Fuel for thought – the right strategy for your fleet
As alternative types of fuel flood the market, more thought needs to go into understanding your fleets’ needs …but how do you identify the right fuel for the job?
The drive to develop and utilise more sustainable and cost-effective vehicles has led to greater choices, especially when it comes to engine and drivetrain options …and there’s a lot of factors to consider.
But what’s the most effective strategy for your fleet?
Put simply, there is no simple or single answer to this question, but a comprehensive selection strategy can help you make a much more informed choice.
Among the vast amount of data that’s often generated by modern vehicles, it’s important to build the following considerations into your final fuel-selection equation:
Efficiency and sustainability
Tax implications and incentives
Current and proposed legislation
To help you understand the importance of implementing a fuel selection strategy and current options on the market, we have compiled a short guide.
The Who, What, When, Where and Why of Fuel Selection
First things first, you need to compare how different types of fuel can help to meet your specific business needs, however, in order to do so you need to understand the purpose of each individual vehicle. Ask yourself:
Paying close attention to the above factors and building this information into your selection strategy will, in turn, help to manage fuel usage and realise the best return on investment.
Ultimately, your fleet needs to be fit for purpose, and a ‘one-size-fits-all’ strategy is no longer a viable option.
Stay Ahead of the Curve
In order to anticipate fuel and maintenance expenses for each type of powertrain, it’s essential to build a Total Cost of Ownership (TCO) model.
Vehicle usage and the availability of alternative fuels can also significantly impact your TCO, so be sure to add the below factors into your fuel-selection equation:
Fuel Economy – this can vary substantially depending how and where vehicles are driven. You may find that a vehicle that performs well in one region or part of your operation may perform at a completely different level in another – which, in turn, makes it difficult to make fuel savings.
Emissions – control over emissions can be a good way to show how serious your operation is about sustainability. Fleets are under increasing pressure to be more environmentally friendly, so taking steps to measure and reduce emissions through proactive selection of fuel types can add significant value.
Regulations – in some jurisdictions, it’s necessary to encourage or prohibit fuel types or vehicles based on their environmental performance. Make sure you understand how the types of fuel that work best for your operation fit in with current and future regulatory activity.
Complete and accurate mileage, mpg figures and fuel data is key to making informed decisions and, in order to generate realistic expectations, it’s sensible to use intelligence that has been generated by your existing fleet.
Statistically speaking, mpg figures and emission reports are manipulated by around 30% when comparing real life statistics with those presented by manufacturers, so it’s best to build your TCO model based on reliable and trustworthy figures.
Types of Fuel Uncovered:
So it’s decision time, and you’ve already considered the driver, the vehicles purpose, duration of use, drive locations and TCO …but it’s also important to consider the pros and cons of each individual fuel type – and there are a lot of options available on the market!
Let’s look at the four most popular fuel types currently available on the market:
Petrol-powered vehicles are often the least expensive to purchase outright, and this fuel type also tends to be cheaper at the pump, not to mention widely available …but despite these two powerful and hard-to-ignore advantages, petrol-powered vehicles tend to be less fuel efficient than some other alternatives.
Also tipping the scale – but not affecting this fuel types popularity to any concerning degree – maintenance and repair costs tend to be higher, alongside depreciation rates.
Despite these facts, when interviewed, 58% drivers said the next car they purchase will be petrol-powered, with little change in numbers buying environmentally-friendly forms.
Once the most popular fuel type amongst UK drivers, diesel has come under a considerable amount of scrutiny in recent years, especially with regard to environmental performance and proposed legislation changes.
Despite this challenge, however, diesel remains one of the most utilised fuel types, something that can perhaps be attributed to TCO.
Stating that: “for as long as there is no other suitable, cost-effective and practical alternative, diesel powertrains will continue to play a vital role in the transportation of goods and people.”
Whilst it’s true that diesel vehicles are considerably more expensive to purchase outright, they often achieve better fuel economy than petrol. In fact, dependent on use, a diesel vehicle can achieve up to 30% more fuel economy than its petrol equivalent.
Diesel cars also retain more value and fetch lower repair and maintenance costs …so there is money to be saved here!
Despite these facts, a study conducted by the RAC found that the demand for diesel vehicles in 2017 declined significantly, with only 16% of respondents confirming they would still buy diesel, a decline of 28% when compared with the previous year.
Whilst diesel’s place as the UK’s number one fuel type is being disputed, it remains a competitive option in today’s increasingly crowded marketplace.
There are two main types of hybrid vehicle – Hybrid Electric Vehicles (HEVs) and Plug-In Hybrid Electric Vehicles (PHEVs). Both capture energy for their batteries through regenerative braking, and use the energy to provide power to the wheels. These vehicles achieve reduced emissions and higher fuel economy …but do still rely on power generated by either petrol or diesel.
In terms of initial purchase price, hybrids tend to be more expensive than conventional vehicles, but maintenance tends to be less frequent which can reduce downtime and associated costs.
Universally speaking, hybrid is increasingly becoming the third most popular fuelling method.
Electric vehicles (EVs) run 100% on electricity supplied from a rechargeable battery, offering a quiet, clean form of transport with a complete absence of tailpipe emissions. As a result, these fairly new additions to the automotive marketplace are strong contenders for local and urban operations.
EVs also have very low refuelling costs compared to conventional vehicles— by some estimates the cost-per-mile to fuel an EV represents approximately one-third to one-quarter the cost of conventional fuels, depending on electricity prices and the price of fuel at the pump.
Additionally, EVs require less maintenance than vehicles with internal combustion engines, but on the flip side driving range does tend to be limited as the need for regular recharging stops is a reality. For this reason, EVs are ideal for use on short trips and for driving in urban areas at this point.
Charging points for this type of vehicle are also few and far between, however, a significant amount of money is set to be invested into this area, with the UK’s latest budget revealing a confirmed £40m for research into charging; a £400m charging infrastructure fund and a £100m plug-in-car grant.
The best strategy for assessing fuel choices is to start by looking at the big picture, before drilling down into the many important aspects that need to be taken into account. Fuel economy, fuel costs, sustainability, initial prices, maintenance requirements, regulations and even resale values can all impact your choices.
Today you have more types of fuel than ever before, and with that comes an opportunity to drive down costs, make real improvements to your operation, and achieve long-term value in a number of areas.
It is believed that the UK’s ‘petrol versus diesel’ argument will soon level out, especially as more incentives to buy either hybrid or EV vehicles start to flood the market. Objectively speaking, demonising any fuel type at this point in time is the wrong approach, as it will generate erratic decisions when setting fleet policy.
So, there may be no simple or single answer to the question of which fuel type to use in your fleet, but without a comprehensive selection strategy, it is impossible to make an informed and effective choice.