September 24, 2018

Confusion Leads To Companies Delaying Purchase Decisions

Confusion Leads To Companies Delaying Purchase Decisions

At CLM, we have seen many organisations struggling to get to grips with the everyday practicalities of running their fleet in the midst of the current debate and the rising confusion levels over the most appropriate fuel types and CO2 emission levels.

Conflicting messages about the future of diesel, rising CO2 levels under the new WLTP emissions test and contradictory advice on how and when to introduce alternative fuel vehicles are all combining to delay companies from making new vehicle purchasing decisions.

When you’re trying to make sensible decisions about managing costs, keeping the business mobile and helping drivers to reduce their tax burden, it’s not helpful to have so much noise and conflicting advice.

Conflicting reports on emissions levels

We’ve noticed conflicting reports on the cleanliness of diesel in the fleet press in recent weeks – which are only serving to muddy the waters still further.

For example, according to findings from the International Council of Clean Transportation (ICCT) – the environmental group which exposed the Volkswagen scandal – all new diesel-engined cars fail to meet EU standards in real-world driving for NOx emissions.

In its research, the ICCT found four manufacturer groups had average emissions more than 12 times above the Euro 6 diesel type-approval limit, with the highest emitting vehicle family having emissions 18 times the limit.

Petrol cars fared better, however, said the ICCT, with all Euro 6 petrol models receiving a ‘good’ or ‘moderate’ rating, and the highest-emitting petrol Euro 6 vehicle family had approximately the same level of NOx emissions as the lowest-emitting diesel vehicle family.

The ICCT said it carried out emissions tests on more than 700,000 cars and 4,850 vehicle models across Europe, nearly all designed and built to Euro standards 3-6.

It produced a ratings system based on its own methodology, which involves passing a beam of light through a car’s exhaust emissions from a sampling location on the road. Automatic number plate recognition technology is used to determine which model of car is being tested.

The ICCT says this method of monitoring real-world vehicle pollutant emissions is difficult-to-impossible to cheat or game.

Other research at odds with findings

However, not all research findings on emissions are in accord with the ICCT study.

Emissions testing specialists, Emissions Analytics, for example, has revealed that its studies show the latest Euro 6d-Temp diesel models emit, on average, 71% less particulates than petrol equivalents and 18% less CO2 in real-world testing.

The organisation, which compiles the EQUA Index for emissions conformity, uses a Portable Emissions Measuring System (PEMS) that tests the actual tailpipe emissions on the road.

When looking at Nitrogen Oxide (NOx) specifically, Emissions Analytics found average emissions were 48mg/km, meaning the cleanest diesels were getting close to the average NOx emissions from new petrol vehicles, which is 36mg/km.

Even before RDE, Emissions Analytics found that at least 30 diesel models achieved real-world emissions of 80mg/km or less.

Emissions Analytics believes that in around 10 years the majority of diesels on the road are likely to be of the cleaner variety and that the current figures suggest a switch to petrol vehicles may not deliver the desired long-term air quality improvements.

It warns policy makers to be careful not to chase the past, but rather understand the models – with their emissions and fuel economy characteristics – that are already coming through, whether they are diesel, petrol, hybrid or electric.

VW backs diesels

Meanwhile, German manufacturer Volkswagen believes diesel will remain a key fleet fuel and an “indispensable” part of the air quality solution,

Speaking via a webinar to an audience of fleet decision-makers, a VW spokesman said the manufacturer was continuing to invest heavily in diesel.

However, VW is also spending some €50 billion on battery technology in the next two years and €20 billion on EVs, with an expectation that by 2021 plug-in vehicles will account for 10% of UK brand sales.

Amid “a lot of fuss in the press and chat around diesel”, VW’s investment in Euro 6 engine emission technology was  immense, the spokesman said, adding that while fleet fuels were seeing a shift towards battery EVs and plug-in hybrid EVs, diesel was still a huge part of the mix.

“The modern diesel engine is an indispensable part of the solution as it has improved dramatically over the years in terms of efficiency and environmental performance,” said the spokesman.

What’s CLM’s advice?

At CLM we have been working closely with our clients in an attempt to filter out some of this noise and ensure a clear focus on the fundamentals. These include an emphasis on whole life costs and ensuring that the right vehicles are selected for the right roles and journey patterns.

We firmly believe that whole life costs remain the key measure for any fleet and optimising this means taking a flexible approach to vehicle and fuel selection

From a vehicle acquisition perspective, this means shopping around for the best deal on each individual vehicle, otherwise you could end up paying too much for your chosen vehicle.

Offerings like our own Smartpanel funding solution allow you to select the leasing company with the best price for the vehicle in question, and keep your acquisition costs as low as possible.

However, running costs also vary across the fuel types, so it’s a matter of getting the calculations right based on mileage and how long you intend to run the vehicle. For this reason, we would never advise a client to, for example, switch away from diesels completely because for many situations these remain the most cost-effective choice.

If the nature of your business demands a large number of short, urban journeys, then plug-in hybrids or even pure EVs can be the perfect choice.

But if your fleet covers longer distances, and doesn’t have the opportunity for charging, then EVs simply aren’t an option and plug-in hybrids then become conventional vehicles carrying several hundred kilos of battery packs and electric motors.

By working closely with your fleet management partner, you should be able to assess journey patterns and crunch the numbers to determine the optimal vehicle mix for the business. We are not pretending this is rocket science but it’s surprising how many organisations are being poorly advised.

If you would like any more information on this subject, please don’t hesitate to get in touch.

To learn more about Alternative Fuel Vehicles click here to visit our dedicated AFV page