Holman dives deep into the Fleet Outlook Report 2023 to explain what it means for fleets, operators, and transport businesses.

 

What can we learn from the Fleet Outlook Report 2023?

The Fleet Outlook Report 2023 is a bi-annual snapshot of the business, providing insights into fleet operator confidence, financing options, and growth plans. Over 400 fleet operators are asked a range of questions about fleet makeup, funding, and strategy twice a year. Their answers are a vital sense check of industry health and focus areas for the future.

So, what can we learn from this year’s Fleet Outlook Report 2023, and what does it mean for operators?

 

Growing confidence

After a tough few years, the fleet sector is growing in confidence, with 46% of businesses expected to invest in additional vehicles in the next year. While all fleet operators are forecasting growth, it’s primarily driven by those with large (25+) fleets. This could result in increasing competition for vehicles and longer wait times.

The size and type of vehicles is changing, researchers have found.Over one-third (37%) of operators will likely change their van payload profile to adapt to changing circumstances – including the shift to electric vehicles (EVs).

 

Environmental challenges

One of the leading drivers for change is the shift to EVs. Across those polled, 64% operate at least one electric vehicle, with plans to expand this in the future. Researchers found that over 80% of fleet operators expect half of their vehicles to be electrified by 2030.

Overall, 22% of fleets say van orders will be electric in the next year.

Progress is rapid, with 26% of van fleets predicting to reach the EV “tipping point” (where EVs outnumber fossil-fuel-powered vehicles) by 2025. Operators are leading the change in the 100-plus van fleet category.

Environmental concerns and access to EVs influence supplier selection, with 40% of fleet leaders saying they would consider switching suppliers based on their ability to support the transition to electric commercial vehicles.

The shift to EVs is highlighting some critical challenges for businesses. The top three barriers to EV adoption for fleets are charging concerns (19%), implementation (18%), and paying and reporting fuel (15%).

While the will to change is there, operators are facing headwinds. The energy crisis has put the brakes on transition or slowed progress for many fleets. Over half (65%) said the fluctuating energy price has impacted growth but has not stopped the shift to EVs.

The learning point is that fleets are growing, and investment is being made in EVs – even with an uncertain economic environment and changing energy prices.

 

Funding flexibility

Outright purchase remains the primary way fleet operators purchase vehicles, but things are changing. Finance lease is predicted to be the purchase method of choice in the next 12 months for 29% of operators (compared to 31% purchasing vehicles outright).

Evidence shows that operators are increasingly seeking greater flexibility in financing. Almost half (42%) expect to increase the use of flexible rental agreements, and 33% plan to shift to short-term rental and leasing. This could illustrate a strategic response to economic uncertainty.

Most purchases are made through leasing companies, brokers, and OEMs – but there’s significant growth in agency purchasing. However, there is still low awareness of the model. Just one-third of fleets are fully aware of the Agency Sales Model, with 60% having limited knowledge or understanding of how it works. This would impact the fleet funding choices, meaning they’re not getting the best deals available.

 

Invest in fleet flexibility

The Fleet Outlook Report 2023 paints a positive picture of a sector that’s growing but one which faces several challenges. Operators must manage current demand and invest in growth while implementing the transition to sustainably powered vehicles.

There’s a shift from traditional outright purchases to flexible finance solutions agencies provide to achieve this. New financing models provide operators with the fleet vehicles required today and for the future. To manage in an uncertain environment, operators should work with partners who understand their priorities and can support their strategic aims. The choice is Holman.

 

Find out more about our flexible funding options.

Read more about the Fleet Outlook Report 2023.