Cost advantages and lower environmental impact head the list of reasons why UK businesses are electrifying their company cars, research from the latest Arval Mobility Observatory Barometer shows.

The factors mentioned by fleet and mobility decision-makers in the research were topped by reduced fuel expenses (66% of those questioned – up from 54% in 2021) and, in second place, tax incentives (58% – up from 40% last year).

A lower environmental impact was third with 54%, total cost of ownership being lower than petrol or diesel vehicles at 41%, while improving the company image only at 37%, and being able to drive in low emissions zones at 33%, despite new cities and areas being added across the country.

Shaun Sadlier

Shaun Sadlier, head of Arval Mobility Observatory in the UK, said: “As net zero and other corporate environmental targets become increasingly common across organisations of all types and sizes, it is unsurprising to see reduced environmental impact as one of the leading reasons that fleets are electrifying. All kinds of non-ICE cars – hybrid, PHEV and pure EV – offer major gains in this area.

“However, it’s a sign of the times that cost advantages now account for the top two reasons mentioned by the decision makers surveyed. It clearly shows that as operational experience of electrified vehicles grows, fleets are increasingly knowledgeable about the real-world potential and financial benefits of their adoption.

“In fact, more than four out of 10 fleets now show an awareness that electrified choices offer a total cost of ownership in line or lower than petrol or diesel alternatives, a key point that is only likely to become more pertinent as oil prices continue to increase.

“Another factor that has seen considerable growth is that employees are increasingly pushing for electrified vehicle adoption, up to 42% in this edition of the research compared to 29% last year. Staff enthusiasm for electrification is a key enabler of rapid change in many organisations.”

The research also asked UK businesses which electrified form of power they had already adopted for their fleet and which they planned to adopt within the next three years. Currently, the most popular are hybrids (54% already adopted/68% adopted and planned), plug-in hybrids (44% against 63%) and battery electric vehicles (36% against 57%).

Shaun added: “These percentages represent nearly double the rate of adoption compared to the 19 other European countries that we survey, and it applies to all electrified cars and all rates of adoption. The UK is very much amongst the leaders on an international basis when it comes to car fleet electrification.”

Every year Arval Mobility Observatory conducts research in the fleet and mobility sectors. For the 2022 Barometer, Arval talked to decision-makers in 26 countries, with 20 in Europe.