LeasePlan releases conclusions of the 3rd edition of the "Propulsion 2022" study
Since the last edition of the “Propulsion” study, launched at the end of 2019, we have witnessed a health crisis that still today poses many challenges in various sectors, the automotive sector being no exception. The semiconductor and raw materials crisis reflects an unprecedented mismatch between supply and demand, and one that many analysts anticipate will continue for a few months yet.
Electric mobility in acceleration phase
This atypical period we are living through has also brought new mobility trends that point to a preference for car transport. Increasingly, with the gradual return to normality, we are witnessing a recovery of corporate fleets, which is no longer being felt due to the current shortage of supply.
This year, with this study, a total cost of use (TCU) comparison exercise was carried out between the different propulsions, based on a company with a medium-sized fleet (between 50 and 200 vehicles). This exercise is of particular importance due to the growing offer of plug-in hybrid vehicles, 100% electric vehicles and the competitiveness of more and more models compared to internal combustion engine versions. In this study, in comparison with 2019, a new segment - SUV - was introduced, which translates a new market preference. Thus, this study considers 9 segments (Utility, SUV, Small Family, Small Family SUV, Small Family Premium, Medium Family, Medium Family Premium, Large Family Premium and Commercial Vehicles) analysing the mileage of each of these segments. It should also be noted that for all these segments, the 5 propulsions available were taken into consideration: Diesel, Petrol, Hybrid, Plug-in Hybrid and 100% electric.
The "Mobility 2022" study aims to identify transition opportunities for the different vehicle segments and usage profiles that make up a vehicle fleet. The recommendations for the different segments, from larger fleets to private customers, aim to combine the transition to electric mobility with an effective reduction of total cost of use (TCU) with car mobility.
Main conclusions by segment
In the Utility segment, the 100% electric option is counted as an alternative to combustion vehicles, however, there is not yet an offer of hybrid models. As regards TCU, it can be observed that the 100% electric model continues to be the most competitive for the reference mileage (48 months | 30,000km/year), with a 4% difference compared to the Hybrid and Gasoline models; however, the propulsions are not very significant, with a maximum of 7% when compared to the Diesel model.
In the segment where we have all the available motorizations, including a Plug-in Hybrid version - SUV - the 100% electric vehicle is the option with the lowest usage cost, for the reference usage profile, with a material difference of 8% compared to the Petrol and Diesel models. The Plug-in Hybrid model is less competitive in this segment, with significant differences of around 18%.
In the Small Family Car segment, the 100% electric vehicle stands out over all the other engines, with the Diesel vehicle coming closest, albeit with a difference of 24% (in 2019 the distance of the electric vehicle to the 2nd place was around 2%). This gain can be explained by the 10% improvement in the electric TCU and the equal loss of competitiveness of the Diesel. It should also be noted that the Small Family segment already has van versions in the Plug-in Hybrid model. While in the 100% electric vehicles there is still no version available in this type of body, which may be an obstacle to the transition.
In the Small Family SUV segment, for the first time, the 100% electric model the one with the best TCU for the benchmark mileage. Since the 2019 review, this propulsion has gained a great deal of competitiveness, demonstrating a significant reduction of €180 per month, or 26% in usage costs. However, the Diesel model (which has been the TCU champion in recent years) was only 2% behind, followed by the Plug-in Hybrid vehicle which was 13% more expensive than the EV. Further apart are the Hybrid and Petrol versions, with differences of over 20%.
For the Premium Small Family Car segment, the Diesel version has the lowest TCU. However, the 100% Electric and Plug in Hybrid models are very close, with a maximum difference of 2%. Then we have a Petrol version at 12% and finally the Hybrid which has a cost of use 21% higher than the Diesel. As has been seen, the hybrid versions have not shown competitiveness - much on account of the tax changes that have increased the acquisition value of this motorisation.
In the Medium Family Car segment, compared to 2019, there is an inversion in the first two positions, with the Plug-in Hybrid model taking 1st position, by exchange with the electric version which is left with a TCU of 2% away; however, it is clear that in this segment the electric vehicles maintain a dominant position; the other motorizations are slightly further apart, with the Diesel version with a difference of 11% and Petrol at 15%.
