Businesses are uncertain about the future and have little desire to move to EV

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Businesses are uncertain about the future and have little desire to move to EV

As part of a recent study, Right Fuel Card asked customers from a range of industries what their views were about several fuel-related topics to gain a greater insight into how their businesses are faring in the current climate and understand their plans for the future.

The survey revealed a wide mix in confidence for the next 12 months depending on the industry, with transport-related businesses including haulage and courier firms much less positive than construction and engineering.

All industries seem to agree, however, that moving to EV was out of scope within the 12 months despite it being a hot topic.

Businesses are expecting a tough year ahead

The last few years have been challenging for us all, with the outbreak of COVID-19, the HGV driver shortage and now the record-breaking fuel prices all taking their toll on businesses and individuals alike. These events have all had an impact on how positive our customers feel about their business as many have growing concerns about what the future holds.

When asked, “how positive do you feel about your business over the next 12 months” we received a largely negative response. Over half of the responses from taxi and limo firms state that they’re not positive about the next 12 months and less than 1 in 5 haulage and transport firms we surveyed feel optimistic about the future.

On the other hand, the building, construction, and engineering industry is far more confident with 45% stating that they felt positive or very positive about the next 12 months. The construction sector has seen growth over the past few years, with rises in both commercial and residential building activity.

Given the challenges already outlined, plus the cost of living crisis, it’s not particularly surprising that many industries are pessimistic about the future as many are still facing long-term challenges that can threaten the success of their business. We will be discussing this further sometime soon, as we’ll analyse each industry individually and take a more in-depth look at their responses to this survey.

Most businesses are not looking to adopt EV technology

With the sale of new petrol and diesel cars set to be banned after 2030, there is a lot of media buzz around the switch to green alternative fuels such as electric and hydrogen. Whilst many large businesses such as Amazon have started to switch their fleet to electric, others find that the barriers are still too high. An overwhelming 98% of respondents stated that they had no intention to move to EV in the next 12 months.

Darren Riva has recently commented in Automotive Management (July 2022 edition) that large corporates are currently focusing on carbon reduction.  However, our data suggests this is not the case with small businesses where cost and time and still more important.

The main challenges of moving to EV technology raised by respondents included:

  • Increased cost
  • Lack of accessible charging points
  • Limited range
  • Length of time needed to charge

The significance of these challenges varies depending on the industry, but the largest prohibiting factor overall was cost. Although EV vehicles are cheaper to maintain and insure, the initial purchase costs discourage businesses from making the switch as they’re significantly more expensive to buy.

Businesses that frequently travel long distances will also face increased costs as overnight stays may be required due to the limited range of EV vehicles. We have previously demonstrated the cost implications of an EV vehicle when we investigated how much you’d need to pay to travel from Lands’ End to John O’Groats in an EV compared to travelling in a diesel vehicle.

In addition, the time needed to charge EV vehicles is a significant barrier for our customers, particularly those in the haulage and transport industry plus taxi and limousines firms. As these businesses tend to work on the clock, they risk losing profits if they need to spend a minimum of 30 minutes to recharge every hundred or so miles. The limited range of EV vehicles is also off-putting for businesses, especially for those that are regularly on the move, such as couriers.

Impact of the red diesel changes on businesses

Since April 1st 2022, the entitlement to use rebated red diesel has been removed for most sectors, including construction. The goal of this initiative was to help reduce harmful greenhouse gases and encourage businesses to adopt low-carbon red diesel alternatives, such as EV technology. In practice, however, many businesses are now using white diesel as a substitute which is more expensive to purchase and just as harmful to the environment as red diesel. 

In this survey, we asked our customers if they believed the change in red diesel entitlement would encourage the affected sectors to use more electric vehicles or just lead to higher costs. Most of our respondents claimed that these changes were responsible for increasing fuel costs and only 29% believe it will help with EV adoption. The agriculture and farming industry also have concerns about the rise of damage and theft due to these changes.

Across all the industries we surveyed, there were growing concerns about what the future holds for their businesses. Increased costs and fewer business opportunities are causing many businesses to see a reduction in their profits, making them apprehensive about the next 12 months. Switching to electric vehicles seems unlikely for many businesses as there are significant challenges which are preventing their widespread implementation, such as their limited driving range. The changes to the red diesel entitlement have negatively impacted various sectors that are now struggling with increased fuel costs amid the current cost-of-living crisis.

However, Right Fuel Card can help to ease the burden of increased fuel costs as we offer a wide range of fuel cards that are designed to help save you time and money. Explore our selection of fuel cards using our quick comparison tool, or alternatively, you can contact our team at 0113 202 5110 so we can discuss your options further.

Notes: The survey was conducted in June 2022, receiving 1156 responses.

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