29 May 18

Diesel isn't dead - but electric isn't bad either

Is green fleet management an emission impossible? That's the topic Giorgio Elefante, Advisory Partner and Automotive Industry Leader for Italy, PwC, took on at this year's Global Fleet Conference in Rome.

Cars are changing, said Mr Elefante. From a car-centric view, powertrains are evolving, connectivity is growing and autonomous driving is approaching.

Globally, alternative powertrains in new assembled cars will go from 5% last year to 15% in 2024. The average engine displacements will become smaller and more vehicles will be fitted with automatic transmissions. The market share of SUVs will continue growing, too whereas diesel hasn't reached its lowest point yet.

Cars are also getting increasingly autonomous. By 2027 or 2028, a fully autonomous vehicle (level 5) is feasible but this will require infrastructure and legal changes.

At the same time, much is changing from a customer-centric view. Their mobility behaviour is evolving, particularly the distances driven and the expected comfort. Vehicle segments, safety and well-being and technological attitude are also changing, as are the entertainment needs and the expectations around home integration.

OEM panel discussion

Mr Elefante's presentation was followed by a panel discussion giving car manufacturers' insight in the powertrain evolution. Mike Antich, Editor of Automotive Fleet, moderated the discussion between Steve Higgs, Manager Global & North America Regional Fleet Development at General Motors, Dennis Rachow, Global Sales Manager at Jaguar Land Rover Fleet and Business, Eric Feunteun, EV Programme and New Business Director at Groupe Renault and Olivier Ferry, Director Corporate Sales & Remarketing at Hyundai Motor Europe.

Steve Higgs reminded the audience that China is a communist state, which means that  the government can make sure its decisions are made a reality. This is what we're seeing now with electrification in China: more electric cars are being manufactured and sold because of government policy.

More expensive

GM's Steve Higgs underlined that cars have to be more expensive than they used to be, in the same way phones have got much more expensive. Phones used to cost around 100 dollar or so whereas an iPhone today costs around 800 dollars. If we expect cars to have all the technology that is available today, they have to be more expensive and we cannot expect the government to cover the difference.

All participants agreed that battery life turns out to last much longer than first anticipated. There is much less drop-off than expected and this has a beneficial effect on residual values.

Battery disposal shouldn't be an issue, said Mr Feunteun. He said it's the OEM's responsibility and they already have processes in place to dispose of end-of-life batteries. At any rate, car batteries can get a second life in home electricity storage solutions.

Hydrogen & diesel

The OEMs were also in agreement that hydrogen is probably not the technology of the future. Charging infrastructure is a problem, whereas electricity for electric vehicles is available everywhere. The panel members had higher hopes for electric vehicles altough Renault's Eric Feunteun underlined that diesel is not dead.

As a final piece of advice, Steve Higgs called on fleet manager to test drive an electric car before deciding on including or excluding them in a fleet policy.

Image: (left to right) moderator Mike Antich (Editor, Automotive Fleet), Steve Higgs (Manager Global and North American Fleet Development, GM), Dennis Rachow (Global Sales Manager, Jaguar Land Rover), Eric Feunteun (EV Programme and New Business, Groupe Renault), Olivier Ferry (Director Corporate Sales & Remarketing Europe, Hyundai Motor Europe)

Authored by: Benjamin Uyttebroeck