Fleet Outlook Report 2023 Fleets reveal their future car strategies
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The Fleet Outlook Report measures fleet buyer opinions to identify market trends, strategies, and buying influences. Fleet Outlook analyses 400 fleet buyer interviews to identify fleet trends, track electric vehicle momentum, and reveal their charging strategies. The 4th edition of the Fleet Outlook Report helps fleet buyers inform their strategies and delivers evidence for fleet supply chain planning. The report reveals that the momentum towards EV adoption is strong, with 1 in 4 new company cars orders expected to be electric, overtaking the demand for petrol cars by the end of the year. The delay to ban the sale of new petrol diesel cars and vans until 2035 is deemed unnecessary for most fleets, with 80% of fleets expecting to have at least 50% of their fleet electrified by 2030 and 24% confident that this will happen by 2025.
UK car fleets are also receptive to alternative funding methods, with interest in salary sacrifice schemes strengthened following the new BIK tax tables to 2028. The full report, leadership briefings, and insight-based training are now available to inform stakeholders and customer-facing resources on the latest #fleettrends, for details go to www.360mediagroupltd.com
Ian Richardson – Founder of 360 Media Group Ian has been advising automotive brands on fleet data and researching fleet audiences for nearly 2 decades. Previously serving as the publisher of Fleet News, head of Sewells, and creator of the FN50, Ian has helped brands gain clarity on the fleet market and identify opportunities.
Working with 360 Media Group ‘The BVRLA has worked with 360 Media on several projects, most recently our 2023 Industry Outlook. They worked closely with us on this project, helping us to design an effective survey, gain key inputs from in-depth interviews with our members, and produce an attractive and insightful final report.’ Toby Poston, Director of Corporate Affairs | BVRLA
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Fleet Outlook Report 2023 – Cars
Report Structure 400 UK fleets are surveyed twice yearly to inform market direction, media consumption, and brand health. The sample is split into three groups as standard: ▪ 6-25 vehicles ▪ 26-99 ▪ 100 plus ▪ Surveys conducted during Q1 2023 KPI structure - Strategy & Buying Fleet Strategy
Buying Influences
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Market growth predictions
1
Usage – the main purpose
2
Sales channel preference
2
Mileage profiles
3
Primary funding method
3
Agency sales model
4
Powertrain predictions
4
CO2 Cap
5
Future fleet priorities
5
Operational considerations
6
Alternative funding
6
Factors impacting EV adoption
Supplementary Insights are shared from the EV Index and 360 Media Knowledge Hub on fleet profiles, charging priorities, and communications. Insights correct at publication, fieldwork conducted during quarter one of 2023.; 4
Contents
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Market trends – summary Executive Summary Market predictions summary Car fleet growth predictions Finance method Future orders by the powertrain EV Adoption timeline Alternative funding change indicators Agency model Car fleet profile, job need vs. perk Fleet policy - options to access electric cars Fleet choice list influences Cash allowance trends Charging profiles EV model appraisal
The Fleet Outlook Report measures fleet buyer opinions to identify market trends, strategy, and buying influences. 360 Media Group also tracks electric fleet momentum and charging strategies. Our report influences fleet buyers and the supply chain, adding authority to thought leadership events and providing evidence for planning.
Executive summary
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Executive summary Market sizing and Influences on buying decisions ❑ 400,000 operate in the fleets in the UK ❑ 99% of the fleet population are SMEs. ❑ 64% of company cars are ‘business need’, leaving one-third with the potential to opt out of the fleet if the car choice list is no longer attractive. ❑ 51% of fleets have a fleet policy ❑ 51% of fleets adopt Total Cost of Ownership (TCO) as their funding calculation. Mid to long-term predictions ❑ 2025 is a significant milestone, with 24% of car fleets predicting to reach the tipping point. ❑ 49% of fleets agree that BIK Tax certainty to 2028 will have a positive impact on their fleet ❑ Over 80% of fleets expect at least 50% of their fleet to be electrified by 2030. ❑ Just one-third of fleets are fully aware of the Agency Sales Model, with 60% aware but with little or limited knowledge.
