The following extract is from the Alphabet Fleet Report 2022 which unpacks some of the key trends from the last 12 months and focuses on what the industry can expect in the year to come.

With net zero deadlines on the horizon, low and zero-carbon approaches remain a priority for businesses as strategies focus on contributing to sustainability targets. As a result, huge strides have been made toward fleet electrification.

Alphabet’s new vehicle order figures show that year-to-date PHEV orders are almost level with petrol vehicles at 31% and 33% respectively. Confidence in pure electric technology has also grown with BEV popularity increasing by 19% year-on-year to represent 27% of all Alphabet new vehicle orders.

As the ever-changing economic circumstances have placed budgets under more pressure, salary sacrifice car schemes have been welcomed by both businesses and employees as an appealing, cost-efficient way for drivers to gain access to EVS.

The BVRLA reported that salary sacrifice volumes were up 33% year-on-year with much of this growth being driven by favourable benefit-in-kind (BIK) tax rates. Low BIK rates for zero-emission vehicles have resulted in BEV comprising over 80% of all new cars ordered through salary sacrifice schemes this year.

Electrification

This increase in EV demand is promising in the push towards electric, however there could be potential for the legislative changes revealed in autumn to slightly slow progress in 2023.

In the Autumn Statement, the Chancellor announced that EVs will no longer be exempt from vehicle excise duty (VED) from 2025. This could impact EV uptake as 2025 draws closer and businesses think about how they
accommodate this change.

The Autumn Statement also laid out that Benefit-In-Kind (BIK) tax rates will increase by one percentage point each year from 2025. While this could be deemed counterintuitive to further incentivising drivers to switch to EVs, it does provide much-needed clarity on BIK rates post-2025, enabling businesses to plan their future fleet strategies with more certainty.

We expect to see increased acceleration toward electric fleets as everyone works to meet both the 2030 deadline and wider business sustainability targets in the new year.

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