined by both opportunity and challenge, there has never been a more exhilarating time to be part of the fleet industry. The landscape is evolving rapidly, and the need for strategic adaptation has never been more pressing.

Join me as I reflect on some of 2024’s most defining moments and share my predictions for the year ahead.

A Budget that delivered good news for fleets… mostly 

After 14 years of Conservative rule, Sir Keir Starmer’s Labour Party won a decisive victory in the July general election, marking a new era in British politics. Just three months later, Chancellor Rachel Reeves unveiled a significant Budget.

Among large tax increases and spending boosts, the Chancellor made evident the Government’s direction of travel for policy on road transport. There were clear signs of long-term support for EVs and hydrogen fuel cell vehicles, with the reinstatement of the 2030 phase-out date.

The Budget also offered much-needed clarity for fleets on company car tax and VED

The Budget also offered much-needed clarity for businesses and company car drivers. Company car tax (CCT) for ZEVs will rise by 2 percentage points in the 2028/29 and 2029/30 financial years, from 5% to 9%.

While this increase is significant, it remains far below the next-lowest band of 18%. This is particularly good news for sal-sac users, which continues to make EVs more accessible.

The Government confirmed that VED exemptions for ZEVs will end on 6 April 2025, with all cars registered since April 2017 subject to the £195 annual fee.

On a positive note, the Budget set a £10 first-year rate for ZEVs (paid at registration) until 2030 and plans to adjust the £40,000 threshold for the Expensive Car Supplement.

Electric LCV incentives saw a more modest boost. A £120m extension to the Plug-in Van Grant will cover up to 35% (or £5,000) of the purchase cost, though VED for electric vans will be equalised with diesel vans at £345 from April 2025.

Perhaps the biggest hit came for plug-in hybrid vehicles (PHEVs). Starting in April 2025, first-year VED will rise by £100, with an additional £10 for annual renewals. By 2028, vehicles emitting 50g/km or less will be subject to a flat 18% CCT rate, significantly increasing some drivers’ tax bills.

While it’s too early to see the full effects of the Budget, our Consultancy Team continues to support customers in navigating these changes and seizing emerging opportunities.

A clearer path to zero-emission vehicles 

The new ZEV sales targets introduced this year require manufacturers to sell a specified proportion of electric vehicles as part of their total annual registrations, with significant fines for those who fail to meet the targets. Those targets start at 22% of new cars and 10% of new vans in 2024, rising to 80% and 70% in 2030 and 100% for both in 2035.

The newly launched “fast-track” consultation on the ZEV mandate explores changes to flexibilities

However, there is some flexibility available for manufacturers as they can earn transferrable credits for beating average CO2 targets for non-ZEVs.

Those credits might be valuable. Only 18.7% of new cars and 5.8% of LCVs were electric during the first 11 months of 2024, according to the SMMT, which added that this was being subsidised by “billions in unsustainable discounting”. Demand for PHEVs, which can help reduce average non-ZEV CO2 emissions, increased by 22.5% to take an 8.4% market share.

While we agree with the underlying principles of the mandate, we would like to see a greater level of flexibility for manufacturers going forward, particularly for those who demonstrate the right behaviours. We also welcome the Government’s launch of a “fast-track” consultation, as we believe there are certain elements that need to be addressed, for example, some of the fine points on credit trading and catch-up targets.

Fleets continue to lead the charge on the EV transition  

Despite stagnant retail demand for new cars, fleets capitalised on a generous package of incentives and accelerated their electrification plans this year. Businesses accounted for 80% of PHEV and 83% of BEV registrations during the first half of 2024, according to the Department for Transport. A fifth (21%) of new company-owned cars were electric during that period, which is almost in line with the ZEV mandate target.

The effects are marked. Half of BVRLA members’ business contract hire (BCH) deliveries were electric during the second quarter of 2024, which in turn reduced the entire fleet’s average CO2 emissions by 20% year-on-year to 63g/km. Meanwhile, our recent survey of 252 fleet decision-makers found that 63% of large fleets that had made electrification part of their sustainability strategy had benefited from improved reputation and brand image, while 49% had cut costs.

Building a better charging network  

The Government has set a target of 300,000 public charge points by 2030 to meet the growing demand for electric vehicles, and the quality of that experience is a priority too.

Charge point operators must now achieve 99% uptime

From November 2024, charge point operators (CPOs) must achieve 99% uptime across their network, provide manned 24/7 customer support and publish their reliability data.

Contactless payment is mandatory for all 50kW or faster rapid chargers and new installations at 8kW or more, with requirements for transparent pricing and (from November 2025) compatibility with roaming services. CPOs can be fined £10,000 for not complying.

Support for home charging was also extended in 2024. Since March, households with on-street parking have been eligible for up to £350 (or 75%) towards installing a charge point. However, it doesn’t reserve the adjacent parking space.

Tariffs on Chinese EVs 

China manufactured around 86% of the world’s lithium-ion batteries and 68% of its EVs during 2023, and it’s undercutting most rivals just as government policy is favouring electrification. This has provoked measures to protect manufacturing jobs in other regions.

The United States introduced a 100% tariff on Chinese EVs in May, and Canada followed suit in August. In Europe, the European Commission conducted an anti-subsidy investigation in October and (having set temporary duties in July) fixed rates at between 17.0% and 35.3% for five years.

However, there are no plans for the UK to introduce similar tariffs, and, with even tougher ZEV mandate targets in 2025, price competition for new models could heat up further next year. That should be good news for fleets.

Looking at the road ahead  

Don’t hold your breath for a calmer year in 2025. There’s plenty more change on the horizon including the phasing in of the new Euro 6e-bis standard (which could see a huge increase in PHEV emissions), tougher EU CO2 targets for new cars and vans, and the introduction of the London Congestion Charge for EVs.

New arrivals from the East include the Jaecoo 7

Meanwhile, several new Chinese-produced EVs are set to launch in the UK, including models from Leapmotor, Changan, Xpeng, Skywell UK and Jaecoo UK. This influx is expected to intensify competition in the EV market and potentially drive down costs for end-users.

As always, we’re here to help fleet operators make sense of these changes and turn change into opportunities – whether that’s driving efficiencies, reducing operating costs, or making the most of new technologies.