Fleet Alliance has hit a new record for the proportion of Ultra Low Emission Vehicles (ULEVs) on its managed fleet, accelerating its rapid progress towards meeting its EV100 commitment.

CEO Andy Bruce said demand for ULEVs was being driven both by sales to new customers and to existing clients

Around two-thirds (66%) of last year’s new car sales at the Glasgow-based leasing and fleet management specialist were ULEVs – defined as vehicles with CO2 emissions of 75g/km or less.

A third of these (33%) were zero-emission battery electric vehicles (BEVs), which saw a year-on-year sales growth rate of 50% over 2021. Another third (33% again) comprised hybrid vehicles (both full hybrids and PHEVs), sales of which were up by 10% in the last 12 months.

That’s double the market penetration for BEVs and hybrids/PHEVs across the UK new car market as a whole. SMMT date for 2022 shows 16.6% of all new cars were BEVs last year while 17.9% were HEV/PHEV.

CEO Andy Bruce said demand for ULEVs was being driven both by sales to new customers and to existing clients.

“We are seeing growing numbers of our customers make their own commitment to going electric by adding either BEVs or hybrids to their fleets as they move to meet their own ESG timetables. While we have been actively encouraging them, we have largely been pushing against an open door,” said Bruce.

Take-up also underlines Fleet Alliance’s commitment to its membership of the EV100 climate group – the business has pledged to electrify its 30,000-strong managed fleet by 2030. Its own corporate fleet went fully electric in mid-2021.

Fleet Alliance’s salary sacrifice scheme has also been a key driver in the growth of ULEVs. Launched late-2021, it’s proved increasingly successful, not least because of the current cost-of-living crisis and the tax benefits that the scheme delivers for EV drivers – the firm’s calculations show that leasing an EV through salary sacrifice can save up to 50% of the running costs compared to a personal contract hire (PCH) agreement.

Interest in the scheme has also been driven by the Government’s announcement in the Autumn Statement of continued low BiK rates up to 2028.

“That removes the fear that drivers might suddenly be landed with large tax bills by switching to EVs,” Bruce continued.

“At the same time, the fact that we competitively tender all salary sacrifice leases across a wide panel of funders means we maximise accessibility to EVs for our customers,” he added.

“We have found that many companies are very receptive to the idea and willing to consider introducing a salary sacrifice scheme, while we see our role as conveying the clear advantages that it brings to drivers.”

Demand is set to rise further this year as the current vehicle shortages start to abate and the choice of electric vehicles continues to grow.

“We are expecting supply to begin to ease during 2023, with more electric models being introduced across the board from all manufacturers. And we are expecting to see a return to near normality towards the end of the year with lead times and prices gradually coming down as supply eases,” Bruce said.