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Electric, shared and global: the future of fleets?

On 6 December, 600 fleet industry professionals gathered for the Fleet Europe Forum in Estoril, Portugal to explore the trends shaping the fleet and mobility professions of the future. We look at some of the hot topics discussed at the event.

Electric vehicles

With, transport today representing almost a quarter of Europe’s greenhouse gas emissions and being the main cause of air pollution in cities[1], it’s no surprise that electric vehicles (EVs) were a prominent topic discussed at the forum.

Following the COP 2020 Paris Agreement, which set out an aim to decrease Europe’s greenhouse gas emissions by 20% from 1990 levels by 2020, environmental issues have been shaping the development of new vehicle and fuel technologies and the mix used in fleets.

Norway, Sweden and Finland currently hold the largest market share in vehicles run on alternative fuels. Yet, almost half of all EU member states (13 in total) have an electrically-chargeable vehicle market share of 0.5% or lower[2].

But, according to Dataforce, a change in the mindset of the fleet industry towards electric vehicles has taken place in recent years. It revealed that a staggering 87% of fleets would change to an electric car if the range was available, with the majority of fleets stating that they would change to an e-car once its range reaches above 500km.

A number of companies have already committed to accelerating the transition to electric vehicles and making electric transport the new normal by 2030, with the EV100 initiative. The initiative highlights the importance of companies leading the shift to electric vehicles, as businesses own over half of all registered vehicles on the road.

Original Equipment Manufacturers (OEMs) are also preparing for a future where EVs are a significant part of the energy mix, with MINI, Mercedes-Benz and smart recently announcing the development of new electric vehicles. Mercedes-Benz has taken this one step further, announcing its plans to electrify all of their models in the next five years.

But the consensus from industry executives is that there are still a few stones left unturned for EV use in fleets. Until total cost of ownership of EVs is comparable with a combustion engine, the adoption of these vehicles is likely to be significantly hampered. There also needs to be further clarification for fleets that lease vehicles – what will happen to the battery after the first car lease?

Shared mobility

A dramatic evolution in shared mobility is also shaking up the fleet industry. It all began with one of the first ride-sharing services, Kutsuplus, being piloted in Helsinki in 2013, as part of a long-term plan to make cars irrelevant. Although this service ended up being disbanded at the end of 2015 for financial reasons, since then the sector has expanded rapidly across the globe.

Some of the most visible car sharing providers began in the United States with Uber and Lyft. Now Europe represents over 50% of the global car sharing markets with 5.8 million users and 68,000 cars[3].

The price focused propositions of ride-sharing and shared vehicle ownership services are appealing to a new audience, who otherwise wouldn’t be able to buy their own vehicles.

Currently, the level of passenger car ownership is still growing in Europe, but at a slower rate than in previous periods. From 2012 to 2005, passenger car ownership in the region increased by 6.7%, while from 2010 to 2015, it increased by 4.8%[4].

As we move to the next generation, industry executives expect to see a ripple effect in car sharing for corporate fleets, which will be made even more likely by the development of autonomous vehicles. This begs the question; could we also see a future in which ride sharing replaces public transport as we know it?

Internationalisation of the fleet industry

Around the world we are seeing an increase in ‘global’ fleet players. It was put to a panel of industry executives whether they could present a threat to Europe’s leading position in car manufacturing.

They were in agreement that varying market regulations will lead to a rise in the number of global businesses with local offerings and highlighted the importance of global companies sharing their knowledge around local regulation and taxation with their customers.

Recent years have also seen the advent of several new regional champions that provide fleet solutions, such as Grab and Didi Chuxing. It was put forward that Europe currently has a lack of strong regional players, potentially limiting the region’s competitive offering for fleets, and that perhaps we should be asking why these don’t currently exist.

It appears the globalisation of the fleet industry will only continue to grow. All of the companies represented emphasised the importance of expanding their fleet solutions into new markets in line with customer demand.

[1] https://ec.europa.eu/clima/policies/transport_en

[2] http://www.acea.be/statistics/article/interactive-map-correlation-between-uptake-of-electric-cars-and-gdp-in-EU

[3] https://www2.deloitte.com/content/dam/Deloitte/de/Documents/consumer-industrial-products/CIP-Automotive-Car-Sharing-in-Europe.pdf

[4] https://www.eea.europa.eu/data-and-maps/indicators/size-of-the-vehicle-fleet/size-of-the-vehicle-fleet-8

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