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Fleet growth plans underpinned by low taxation on EVs, says Arval

By / 3 months ago / UK News / No Comments

Fleets are markedly more optimistic about growth prospects than prior to the pandemic, supported by low Benefit-in-Kind taxation on electric vehicles, according to Arval.

Arval said larger fleets have strategically identified the likelihood of growth in a world where low taxation on EVs is set to increase company car uptake

Its 2021 Mobility Observatory research asked participants whether they expected the number of vehicles they operate to increase or decrease in the next three years; the response was eight percentage points higher than 2020’s survey (29% compared to 21% a year ag0).

Optimism is particularly high among large fleets. Within companies with more than 500 employees, more than half (59%) are expecting fleet growth, compared to almost a third (+32%) among small and medium-sized enterprises with 10-99 staff.

Key reasons for expecting fleet expansion include company growth or development of a new activity that requires vehicles (67%), provision of a safe commute for employees due to Covid-19 (34%) and companies planning to offer vehicles to employees who are not currently eligible (32%).

The research also looked at the top three reasons cited for a decrease in fleet size and found 49% of respondents believe it will be due to the impact of Covid-19, followed by 38% who say it’s because of plans to increase home office working. And 23% think it’s because drivers will choose a cash allowance.

Shaun Sadlier, head of Arval Mobility Observatory in the UK, said the figures point to a high degree of resilience in the marketplace in which fleets operate.

He continued: “This positivity is much more noticeable among larger fleets than smaller ones. A potential explanation for this disparity is that bigger organisations have strategically identified the likelihood of fleet growth in a world where low taxation on EVs is set to increase company car uptake, as well as converting cash allowance takers to salary sacrifice schemes. SMEs have perhaps not yet had the time to devote to these areas and may well be focused on overcoming the effects of the pandemic.

“Overall however, these figures are very good news for the company car sector, which undeniably looks set to be given new life by the increasing adoption of EVs and their associated environmental benefits.”

The findings come from the 2021 edition of Arval Mobility Observatory’s Barometer research, which covers 5,197 fleets across 20 countries and asks a wide-ranging set of questions about fleet and mobility trends.

In the next three years, do you think that the total number of vehicles in your company fleet will increase or decrease (response for cars and vans combined)?

Overall % Fewer than     10-99        100-499      More than 500
10 employees employees employees employees

Increase     39          21                   32                53               59
Decrease   11           11                   14                9                 11

Balance of increase/decrease % – numbers have been rounded

2021         +29        +11                  +18              +44             +48
2020         +21        +11                  +31              +25             +23

Why do you think that the total number of vehicles on your fleet will increase?

67% Because our company is growing or developing a new activity that requires vehicles.
34% To provide a safe commute for employees due to COVID-19.
32% Our company plans to offer vehicles to employees without current eligibility.
27% Our company plans to propose shared vehicles to employees.
23% Because of HR-related need such as talent, recruitment, retention, etc.
11% Because of tax decreases.

Why do you think that the total number of vehicles on your fleet will decrease?

49% The impact of Covid-19.
38% We plan to increase home office working.
23% Because drivers are choosing a cash allowance.
18% Fewer employees will have access to company cars.
17% Because of tax increases.
15% Business is declining.
7% The introduction or development of alternative mobility solutions.
3% Because of CSR policy.

For more details on the research, click here.

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. Natalie edits all the Fleet World websites and newsletters, and loves to hear about any latest industry news - or gossip.