Don’t rule out diesel – but look at the alternatives

Don’t rule out diesel – but look at the alternatives

Posted by

Martin Brown

August 2017

There are many difficult decisions facing managers of company car fleets. And one of the key issues is this: what is the right fuel choice for my fleet?

Diesel has been (past tense) the fuel of choice for company cars for a variety of reasons: it’s fuel efficient, and therefore cost effective; it’s also advantageous on benefit in kind taxation.

But (and here comes the big BUT.)

Diesel has been up against the ropes, recently, taking a series of seriously damaging head blows. The fuel has been fingered as the cause of health damage, notably respiratory disease its cause further undermined by the VW ‘dieselgate’ scandal.

Then there has followed the Toxicity Charge for diesel cars entering the capital city London, which will be introduced this October. And the government’s new Clean Air Strategy document last month, which stopped short of a diesel scrappage plan, spelt out that diesels were the pollution culprits as the UK headed towards the banning of petrol and diesel cars by 2040 – less than 23 years away.

We’ve thrown the odd punch too, in all honesty, not least because we support the general move to greener technology.

But it’s important not to become too unthinking in the prevailing emotional anti-diesel mindscape.

For fleets a balanced view is required.

And it’s this: diesel still has an important place in any fleet. But it’s critical to evaluate all cars to see where diesel is still relevant – or where a petrol or alternative fuel vehicle might fit in.

We’ve been running some interesting figures on a basket of cars, and particularly over lower 10,000 mile per year running cycles, where petrol vehicles make an extremely strong argument. In most cases. But not all the time. I’ve selected a couple to illustrate the point

Before I looked at the figures, I was convinced a diesel Focus would seriously beat a petrol version on running costs. Err…no. Take a look, it’s surprisingly close, while the electric version is off the running cost pace:

On the other hand, a Volvo XC90, when you compare it across three different drivetrains – petrol, diesel, and plug-in hybrid – it’s the diesel that is comprehensively better on whole life costs. See table below:

If we then look at mileages over a 60,000 operating cycle, where the greater fuel efficiency of diesel has a part to play, what are the changes? As you might expect, the Ford Focus diesel stretches ahead on running costs that gives it a clear margin over the petrol and electric models.

 

Turning to the Volvo, which if you recall had diesel ahead at 30,000 miles, the situation doesn’t change at 60,000, only that the PHEV model is now better on overall costs than the petrol.

So what do we learn from this?

I believe it’s this: vehicle selection has to be more carefully evaluated than ever before. The improving fuel economy of petrol models, and their cheaper list price, really do help to make them more financially viable to run than a diesel.

But not always. Diesel still has an important role to play; but its importance will diminish over time. What that timeframe will be is difficult to ascertain. But for now, don’t discount diesel when it’s the most appropriate choice for your fleet.


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