Changes that will affect the Fleet industry in 2021

2021 road

2020 was a challenging year for many industries, and it certainly paved the way for some of the trends which will be present this year. The combination of the global pandemic, EU exit, introduction of new regulations, innovations and stricter requirements have shaped a ‘’new norm’’.

Looking ahead in 2021, there are a number of changes to be aware of, necessary to maximise the efficiency and productivity of your fleet.

The Covid-19 pandemic still continues to provide challenges to fleets and operators within the industry, while the government looks to manage the infection rate across the country with different measures. Vehicle safety might be one of the challenges, as many cars might be unused or uninspected for a long period of time due to a decline in business travelling. Furthermore, many businesses had to adapt to managing their fleets remotely, which brought further implications.

Some other trends such as online shopping are likely to persist even after Covid-19. Increasing number of deliveries, means a need for greater number of vehicles. With this in mind, the implementation of effective health and safety measures should be a priority, in order to protect drivers, as well as the public at large. On the other hand, grey fleet activity is also growing, due to the risk of Covid-19 associated infection, which can contribute to additional fleet management responsibility. Grey fleet vehicles should be closely monitored by fleet managers, in the same way as company vehicles.

Needless to say, Covid-19 pandemic is shaping a new management approach for the fleet industry. The Fleet Industry Advisory Group (FIAG) Chairman Ian Housley has emphasized on the importance of ensuring best practice processes covering drivers, journeys and vehicles, necessary for post pandemic future.

As of 1st January 2021, the UK is no longer a member of the European Union (EU). After months of negotiations, an agreement was reached which proposed changes affecting the relationship between the UK and EU countries. Below, we summarised some of the highlights and the affects starting from January 2021 onwards:

  • Trade

The UK and the EU have reached an agreement allowing zero tariffs and zero quotas, in order to preserve the benefit of free trade. This being said, the fleet industry is unlikely to be affected by significant increase in manufacturer pricing. However, businesses should be prepared for an increasing volumes in paperwork due to the new procedures and formalities, required when importing or exporting goods. Stricter border control is also expected and as a results, delays are likely to occur.

  • Driving in EU

After 31 December 2020, the UK is no longer part of the EU, meaning that the rules on driving in EU have changed. To find out more information, read our article EU Exit: Driving in Europe in 2021

  • EU Emission targets

Although, the stricter emission targets set by the EU have already been phased in, as of 2021 they will apply to all registrations. On a positive note, more EVs will become available at more affordable rate, however there are some concerns in regard to the supply chain.

Despite the global pandemic, a vast range of Electric Vehicles (EVs) were introduced on the market last year. In 2021, the EV fleet is to expand further as many companies, as well as the UK government are working towards the adaptation of more EVs, in order to meet the increasing emissions rules.  Furthermore, as of 2030 new vehicles powered wholly by diesel and petrol will no longer sold in the UK.

There are a number of challenges which are important to be addressed. Securing charging points needs to be on the fleet managers’ agenda, as it is key to EV adoption. In addition, the emerging home based offices, increase the need for domestic charging facilities. With this in mind, there might be an increase of reimbursement costs for electricity .Challenging the perception of affordability as well as how the battery wear will affect the value of the vehicle, remain some of the biggest obstacles associated with EV adoption.

Plug-in Hybrid Electric Vehicles (PHEVs) are another alternative for fleet managers to consider, offering a greater driving range. Reviewing your fleet list and switching to Ultra Low Emission Vehicles (ULEVs) or EVs today can help fleets moving quicker towards a more sustainable future and long-term cost reduction.

The Ultra-Low Emissions Zones (ULEZ) were launched in London on 08 April 2019, setting ambitious towards the improvement of the air quality. The UK Government has a long-term strategy to reduce air pollution, which remains the largest environmental risk to health for Londoners.

On 25th October 2021, the central London ULEZ is expanding to include up to the North Circular Road (A406) and South Circular Road (A205), with the North and South Circular Roads themselves not in the zone.

The expanded ULEZ will continue to operate 24/7, including weekends (other than Christmas Eve).If the vehicle doesn’t meet the emission standards (to check if your vehicle meets the requirements click here) a daily charge of £12.50 (cars, smaller vans, motorbikes and other lighter vehicles) and £100 (busses, lorries, coaches and other heavy vehicles ) needs to be paid.

All electric vehicles are exempt from ULEZ, as they don’t generate toxic emissions.

For more details, read our article The Ultra Low Emission Zone is expanding on 25 October 2021

In 2020 the UK Government announced that company car drivers who choose an EV will be taxed at 0% rate BIK in 2020/2021.  As of April 2021, the percentage will increase from 0% to 1%, followed by 2% in 2022/2023 and will remain frozen in 2023/2024 and 2024/2025.

To estimate the tax you might be paying click here.

In order to sustain stability, adaptation to the present environment through innovation is crucial. Technological enhancements can help your fleet improve its efficiency and productivity. A great example is the telematics technology, which enables real time updates on deliveries, arrival times and verification of personnel’s movements. Other examples including GPS systems, self-driving vehicles, connectivity systems, to name a few, are showing that the technology is gradually progressing. Upgrading your vehicles with the necessary technological improvements could play an important role to business continuity.

Mobility is a topic that has been around for a number of years, but the Covid-19 pandemic has highlighted for many fleets a need to look at business travel differently. In order to improve cost control and compliance, there has been an increase of fleet, travel and mobility management departments merging or working more closely together.

At the same time, new and existing mobility solutions are being introduced to the market which enable companies to consider alternative options to solve business travel requirements. From short term rental to car pooling or ride hailing, these solutions can provide viable additions or alternatives to traditional fleet methods.

Last year taught us that having an ability to adapt to new and challenging circumstances is critical. With Covid-19 concerns still being present, flexibility is important to move forward.