Majority of larger businesses consider phasing out diesel

A significant majority of large business are considering a move away from diesel fuel, according to research from RAC Business.

In the survey of 1,000 firms, 62% of large businesses (those with 250-499 staff) are thinking about phasing out the fuel type. Notably, nearly half of all business (of any size) are also thinking about making this transition.

By comparison, only 33% of small firms (with fewer than 10 employees) are considering the same move. However, 35% of small businesses – with 2-50 employees – were still much more likely to choose diesel engines than any other vehicle type.

Concerns about the practicality of replacing diesel vehicles were highlighted in the survey, with 39% of respondents suggesting the vehicles they need are not provided as alternatively fuelled options. Among businesses with between 500 and 999 employees, however, 49% cited this as a key issue.

Where 30% of all business cited a lack of confidence in electric vehicle (EV) range capabilities as a major concern, this increased to 40% among firms with 500-999 employees.

Over one third of businesses surveyed suggested that a lack of available funds to buy brand new diesel vehicles was a major obstacle. Among sole traders, this figure rises dramatically to 58%.

The findings corroborate the idea that demonization of diesel in recent years has had a substantial effect, in combination with Society of Motor Manufacturers and Traders (SMMT) figures showing a 17.1% drop in diesel sales during 2017.

RAC Fuel Watch spokesman Simon Williams, however, suggests that some of the problems cited in the survey are misplaced. Many contemporary diesel vehicles, for instance, far exceed their predecessors (including older petrol vehicles) in their performance and lower emissions levels.

Williams said: “During 2017 there was a lot of debate about emissions from diesel vehicles being harmful to health and the possibility of charges being introduced for certain vehicles in some cities to combat the issue. This has undoubtedly affected attitudes among consumers and fleets and left them uncertain as to what type of vehicle to choose next.

“However, what isn’t that well understood is that the newest diesel vehicles coming onto the market now are among the cleanest ever produced and also emit far less carbon dioxide than their petrol equivalents.

“Diesel engines have always been the go-to vehicle for businesses due to their superior fuel economy, their longer engine life and their ability to move heavier loads making them more cost-effective and practical.

“If businesses are now making a switch to other types of vehicles based on anti-diesel sentiment, which may not have been entirely accurate when it comes to the latest vans and cars, they risk losing out on that cost benefit.”

Manufacturers have been gradually introducing electric and hybrid vehicles into their commercial ranges in recent years, offering clear benefits regarding fuel cost reductions or congestion charge avoidance in London for example.

For 45% of small businesses surveyed, however, the main barrier to switching from diesel is the upfront cost of a brand new electric replacement. Until advanced electric cars and vans enter the used vehicle network, they are likely to remain out of reach for many smaller organisations.

Notably, concerns about a lack of EV charging infrastructure in the UK remains a significant barrier for 22% of all businesses surveyed.

Williams added: “Our research also tells us almost three quarters of small businesses own their vehicles outright, and only refresh their fleet every two to three years, so it’s going to be some time before the latest EVs are available through used dealer networks.

“However, we all recognise that it’s high time to remove the most polluting vehicles from our roads, and older diesel vehicles fall into this category.

“We feel one of the best ways for the Government to encourage the take-up of ultra-low emission vehicles is by offering more support for plug-in hybrids, as these vehicles would then start to feed into the second-hand market and we would see a lot more of these vehicles on the roads.

“Every year technology and capability improves in electric vehicles and they will form a much larger part of the commercial vehicle fleet in years to come. But we would certainly echo concerns around the charging infrastructure and it should be a top priority for the Government if they are serious about increasing the number of EVs on the roads and being used by businesses.”