Source: Fleet Outlook & #FleetTrends 7
Executive summary EV Momentum ❑ 42% of fleets predict their fleet size will likely increase in the next 12 months, with the Construction and Transport sectors likely to grow fastest. ❑ 61% of fleets have at least one electric car on their fleet ❑ Fleets predict that 23% of their new car orders will be electric, with the momentum indicating overtaking petrol by Q3 2023. ❑ Perk Car drivers are more likely to have access to an electric car through their choice list or via trading up. Offering models with a good range performance, competitive lease rates, and charging support are key to inclusion on the EV choice list. Fleet funding ❑ 1 in 2 Fleets predicts using Contract Hire or Finance Lease to fund their cars in the next 12 months. ❑ Fleets are interested in exploring alternative funding solutions, with car subscriptions, salary sacrifice schemes, flexible solutions, and mobility allowances generating significant interest. ❑ 51% of fleets expect cash allowance uptake to remain the same; however, 40% of fleets are prepared to change their suppliers if they do not ❑ 1 in 3 fleets are ‘likely’ to introduce salary sacrifice schemes, while 48% are very likely. ❑ 30% of fleets expect to see an INCREASE in cash allowance drivers, while 14% see a decrease; (this is the opposite direction vs. wave 1 2022 report) Barriers ❑ 1 in 3 fleets see the rise in energy prices as having a detrimental impact on their fleet ❑ 22% of fleets acknowledge low levels of knowledge of electric vehicles ❑ 59% of fleets also provide the option to take cash allowance. ❑ 33% expect an increase in drivers opting out of the company car scheme.
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Market Direction
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Market direction / 12-month outlook - CAR Over half of the fleets expect their car fleet to remain the same, while 42% expect to increase their fleet as cash takers return to the car scheme. The construction and Transport sectors are likely to grow the fastest. 48% of fleets expect the supply chain to improve for car and van supply. Fleet growth predictions – car fleets, next 12 months 70.% Architecture / Construction / Building (37)
Heavy industries, Mining / Engineering / Other industries (30)
IT / Software / Leisure / Media (82)
Transport / Communications / Distribution (107)
Wholesale / Retail / Food / Medical (48)
Business Services (35)
Increase
65%
40%
67%
76%
63%
63%
Stay the same
30%
50%
29%
22%
29%
34%
Decrease
5%
10%
4%
3%
8%
3%
60.% 50.% 40.% 30.%
20.% 10.% 0.% Total Car & Van fleets
6-25 cars Smaller
26 - 99 cars The same
100+ cars
Larger
Q - Do you expect your CAR fleet to be larger, smaller or the same in 12 months than it is today?,
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Finance and acquisition direction - CAR 1 in 2 Fleets predicts using Contract Hire or Finance Lease to fund their cars in the next 12 months. However, interest in car subscriptions among SMEs is significant. Finance method (6+ car fleets / n= 398)
1% 16% 34%
Outright purchase Contract hire / Operating lease Finance Lease
24%
Car subscription
Other
26%
Q - What do you expect your main finance method to be for any new CAR acquisitions over the next 12 months?
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Powertrain direction - CAR Fleets predict that 23% of their new car orders will be electric, with the momentum indicating overtaking petrol by wave 3 (Q3 2023). 35% of fleets have a CO2 cap of less than 100 g/km
Fleet orders by powertrain - next 12 months Wave 1 vs. wave 2
CO2 cap on future orders
30.0
(6+ car fleets / n= 400) Petrol, 24.4
25.0
Electric, 23.1
Diesel, 21.5
15%
16%
20.0
Zero emissions vehicles only
Hybrid, 15.6
Less than 100 g/km
Plug-in Hybrid, 14.2
15.0
17%
20%
Up to 150 g/km
10.0
up to 200g/km 5.0
No CO2 cap Other, 1.3
33%
0.0 Diesel
Petrol
Hybrid
Wave 1
Plug-in Hybrid
Electric
Other
Wave 2
Q - Do you have a CO2 cap on future new CAR orders being placed? Q - What proportion of any new CAR acquisitions over the next 12 months do you expect to be fuelled by the following?