In the Premium Family Medium Car segment, the electrified versions are those with the lowest running costs: as in the generalist Family Medium segment, the Plug-in Hybrid vehicle outperforms the 100% Electric one, which has a 10% more expensive TCU. The other motorizations no longer make sense for corporate fleets, as they present differences of 36% to 48% compared to the plug-in hybrid vehicle.
In the Large Family Car segment, the Plug-in Hybrid vehicle is the most competitive, followed by the 100% Electric and the Diesel Hybrid models, which translate into a 23% and 24% increase in monthly TCU, respectively. The Diesel and Petrol options represent an increased cost of 36% and 86%, the latter being the least advantageous option in the analysis.
In the Small Van segment, the Diesel option is undoubtedly the most competitive, with a difference of 37% compared to the electric vehicle, a difference justified by the fact that both engines have the same tax framework, and the acquisition cost of the electric vehicle is much higher than its Diesel counterpart. The petrol vehicle also does not represent an economically viable option as it has a TCU of over 18% compared to the Diesel.
Thus, taking into account the reference mileage, electrified propulsions (100% electric vehicle and plug-in hybrid vehicle) prove to be the most competitive in 7 out of the 9 segments under analysis; they are only outperformed in the Premium Small Family and Van segments.
Therefore, LeasePlan's recommendations are to analyse the competitiveness of the motorizations, whenever there is a renewal of any of the segments, in order to combine the opportunity of cost reduction with an effective reduction of the fleets' environmental footprint.
This study, which still places plug-in hybrids as the first bet in Portugal, reveals, however, a growing competitiveness of the total costs of 100% electric vehicles.
There is a relevant aspect that is the fact that the conclusions of the study differ when analysing large companies compared to small and medium-sized companies, where the transition to electrification is more favourable since, for these companies, there is no great elasticity in the brands' discounts and the competitiveness of electric vehicles is therefore more relevant. On the other hand, charging infrastructures, along with incentives, which are one of the main active barriers for the transition, are needed more than ever and will be a determining factor in accelerating this transition.
One of the ways in which we survey the market is the LeasePlan Mobility Monitor, an annual survey that collects consumer and business opinions on the most pressing issues facing the mobility sector and which included Portugal, with Portuguese drivers proving to be among the most positive about electric cars, with 62% reporting that they are very positive about switching to EVs and 49% confirming that they intend to switch to an electric car when purchasing their next vehicle.
There is an increasing appetite in the Portuguese market for the transition to EV, where both companies recognise in electric mobility an opportunity to reduce their energy/fuel costs, as well as individuals who put in first place the environmental concern (59%) and in second the low usage costs (57%).
The sector and the fight against climate change
Over time, and given the governmental pressure to contain CO2 emissions, much has to change, especially given the climate urgency recognised in the Roadmap for Carbon Neutrality. LeasePlan also has its "carbon neutrality roadmap", the difference is that the target is 2030, when it aims to achieve zero emissions in its total fleet. Key elements of LeasePLan's strategy include raising customer awareness about what's next in low-emission vehicles, facilitating the adoption of low-emission vehicles with attractive customer propositions developed by the LeasePlan Electric Vehicle Experience Center. LeasePlan is also a founding member of EV100, a new global business initiative designed to accelerate the uptake of electric vehicles and their infrastructure, launched by The Climate Group at the UN General Assembly in September.
The transport sector is responsible for 25% of greenhouse gas emissions in Portugal. In turn, the road transport subsector represents about 96% of transport emissions. Taking into account that fleets have been assuming an increasing share of automobiles in our country, in light of the objectives set by the Government in the Roadmap for Carbon Neutrality 2050, LeasePlan assumes as its strategic goal the anticipation of carbon neutrality of its clients' fleets to 2030, thus being 20 years ahead of the national goal.
Considering the goals of the Paris Agreement and the Roadmap for Carbon Neutrality 2050, the truth is that, even considering that these present overly ambitious objectives, if we look at the stock of vehicles circulating by motorization, we are obliged to accelerate the transition to more sustainable motorizations at our disposal. Indeed, in 2021, 90% of passenger vehicles on European roads will still be combustion-powered; this figure drops to 70% in 2025 and to a still relevant 50% in 2030. After 2030, we will have 20 years to get the remaining 50% of combustion vehicles off the road.
