A proactive approach to both electrification and mobility will be vital for fleets in the countdown to 2030.

There are now around 370 electric car models available, a significant increase from pre-pandemic

A new report published by Cox Automotive and Grant Thornton says that pressure to go electric and legislation is driving change, supported by the ambitious 2030 targets in the UK and electric plans in other markets.

And while current short supply in the new and used car markets is hampering fleet ambitions to transition their vehicle mix, the Automotive Insight Report suggests the enforced reset in the market as a result of plant shutdowns, supply chain challenges and raw materials shortages will open the doors for increased adoption of battery-powered vehicles.

Owen Edwards, head of downstream automotive at Grant Thornton, said: “Most global vehicle manufacturers have indicated they will stop making or selling ICE vehicles between now and 2050. Many have already begun that process, and there are now around 370 electric car models available, a significant increase from pre-pandemic. Consolidation and vertical integration are producing economies of scale on production lines, as well as collaborative technology development around the raw materials, powertrain, and charging infrastructure. For fleets, there are just one or two change cycles remaining to make the transition to electric.”

Speaking in the report, 360 Media Group also said that electrification represented a major opportunity for the wider fleet and automotive industry to get onboard and support operators.

Managing director Ian Richardson commented: “Faith in the whole-life cost of electric cars remains an issue for fleets, but the new generation of battery-powered makes and models is swiftly overcoming range anxiety. The dramatic pace of change is presenting new opportunities for car makers that previously accounted for modest fleet sales, and challenging the traditional fleet heavyweights.

“It is also placing demands on leasing companies to be flexible in contract lengths; to work with fleet customers to identify the drivers and vehicles best suited to be in the vanguard of the new EV wave; and to consult on the best recharging strategy. Fleets are also raising their expectations of their leasing suppliers. Driver profiling tools to identify which employees could switch first to electric cars, and the option to bundle the cost of installing a home charger into a lease are both key areas where fleets are seeking assistance.”

The changing face of mobility

The 2021 Automotive Insight report, now in its fourth year, also highlights the significant opportunities presented to fleets by mobility developments.

While shared mobility has come under pressure during the Covid-19 pandemic, the authors suggest short-term leasing and subscription products are likely to make a significant impact on the shape of the market in the years to come.

And for the fleet sector, this means a change in the way the relationships with the manufacturer and the driver are managed, as well as opportunities to explore new revenue streams and complementary aftermarket services.

Traditional fleet cycles and trends will be subverted too. With vehicles potentially moving between drivers more frequently, the report suggests there will be a much wider range of age and time cycles in the market, rather than the more traditional sub-12 month or three-year replacement phases.

As such, fleets and rental companies will need to consider how best to maximise vehicle utilisation and monetisation.

The report also reveals the increasingly dynamic way in which vehicles are owned and used. It shows how Cox Automotive brands are using data-driven technology to connect vehicles with service providers and facilitate effective asset management in an era of evolving finance and ownership models, as well as maximising a global end-to-end vehicle servicing network.

It also looks at mobile servicing and encourages fleets to consider how cross-border remarketing solutions can support their mobility ambitions.

Philip Nothard, insight and strategy director at Cox Automotive, said: “The organisations which succeed in this new automotive era are those who build or buy the capability to keep up with the global pace of change; those who partner strategically around the world to create networks which offer holistic international solutions; those who find ways to remove borders and barriers; and those whose vision is focused on enabling people to remain mobile, whatever shape that will take.”

This year’s Cox Automotive and Grant Thornton Automotive Insight Report also explores the impact of electrification; online retail and digital transformation; connected propositions; the changing shape of mobility solutions post-pandemic; as well as changes in the wholesale ecosystem.

And the report features revised 2021 UK new and used car forecasts, as well as outlining possible scenarios for 2022 and beyond.

On the back of the weakest September for new car registrations since 1998, Cox Automotive has revised its year-end forecast down to 1.63 million; on a par with the year-end figure for 2020, also 1.63 million. While supply constraints are impacting used car transactions, the market is expected to exceed the 6.75 million transactions which took place in 2020 and the Insight Report 2021 projection for used car transactions in 2021 now sits at 7.14 million.

To view the full interactive report, click here