The demonization of diesel is a hot topic in the news and as such diesel vehicles are likely to attract some negative legislation in the coming years. Despite being promoted and incentivised, new data and the illegal practices of certain vehicle manufacturers has turned the tide against diesel vehicles. For many this will mean a devaluation of vehicles and increased costs, but for big businesses with big fleets it could be devastating. Here we explore whether you should begin to phase out your diesel fleet vehicles.
The worst case
The worst case scenario for big businesses is that the government decides to tax or otherwise penalise companies for using diesel vehicles that they have previously been incentivised to get. A tax of 1p per mile or litre could massively increase vehicle costs for big businesses that already carry the costs of maintenance, fleet insurance, HGV insurance and fuel.
Devaluing the vehicles
Potentially more significantly than increased costs, however, is the potential devaluation of diesel vehicles. If the cost to run diesel vehicles increases then it is likely that the value of these vehicles will drop in comparison to the market. For companies with 50 or even 250 fleet vehicles this shift could be a huge hit on the asset value of the company.
Making a phased change
No one will want to make a wholesale change to vehicles in the fleet, but it is now worth considering making a phased change to vehicles with alternative fuelling. Doing so now, before legislation forces you to do so rapidly, could be a step that saves you in the long run. A recent survey found that 62% of companies are looking to make a phased move away from diesel since it’s demonization in the media.
There is no doubt that diesel has fallen from grace and there is now a potential that business owners are going to be the ones left to pay for the mistaken incentivisation of diesel vehicles. Act now to protect yourself from loses as the diesel vehicle is vilified and taxed. Beginning a phased transition to alternatively fuelled vehicles today could help you to save in the long run.