Green drive: Business leads shift to cleaner, cheaper cars

Around a quarter of the world’s businesses are taking a serious look at green vehicles as a way of cutting costs, new research has revealed. The major survey of 3,000 executives, conducted by business advisers Grant Thornton and released last week, has found that Asian and G7 countries are leading the shift to greener cars, where respectively 31 per cent and 28 per cent of companies have examined the possibilities presented by alternatively-fuelled car fleets, powered by electricity, biofuels, or liquefied natural gas.

BusinessGreen reports that just under 70 per cent of the survey’s respondents named a high oil price as the main reason for exploring alternative fuel options, while 62 per cent cited general cost management and 55 per cent highlighted tax breaks as also informing their decision. And concern for the environment is also a driver, with 58 per cent listing saving the planet as their main motivation for change.

The survey also revealed that those companies that had not considered green fleet options named high upfront costs as the reason for this, followed by perceived difficulty with recharging or refuelling. Daniel Taylor, partner and head of automotive at Grant Thornton UK, said that to capitalise on the shift towards greener fleets, car makers needed to produce low-carbon vehicles that could compete on performance and price, while offering cost savings on running the car.

“Many dynamic businesses are… looking to determine whether switching their fleets to alternative fuels could offer cost savings, allowing them to free up resources which could be better employed in efforts to expand their operations,” he said. “And of course, switching to ‘greener’ fuels also boosts their environmental credentials.

“Given the high cost of alternative fuel vehicles at present, incentives will be a key driver of more widespread adoption. However, increased production of alternative fuel vehicles should lower costs, increase awareness, and spur businesses to consider them when opportunities arise to expand or replace their fleets.”

And while electric vehicles may not yet be cheaper to buy than conventional cars, another report released on Monday has confirmed that they are cheaper to run than gas-powered cars, as well as being better for the environment.

The report by US-based nonprofit science advocacy group the Union of Concerned Scientists has found that EV owners can save $US750 to $US1,200 a year based on 11,000 miles of driving, compared to drivers of a petrol-fuelled car that gets 27 miles per gallon at $US3.50 per gallon. And that for every 50 cent rise in the price of a gallon of gasoline, an EV driver can save an extra $200 annually.

UCS says the study is the first to analyse emissions from vehicles charged on a power grid of electricity made from fossil fuels like coal and natural gas. “Drivers should feel confident that owning an electric vehicle is a good choice for reducing global warming pollution, cutting fuel costs, and slashing oil consumption,’ said Don Anair, a senior engineer on the UCS clean vehicles program.

In a recent IEA-led review of the global electric vehicle movement, Japan, the US, China and Europe were found to be leading the way, with a wide variety of programs and incentives encouraging city drivers in particular to switch to EVs. GreenBang reported earlier this month that the survey found that just 16 cities in nine countries account for nearly one-third of all the EVs in use today. From numbers 1-10, these were: Japan’s Kanagawa Prefecture; Los Angeles; Shanghai; Portland, Oregon; Rotterdam; BrabantStad (a region encompassing five cities in the Netherlands); Amsterdam; Barcelona; Berlin; and Hamburg.

As Ecopreneurist points out, it is obvious from the make-up of this list that the recent policy changes in Europe relating to carbon emissions have really encouraged innovation, as well as new economic thinking. The Chinese government, meanwhile, unveiled policies to propel sales of all-electric vehicles to 500,000 by 2015 and five million by 2020.

Ecopreneurist also quotes a recent Economist article, which pointed to the development of novel EV business models, such as Better Place’s battery-swap concept; and lease arrangements, like that of China’s BYD which, in partnership with Hertz and GE, leases its electric cars to drivers in Shanghai, Shenzhen and Beijing.