New incentives for electric vans are “critical” to the transition to a zero-emissions economy

Stimulating demand for electric vans must be part of government plans to help the car industry meet its zero-emission vehicle (ZEV) targets, the Association of Fleet Professionals (AFP) has warned.

Ministers met with car manufacturers this week for key discussions on the ZEV mandate and plans to stop selling new internal combustion engine (ICE) vehicles from 2030.

Following the meeting with manufacturers, the company reiterated its commitment to the 2030 phase-out date for “cars powered exclusively by internal combustion engines” and to “transform the ZEV transition in a way that also supports economic growth in the UK.” , adding that there will be further clarification details in due course.

There was no mention of vans, but again a clear indication that some hybrid technologies will be permitted, as previously announced Fleet News.

The ZEV mandate requires that more than a fifth (22%) of cars sold by manufacturers and 10% of vans sold by manufacturers this year must be electric.

With a view to the phase-out date for petrol and diesel vehicles in 2030, the targets are becoming stricter every year.

While nearly 300,000 new electric vehicles hit the road in 2024, this represents 18.1% of the market, according to trade body SMMT – an increase on 2023, but still well below the 22% target for this year and the 28% which must be achieved in 2025 as part of the ZEV mandate.

All-electric vans now have a market share of 5.6% – significantly less than the 10% required by the end of the year.

AFP chairman Paul Hollick said that “flexibilities” reportedly being considered by the Department for Transport (DfT) – such as taking manufacturers’ factory emissions into account or including exported UK-made vehicles in the balance sheet – would not help promote van fleets should be electrified.

“The Van Plan we launched with the BVRLA and other parties a few months ago outlined the demand issues behind the slow uptake of electric vans – inadequate public and private charging infrastructure, regulatory barriers and affordability and availability suitable products,” he added.

“The problem with electric van sales is not so much that they are lower than expected, as seen in the electric car market, but that they appear to have stalled around the 5% mark overall.”

“Fleets are virtually refusing to buy them for practical reasons, and forcing manufacturers to produce a higher percentage of vehicles under the ZEV mandate does not solve this core problem.”

He continued: “From reports of recent meetings, they appear to be approaching their rethinking from the perspective of helping manufacturers offset limited demand, rather than finding ways to dramatically encourage fleets to buy.” We believe this will create an untenable situation.”

The AFP argues that only a gradual change in technology that improves the range and payload problems of electric vans would address the fleet’s key objections, so potential government action would instead lie in areas such as infrastructure, regulation and financial incentives.

“Again, as mentioned in the Van plan, we need to find ways to quickly make more chargers with cheap electricity available in more places and more accessible to vans, as well as the ongoing issues surrounding the licensing and operation of 4.25 -ton transporters,” said Hollick.

“Improving these scenarios would potentially provide at least some stimulus.”

Hollick believes a similar carrot to low tax rates on company cars may be necessary for electric vans to create the kind of momentum the government wants to see.

“Companies may need to receive a real financial benefit to offset the operational issues they face associated with electric vans,” he said.

The government announced in the autumn budget that it will provide £120 million in 2025/26 to support the purchase of new electric vans through the plug-in vehicle grant.

Hollick concluded: “We are currently in a situation where it appears that many fleets, having discovered during the pandemic that they can practically extend replacement cycles by several years, are planning to hold on to the existing diesel vans until “The situation with electric vans is improving.” .

“It only makes limited sense to push more and more production volumes into a market where this attitude prevails.”