Comment: The state of the eLCV market in 2022

Matt Dillon, head of commercial vehicles at LeasePlan UK, gives a rundown of the current state of the eLCV market, so that fleet managers can keep their fingers on the pulse of everything from legislation to lead times for electric vans in the UK.

The UK’s transition to electric driving is in full swing. Small and large businesses alike have begun the process of electrifying their fleets, and for many, that includes vans. 

The van market has undergone significant changes since the start of the country’s electrification plans and announcement of the 2030 ban on the sale of new ICE vehicles. The numbers don’t lie: as of March 2022, battery-electric vehicles account for 5.8% of van registrations across the country, compared to 2.6% in March of 2021.  

There are many reasons for this change to the eLCV market. The introduction of Clean Air Zones has brought electric driving to the forefront for those fleets operating in larger cities, while the prevalence of Environmental, Social, and Governance (ESG) reporting has businesses re-assessing their sustainability plans. Financially, Total Cost of Ownership (TCO) models reflect the increasing cost-effectiveness of eLCVs – and grants from the Government make these vans even more accessible.  

Given the momentum behind van electrification, we can be confident that these trends will continue for the foreseeable future. Businesses will continue to transition their fleets and demand for eLCVs will only grow. So, it’s important that fleet managers keep their fingers on the pulse of the market to stay on track for their electrification targets. 

What’s changed?  

The eLCV market has overcome some major roadblocks in the past year. So, for businesses getting ready to transition to electric vans, there’s no time like the present. 

Firstly, electric vans are available in a greater range of sizes now than ever before. Initially, smaller eLCVs were more prevalent in the market; now, there are more medium and large van options available for those that require increased capacity and payload. This makes more vans capable of performing a more diverse range of jobs. What’s more, in many cases electric ranges have improved, which is helping to mitigate range anxiety for those fleets operators concerned with mileage capabilities.

Government incentives have also improved in the past year. Government grants for plug-in vans have recently been extended by two years, giving businesses more time to benefit from the grant ahead of the 2030 ban. 

Sustainability has become a major factor in business operations, and there is a growing momentum of consumer demand for transparency. More businesses are leading from the front and getting electric cars and vans on the road. This rapid adoption of electric vehicles within fleets drives the cost of doing nothing upwards: fleet-operating businesses need to have a plan to contend with their sustainably-minded competitors. As a result, demand for eLCVs has increased in the business sector.  

What fleet managers can do now 

Given so many improvements, some may say that the eLCV market has now reached its tipping point as the default van option. Realistically, there are still a number of things for fleet managers to consider when planning to electrify their vans – but there are also plenty of solutions. 

It’s all about planning and getting ahead of the business’s fleet needs. The first thing to consider is vehicle lead times: with the semiconductor shortage and other global events impacting eLCV manufacture, it can take a while for vehicles to be delivered. For businesses that have already decided on the right EVs for their needs, it’s worth ordering as soon as possible and using the lead time to finalise any remaining elements of the transition plan.

Charging infrastructure is a key factor for fleet-operating businesses looking to transition to eLCVs. Fleet managers have a lot to consider: is the current business location suitable for a depot charging solution? For those operating a return-to-home fleet, how many employees will be eligible for home charging? There can also be long lead times for charging infrastructure, which can impact a business’s ability to go electric. 

The best thing fleet managers can do is to invest the time into planning their eLCV charging strategy now. This way, if changes need to be made – like relocating or planning to install infrastructure – fleet managers will ensure they deliver an efficient charging solution for their operation.  

Fleet managers should also review their routes and operating models. Ideally, eLCVs should work into current operating models, but this isn’t always possible. So it’s best for fleet managers to review their operations and establish which vehicles can be transitioned now, and which may need to wait until more appropriate options are available.  

The future of the eLCV market  

Due to the incoming 2030 ban, the eLCV market is going to experience continued growth. But that’s not the only factor driving the market forward towards innovation and evolution. We’ve already seen the market share of electric vans increase significantly in the past year, and we can expect this momentum to continue. Regulations, shifting business priorities, and technology will all play a part in the future of the eLCV market. 

Success in business will rely more and more on environmental commitments and initiatives going forward. Winning business will become difficult without high-quality ESG reporting, due to shifting consumer priorities – and good ESG reports require lower tailpipe emissions. For van-operating businesses, a good decarbonisation strategy will become key to winning business, and EVs will play a significant role in achieving this.   

EV adoption has never been greater, or had more opportunity for growth. Ever-improving technology like telematics makes it easier for businesses to assess EV suitability and maximise the benefits of EVs in their fleet. There’s also a community element: we can expect the eLCVmarket to really hit its stride by 2025, as larger companies will have tested EV adoption and proven its efficiency for other smaller businesses. 

Within the market, we can expect more technological innovations and more model types going electric. For example, specialist vehicle operations such as ambulances are already on the radar.  With a greater variety of vehicle types and conversion options circulating the market, this will only drive eLCV uptake up even more. 

For fleet managers, the time to act on eLCV plans is now. There are still some challenges to navigate, but the market is active and technology is moving forward at pace to help more businesses transition to electric sooner. By planning ahead and developing a clean eLCV transition strategy, businesses can ensure that their fleets will continue to perform at their best, both for the business and for the environment.