The impact of the intensifying Middle East conflict on pump prices could speed adoption of electric vehicles by fleets, FleetCheck has suggested. 

The fleet software specialist pointed to the five-month high in the price of international standard Brent Crude oil, which looks set to rise further still.

The RAC said Monday that the average price of a litre of petrol has already increased by 1.5p to 133.5p in the last week while diesel has gone up by 2p to 140p, and FleetCheck has now warned that the current problems in the Middle East, unless resolved unexpectedly quickly, will lead to a spike in petrol and diesel prices and potentially quite a dramatic one.

Peter Golding, CEO at FleetCheck, went on: “We know from the period of high inflation seen in recent years that when fuel prices jump, fleets will start looking at ways to contain costs. These tend to include measures such as the adoption of fuel cards to bring greater control over spending and even limiting business journeys, but have also included increasing use of EVs.

“If electric cars and vans are charged at home, they are by far the cheapest way of covering miles on an operational basis. High and unpredictable oil prices do change the maths behind total cost of ownership and increase the attractiveness of EVs to fleets.”

Golding added that dropping prices for new EVs were also affecting fleet calculations over when to switch.

“We’re rapidly seeing the price of new electric cars broadly align with petrol and diesel equivalents. This is being powered both by increased competition from Chinese new entrants and lower cost models from well-established manufacturers.

“If we were to place bets, we would back prices falling further in the second half of this year. Chinese manufacturers have massive overcapacity and are currently engaged in a huge price war in their domestic market. While we don’t expect to see disorderly marketing emerging, the pressure on them to discount stock and increase market share in the UK and Europe is going to be almost unavoidable.”

And Golding said there was also potential for rising fuel prices to drive fleet adoption of electric vans, despite the issues over range and payload.

“For both electric cars and vans, it is like playing the penny falls machine at an amusement arcade. Eventually, the balance of factors that influence EV adoption such as fuel prices and the cost of acquisition accumulate and the coin drops.

“While it is undoubtedly taking longer from the penny to fall for most van fleets, we’re perhaps entering a phase where, for some, electric vans will now make greater sense, even where there are operational hurdles to overcome.”