Electric vehicles will play a large part in the future of motoring. But, as Johnson & Perrott’s Jonathan O’Brien tells Pádraig Hoare, there is still a lot of mileage left in diesel and petrol-powered vehicles
The future of motoring will most certainly be electric but talk of the demise of the diesel and petrol engines is premature — that is the consensus among much of those involved in the vehicle industry, including Johnson & Perrott fleet management boss, Jonathan O’Brien.
Mr O’Brien is managing director of Tallaght-based Johnson & Perrott Fleet since 2015, and has been working in the Irish vehicle leasing industry for over 16 years. He started off his career in AIB Finance and Leasing as a sales administrator and has progressed to hold positions as general manager and sales manager level in leading Irish leasing companies such as Windsor Fleet.
It is fair to say Mr O’Brien’s reading of what motor vehicles will be in the next decade and longer is at expert level.
He said: “Some 98% of the cars we supply on an annual basis are on contract hire, to mainly blue-chip customers and SMEs. Effectively, contract hire is a long-term rental with a residual value at the back end.
“We also provide a maintenance contract to run alongside the lease agreement. Typically that would run for 36 to 48 months. We offer a whole host of services — from fuel card management and supply to accident management. Fleet management is looking after all of the needs of a fleet for a particular client, anything that is vehicle-related — even down to insurance, road tax, repair, and the like.”
Mr O’Brien is adamant firms like his are 100% committed to the electrical revolution currently happening in the industry, but cautions that the revolution will not happen quickly.
Therefore diesel vehicles, as well as petrol, are still very much in the plans of fleet management firms.
“Electric is definitely going to be part of the future of mobility needs for companies and individuals. However, I don’t see it as imminent. While Johnson & Perrott is very much committed to electric vehicles being very much part of the future for transportation needs, there are things to consider such as battery range, incentives for company car owners and drivers doing the mileage that they do.
“Obviously, the infrastructure is slightly immature, in its infancy and therefore there are not as many charging points as one would require outside of the cities. What hinders our business is that if you look at the last 500 cars we have supplied to our clients, there would be an average of 138,000km over a 36-month term.
“With battery life being what it is for electric vehicles, that is not going to service the needs of certain clients who require geographical coverage in the West of Ireland or somewhere like that. It just doesn’t work,” he said.
Fleet management firms such as Johnson & Perrott are eagerly anticipating the advancement of battery life/range coming down the line from industry experts like Hyundai, Tesla and Volkswagen, he said.
“The Nissan Leaf has been around for some time but is mainly regarded as a city vehicle and probably wouldn’t service the needs of an individual who does 150,000km over three years.
“You can take it that if you bought an electric vehicle today that had a range of 400km on it, you can be guaranteed that in three years time, a newer battery will have a much better range on it. That probably harms the residual value of the vehicle and there is a reluctance there to go down that road.”
Diesel vehicles still very much have a place, as well as petrol.
“Diesel cars are going to be around the next number of years, there is no doubt about it. There is no evidence to suggest there is an electric vehicle that is going to come in at a price point — and that is a key thing — that is not prohibitive.
“We know diesel cars are going to last longer and burn less fuel. There is an incentive there. The engine isn’t stressed as much as petrol, so lasts longer. I think largely the environmental factors surrounding diesel have not been proven.
“We do have a short-to-medium-term plan in place because we do feel diesel is part of the future. What I’d like to avoid is any scaremongering that electric vehicles are the most imminent thing because they are actually not. We are utterly committed to the future of electric vehicles but there is no evidence currently available that suggests it is a viable alternative for us for the mileage that our clients do.” he said.
He has seen more of a move towards hybrids and petrols in the last 12 months than ever before.
“The reason for that is that the advancement in service intervals on petrol vehicles have helped small engines, with high enough output. Ford and Volkswagen both have a one-litre engine that produce 15 or 20 brake horsepower. It’s a phenomenal engine to drive. Those are the advancements that are attracting people back to petrol who are not doing the mileage.”
The move to hybrid may impact more in the medium-term.
“Volvo say by 2020, that every vehicle will have hybrid technology. That’s something that could become more prevalent on the road and that’s not a bad thing. I don’t think that will hinder residual values too much.”