High oil price is the main catalyst for alternative fuel vehicle uptake says new research
Wed 16 May 2012
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A survey of 3,000 senior business executives has revealed that high oil prices are the principal driver behind the increasing interest in 'greening' corporate fleets. The study 'Greener fleets: businesses consider alternative fuel vehicles' by Grant Thornton, finds that about a quarter of business leaders have introduced, or are considering introducing, alternative fuel vehicles primarily in an attempt to mitigate the financial impacts of the price of oil.
Business Green reports that just under 70 per cent of respondents said the high oil price is the main reason for exploring alternative fuel options, while 62 per cent cited general cost management and 55 per cent highlighted tax breaks as also informing their decision.
However, businesses are also increasingly aware of the environmental impact of their fleets – 58 per cent listed 'saving the planet' as a driver. Those who had not considered green fleet options named high initial costs as the main reason for not doing so, followed by the difficulty of charging or refuelling electric, hydrogen, or natural gas vehicles.
In relation to the UK automotive market, the report finds it has remained relatively resilient through the recession, but continues to rely heavily on business and fleet transactions, typically accounting for around half of total vehicle registrations (but which rose to 58% in 2011).
Daniel Taylor, partner and head of automotive, Grant Thornton UK said: “Given the high cost of alternative-fuel vehicles, incentives will be a key driver of more widespread adoption, particularly given the strides in petrol and diesel efficiency – the market for alternative-fuel vehicles rose only slightly to 1.3% in 2011 despite several electric vehicle debuts.”
The study quotes JD Power data forecasts which show a trend toward alternative fuels in global sales of hybrid electric vehicles and battery electric vehicles, projected to reach 5.4 million vehicles by 2021 (more than 6% of the market share), up from 810,000 vehicles in 2010 ( 2% share). Asia is currently the largest market for hybrids/electrics (56%), followed by North America (32%) and Europe (13%). Europe and China shares of hybrids/electrics are projected to increase substantially by 2021.
The research data are drawn from 6,000 interviews with business leaders conducted between November 2011 and February 2012.
The report coincides with a warning from the International Monetary Fund's (IMF) that there could be a permanent doubling of oil prices by 2022. The IMF report cautions "This is uncharted territory for the world economy, which has never experienced such prices for more than a few months."
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