Pressure grows for electric van incentives

Pressure is mounting on the Government to kick-start demand for electric vans by making cash incentives available to help fleets offset some of the acquisition cost.

This month Renault launches its Kangoo Z.E. (Zero Emission) electric van in the UK, following Mercedes-Benz with the Vito E-Cell and Iveco with its EcoDaily Electric.

Additionally, Britain’s largest van seller, Ford, has launched the Transit Electric Connect, which is sold exclusively through Ford-owned dealerships, following work by Azure Dynamics, the electric powertrain specialist behind the vehicle.

Meanwhile, a number of specialists including Smith Electric Vehicles and Allied Electric have a history of converting vans to run on electric power for fleet use.

The electric van market is in its infancy and figures from the Society of Motor Manufacturers and Traders reveal that just 24 electric vans were registered in the first nine months of 2011. These figures exclude aftermarket conversions.

Additionally, Department for Transport data reveals that in the first six months of this year there were 3,868 electric vehicles on the UK’s roads, of which 1,721 were milk floats. That compares with 3,861 and 1,759 respectively at the end of 2010.

Electric van costs and payload are two of the biggest issues facing fleet operators, with battery range the other influencing factor.

Earlier this year the Government launched an incentive scheme – the Plug-in Car Grant – which enabled businesses purchasing a qualifying ultra-low emission car to receive a grant of up to 25% towards the cost of the vehicle, up to a maximum of £5,000. However, take-up has been slow with less than 1,000 cars funded from a £43 million pot.

Electric vans are excluded from the scheme, which is currently being reviewed by ministers ahead of an early 2012 announcement on funding levels and qualifying vehicles post March next year.
Meanwhile, the Scottish Parliament recently unveiled £4.2m funding to encourage public bodies to replace conventionally-powered vehicles with low-carbon vehicles.

The cash help enables organisations to bridge the gap between the cost of petrol or diesel vehicles, including vans, and their electric equivalents thus making zero-emission models financially viable for local authorities and their community planning partners.

The new funding builds on around £4.3m made available last year, which has resulted in 145 low carbon vehicles being purchased by public sector bodies and the installation of a further 74 electric vehicle charging points.

Gary Whittam, European sales and market-ing director for Azure Dynamics, said the company was battling to keep up with demand for the Transit Connect Electric in Scotland, where the availability of ‘match-funding’ meant no price penalty for going zero emission.

The British Vehicle Leasing Association is also lobbying for financial help to encourage demand for electric vans.

Chief executive John Lewis said: “There is a lot the Government and manufacturers could do to help kick-start the market. The Government should divert some of the unspent money it had allocated to the Plug-in Grant scheme and use it to help small and medium-sized businesses make the shift to electric vans, where appropriate. Hopefully, manufacturers will also be lobbying on this.

“To make the financial case for electric vans work, fleets have to operate them for five or six years. This is a very long time period to take such a gamble, especially with the economic picture as uncertain as it is. A large financial incentive could make all the difference.”

An SMMT spokesman said: “We are talking to ministers about the Plug-in Grant scheme and are asking for it to be extended to cover vans – both those produced by manufacturers and converters.

“Electric vans are coming on to the market and there are more on the horizon so incentives will help fuel uptake.”

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