Arval Mobility Observatory Fleet Barometer 2020: Telematics is mainstream now and EV growth potential is huge
“The biggest changes? The intention to implement alternative motorisations is huge. Telematics is increasing across the board: it's no longer coming trend. It is here. It is mainstream.” So says Yaël Bennathan, the Head of the Arval Mobility Observatory, comparing its 2020 Fleet Barometer – out today – with last year’s edition. We zoom in on four highlights.
But first, a word on the report itself. For this, the 16th annual edition, 5600 fleet managers were asked to forecast mobility trends. The interviews took place from January to mid-March 2020, so directly prior to the worst effects of the COVID-19 pandemic – not an issue, as the focus of the Barometer is, as always, on the middle and longer term. From 12 European countries last year, the scope was expanded to 20, this year also including the Nordics, Russia and Brazil, among others.
1. Electrification is accelerating everywhere
Overall, 61% of companies have already implemented alternatives to traditional ICEs – or are considering to do so within the next three years. “Both for cars and LCVs, the most popular alternatives are hybrids, followed by PHEVs and BEVs,” says Ms Bennathan. “The trend towards electrification is not new of course, but it’s much stronger now, accelerating across all countries.”
Two push factors for electrification: “OEMs are putting out more than 100 new electric models this year; and governments offer incentives for EVs – even increasing them as part of post-corona recovery packages, as in Germany and France, for instance.”
And one major pull factor: companies have internalised the need for electrification. “Asked why they already have or are considering electric cars, 41% say it’s to limit CO2 emissions, 33% to reduce fuel expenses and 30% to improve their corporate image. The results for LCVs are similar (respectively: 27%, 25% and 23%).”
Companies not yet on the EV bandwagon say price (54%) and a lack of public charging (51%) are the main obstacles for PHEVs (respectively 56% and 57% for BEVs). “Countries are working hard to improve infrastructure,” says Ms Bennathan. “Germany recently ordered each petrol station to have at least one EV charging point, and France wants to add to reach 100,000 points by the end of 2021.”
34% of companies have already implemented one or more of these alternative technologies in their energy mix. The most advanced countries in terms of ICE alternatives deployment are Brazil (49%), Norway (48%) and the Netherlands (47%).
In three years, diesel is anticipated to still represent nearly half of the fleet mix, petrol 29%. That means that by 2023, more than 20% of corporate vehicles will have alternative powertrains. Mainly electric – but not everywhere.
Take for instance Brazil’s high score: “A high percentage of companies have already implemented CNG and LPG in their fleets. But other countries too have important alternatives. In Poland, 23% of companies use LPG and 31% are considering to do so in the next three years. For Italy, those figures are 19% and 36%.”
Ms Yaël Bennathan, Head of the Arval Mobility Observatory (Image: Arval)
2. ‘Alternative’ mobility has gone mainstream
Alternative mobility solutions like corporate carsharing, ridesharing, bikesharing, mobility budgets and public transport are no longer the exception. They are now the rule – at least in terms of availability.
On average, 6 out of 10 companies have implemented alternative mobility solutions for their employees. In Brazil, Turkey, Austria and Belgium, that figure goes up to 7 out of 10. Remarkable by their lower than average scores: the Nordics, Poland, Germany and Spain.
“Of all companies surveyed, 64% have already implemented at least one mobility alternative – typically public transport (33%). Also popular: ridesharing (28%) and corporate carsharing (19%),” Ms Bennathan says. “Sharing may not be very popular in times where isolation is required, but it's much easier to sanitise corporate carsharing than it is do so for a free-floating carsharing offer. In any case, we find that companies really want to offer flexibility to their employees so we will probably see significant development in the post-COVID era.”
Remarkably, the ‘alternatives’ score well both in more and less mature markets. “In Belgium and France, the Government recently introduced mobility plan options could play a role. Brazil’s corporate fleets, for their part, are really into corporate carsharing, ridesharing and public transport options.”
And why are those beacons of innovation, the Nordics, showing such low scores compared to other countries? “In part, it’s because of local specifics. Fiscally, on the one hand for Denmark. But also, distances are greater, so the traditional corporate car option may be the only viable one. And of course, everybody already has their own bicycle, so a bike-sharing scheme won’t be very effective! (laughs) But who knows what the long term future holds…”
3. Operational leasing still has room to grow
Across all countries, 36% of large and 43% of very large companies use operational leasing as their preferred method of vehicle financing. The most mature markets are in Western Europe, with the highest penetration in Germany (47%), Spain, the Netherlands (both 42%) and France (39%).
“Those percentages increase further when we isolate the ‘very large’ companies: 61% in France, 57% in Germany, 51% in the Netherlands,” says Ms Bennathan. The definition of a ‘very large company’ varies per country: companies with at least 250, 500 or 1000 employees.
And yet, there’s still plenty of room for growth: “Yes, there is high usage. But there’s also high potential. Overall, the penetration of operational leasing is 27%. The percentage of companies having the intention to develop operational leasing in the next three years is 39%.” Two markets with an especially high potential: Brazil and Italy.
4. Telematics is huge (but not in Germany)
“In general, companies have come to grips with how to implement telematics and use the data it produces to their advantage. That’s why we’re seeing a huge increase in its use. Indeed, one of the two mains reasons is improving operational efficiency for 35% of companies,” says Ms Bennathan.
About 37% of all companies have implemented telematics, with no significant difference between car and LCV fleets. Size does matter, though: only 23% of the smallest companies use telematics, while 54% of the largest ones do.
“The most frequently cited reasons not to use telematics on cars: companies aren’t sure they’ll see a return on investment, they don’t know whether the data will be useful, or they find the whole concept too intrusive for the driver,” Ms Bennathan observes. “For LCVs, one of the three main reasons not to is often that there aren’t enough resources available to develop the data.”
So it’s about time and money, but also about intrusiveness. In Germany, famously protective of personal privacy, the average penetration of telematics is well below the overall average (23%). On the other end of the scale, the most enthusiastic users are Brazil (58%), Russia (54%) and Turkey (53%), followed by Italy (49%) and Belgium (48%).
As mentioned, the interviews took place prior to the peak of the COVID-19 outbreak. Even though the corona crisis has a short-term impact on mobility, it will for sure accelerate the mobility trends going forward, Ms Bennathan concedes: “The crisis is not finished yet. The impact on GDP is and will be important. In some cases, companies may need to do major cost savings. This should lead to a further acceleration of the trends highlighted by the Barometer.”
“Telematics is an ideal instrument for monitoring and optimising the efficiency of the fleet. Operational leasing always gets more popular in crisis times, because it frees cash flow. Alternative mobility solutions support the continuous need of individuals for flexibility while being cost-effective. And as for the energy transition: EV sales have only increased this year.”