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EV adoption timeline – the first 50% of fleet cars vs. vans Over 80% of fleets expect at least 50% of their fleet to be electrified by 2030. 2025 is a significant milestone, with 26% of van fleets predicting to reach the tipping point. EV adoption timeline
EV adoption - vans by fleet size bandings
30.0%
35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
25.0%
20.0%
15.0%
6-25 vans
26 - 99 vans
100+ vans
10.0%
5.0%
0.0% 2023
2024
2025
2026
2027
2028
2029
Car fleets
2030
2031
2032
2033
2034
2035
2036 - 2040
Van fleets
Q - In what year do you expect 50% of your fleet to be electrified?
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Change indicators – CAR fleet interest in alternative funding solutions Fleets are interested in several alternative funding solutions, with car subscriptions, salary sacrifice schemes, flexible solutions, and mobility allowances generating significant interest. Car fleet market indicators (6+ car fleets / n= 400)
Will explore other modes of travel and/or offer a mobility allowance
9%
Will move from fixed term leases to more flexible solutions
7%
35%
53%
44%
44%
Will introduce a car salary sacrifice scheme
11%
34%
48%
Will use car subscription services
12%
35%
47%
Will be ordering more cars on short-term lease
11%
40%
42%
Not likely (-1)
Likely (1)
Not at all likely (-2)
Very likely (2)
Q - Thinking about your CAR fleet over the next 12 months, how likely is it that you …?
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Agency sales model Just one-third of fleets are fully aware of the Agency Sales Model, with 60% aware but with little or limited knowledge. SMEs are less likely to be aware and knowledgeable. Fleet size bandings
Awareness of Agency Sales Model (6+car fleets / n=400) I had not heard about it before today
10%
I have heard of it but don't know much about it
32%
6-26 cars (160)
26 – 99 cars (112)
100+ cars (128)
14%
5%
8%
40%
29%
23%
I have heard of it and know a little
30%
30%
32%
28%
I am fully aware of it and how it works
29%
16%
34%
41%
Q - Which of the following best describes your awareness of the Agency Sales Model?
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Company car driver profiles and options
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Perk v Business need cars 64% of company cars are ‘business need’, leaving one-third with the potential to opt out of the fleet if the car choice list is no longer attractive. Perk v Business need cars (6+ car fleets / n= 400)
34%
Architecture / Construction / Building (37)
Heavy industries, Mining / Engineering / Other industries (30)
IT / Software / Leisure / Media (82)
Transport / Communicat ions / Distribution (107)
Wholesale / Retail / Food / Medical (48)
Business Services (35)
Business need
67%
74%
62%
64%
66%
70%
Perk
33%
26%
38%
36%
34%
30%
Perk
Business need
66%
Q - What proportion of your fleet CARS are essential/business need cars and how many are provided as a perk?
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Options offered to perk and business need drivers Perk car drivers are more likely to have access to an electric car through their choice list or via trading up. 59% of fleets also provide the option to take cash allowance.
59%
The option to take a cash allowance in lieu of a company car
41%
54%
The option to take a trade up
49%
54%
The option of an electric car on their choice list
None of the these
48%
8% 12%
Perk drivers (330)
Business needs drivers (394)
Q - Which of the following do you provide your business need or perk drivers?
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Cash allowance takers – a slight increase in perk car drivers exiting fleet 51% of fleets expect cash allowance uptake to remain the same, however, 33% expect an increase in drivers opting out of the company car scheme.
