This op-ed was written by Gareth Jones, Managing Director at Radius
Clean Air Zones (CAZ) and Ultra Low Emission Zones (ULEZ) are having a big impact on how businesses operate in the UK. With rising costs and ULEZ expanding in London, companies with vehicle fleets are facing tough challenges. These new rules will affect fleet operations right away, so fleet managers need to make smart choices for sustainable transport.
ULEZ and CAZ – the basics
Before we talk about the problems and solutions, let’s understand what ULEZ and CAZ are. The government wants to make the air cleaner in certain city areas by discouraging highly-polluting vehicles. To follow these rules, vehicles need to meet tough emissions standards or pay daily fees when they drive in these areas.
Companies, big or small, that rely on vehicle fleets for their daily work are facing a mix of problems. Inflation is very high, and the costs of getting and using vehicles are going up fast. On top of that, the government is changing the rules for CAZ and ULEZ, which adds another layer on and urgency to the landscape of sustainable transport.
The changes coming because of CAZ and ULEZ in the UK could significantly disrupt how businesses with vehicle fleets work. A majority of companies, more than 50%, within CAZ and ULEZ zones have access to off-road parking, which not only supports cost-effective on-site charging but also alleviates worries about limited driving range. Also, for businesses in these areas whose vehicles mainly travel short distances each day, most electric vans can work well and solve their problems.
Options to consider
Fleet managers, faced with the challenges of ULEZ and CAZ, have several options to consider. The first involves maintaining the status quo by keeping mixed-age vehicle profiles and adjusting routes to minimise congestion zone charges. However, this approach comes with its limitations, as older vehicles may have higher operational costs while covering longer distances outside congestion zones.
Alternatively, businesses can explore the option of upgrading to newer internal combustion engine (ICE) vehicles. While this may appear attractive due to the current demand for low-mileage ICE vehicles, it can be relatively expensive. Moreover, worries about possible future rules affecting all older ICE vehicles make us wonder if this choice will last. Fleet managers really need to carefully think about these other options, especially with the ULEZ and CAZ rules always changing.
Electric Vehicles (EVs)
Switching to electric vehicles (EVs) is a smart move for businesses. First, it means you don’t have to pay daily congestion fees, which saves money when driving in Clean Air Zones (CAZ) and Ultra Low Emission Zones (ULEZ). Also, using EVs lowers how much it costs to run your vehicles, especially if you charge them on-site. Plus, it’s good for the environment and matches up with corporate responsibility goals.
While it is crucial to acknowledge the challenges, such as higher initial acquisition costs, concerns about evolving technology and declining residual values, these hurdles should not deter businesses. Leasing vehicles is another alternative to the high price of buying an EV, and a way to avoid concerns around depreciation of the value of the vehicle. Delivering a reduced environmental impact, long-term cost savings and the option to lease rather than purchase, make transitioning to EVs a pragmatic choice for fleet operators navigating the CAZ and ULEZ landscape.
Amidst the growing influence of Clean Air Zones (CAZ) and Ultra Low Emission Zones (ULEZ), and the rising costs of not complying, transitioning to electric vehicles (EVs) is a smart strategic choice for businesses with vehicle fleets. The impact of ULEZ and CAZ on such businesses is substantial, and the decision between sticking to the old ways or embracing EVs will shape their future operations.
Given the changing regulations and economic pressures, UK businesses must consider the shift to EVs strategically. This move ensures compliance, cost savings, and aligns with sustainability. By skilfully overcoming ULEZ and CAZ challenges, businesses can secure a resilient, eco-friendly, and financially wise future.