Change in PERK drivers TAKING cash allowance Do not offer option
Decrease
Remain the same
Increase
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
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Fleet choice requirements for EVs The importance of offering models with a good range performance, competitive lease rates and charging support are key to inclusion on the EV choice list. Fleet choice list requirements for EVs Ranked 1st, 2nd, 3rd Offer models with better range performance between charging than established rivals
17%
12%
Offer competitive lease rates
16%
11%
14%
57%
Average score (max 2)
1.34
11%
62%
1.23
13%
61%
1.11
Support your charging needs at home and on the go
10%
16%
Have an established dealer network
11%
11%
11%
68%
0.98
Offer models with better specification than established rivals
10%
11%
11%
68%
0.93
Good aftersales service
9%
12%
12%
68%
0.92
Offer an extended demonstrator programme
9%
12%
9%
70%
0.90
Have competitive RV forecasts from CAP/Glass's
9%
10%
9%
73%
0.81
Strong account management support
10%
7%
10%
73%
0.79
Rank 1 (5)
Rank 2 (3)
Rank 3 (1)
Not ranked (0)
Q - What would a CAR manufacturer need to provide in order to convince you to include their electric vehicles on your choice list and/or place an order? Rank top 3 n = 400
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EV Car model appraisal criteria Average score (max 2)
EV Car model appraisal criteria Face-to-face meeting with a manufacturer
7%
53%
39%
Demonstrator/test drive vehicles
7%
53%
39%
1.23
Fleet/business section of the manufacturer website
6%
52%
40%
1.22
Reading independent car reviews
8%
52%
39%
Watching independent car reviews
10%
51%
38%
1.14
Dealer visits
11%
53%
36%
1.13
Ride and Drive events
13%
50%
35%
1.05
Zoom/Teams call with the car manufacturer
14%
49%
36%
1.02
Not at all important
Not important
Important
1.23
1.19
Very important
Q - How important are the following when apprising a new EV Car model for your choice list? (Scale of 1 – 4) n = 400
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Electric vehicle charging trends ▪
71% of fleets intend to invest in workplace charge points; the three-year trend is remarkably consistent, with those businesses that do not own their premises or have no intention of adopting EVs just yet, likely to be left behind.
▪
Public charging may loom large in fleet operator imagination, but in practice is only moderately used. Only 4% of fleets rely on public charging for more than a quarter of their total charging needs.
▪
Employers are putting in place procedures to help their company car drivers install a home charger, with 68% of fleets operating either a recommended or nominated supplier list. When looking for outside help, fleets are significantly more likely to look to their leasing company to oversee the installation of domestic charge points rather than vehicle manufacturers or dealers, despite the fact that some may include chargers with each new EVs.
▪
59% of fleets that lease would like the cost of the home charger bundled into the lease.
▪
The additional administrative complications of paying for EV charging mean 41% of fleets want a payment solution to consolidate expenditure into a single invoice.
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• Summary and next steps
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Summary Fleets are demonstrating confidence in their growth outlook and were largely confident in meeting the 2030 deadline on the ban of new petrol and diesel vans, prior to the announcement to delay this. Fleets are actively pursuing electric cars, with 80% expecting to have at least 50% of their fleet by 2030. Fleet decision-makers also seek flexible options to access cars, including car subscriptions; however, as OEMs evolve how they sell cars through their dealer network, more awareness of the agency model needs to be. The recent decline in the tax-paying company car parc is set to reverse as cash allowance drivers return to the company car scheme. Fleets are also interested in exploring Salary Sacrifice Schemes to capitalise on the BIK Tax certainly through to 2028.
The fleet supply chain can do more to support fleets, including providing solutions for EV payments and bundling home charging costs into the lease. Education on the Total Cost of Ownership Model and informing car fleet policies are easy wins. The Fleet Outlook Report tracks fleet priorities, and the insights inform proposition development, resourcing, targeting, and communications.
Next steps Review the key findings and share them with the leadership team. Overlay the fleet priorities with strategic priorities to reinforce the business case. Proposition development, review any plans in line with the car and van outlook report. Identify processes that may require attention to help reflect the changing needs of van fleets, specifically: CRM – prioritise activities with fleets most likely to invest in core products and services. Training – ensure that knowledge levels on electric vehicles are high; this will inspire confidence in future engagement. Align communications plans with the latest Fleet Media Tracker trends to increase your brand awareness score. Available from #FleetTrends Measure your brand health using #FleetTrends Brand Tracker Subscribe and incorporate data into financial metrics. Insights correct at publication. Warning: these insights are commercially sensitive and are not for sharing outside of your organisation unless permission is granted in writing.
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Insights from 360 Media Group
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Research & Insights available from 360 Media Group
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Fleet Outlook is updated twice yearly.
Access to market trends, brand health, and buying influences are available from 360 Media Group Ltd. For more information, please contact ian.richardson@360mediagroupltd.com You can sponsor questions on our next survey https://meetings.hubspot.com/ian-richardson2 Follow #fleettrends
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Fleet Outlook Report 2023 Contact us
360 Media Group Ltd 01780 678484 Ian.richardson@360mediagroupltd.com www.360mediagroupltd.com
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