The light commercial vehicle (LCV) market in 2024 has given the UK fleet sector much to cheer about, with 351,834 new registrations marking a 3.0% growth. This achievement makes it the most successful year for LCV fleet renewal since 2021, according to the Society of Motor Manufacturers and Traders (SMMT). However, despite this growth, the challenges facing battery electric vans (BEVs) and the push toward net-zero targets remain a pressing concern.

A Breakdown of LCV Market Trends in 2024

The LCV market saw robust demand across most weight classes, underscoring its resilience and critical role in the UK economy. Large vans led the charge, accounting for 66.3% of the market with a 2.1% increase in registrations. Medium and small vans also posted impressive growth, with registrations up by 12.3% and a staggering 44.5%, respectively.

However, not all segments thrived. New 4×4 registrations dropped by 9.7%, and pick-up trucks saw an 8.3% decline to 37,582 units. Industry leaders attribute much of this drop to changes in the taxation of double-cab pick-ups, which are now taxed as cars for benefit-in-kind (BiK) and capital allowance purposes. These changes, introduced in April, have significantly impacted businesses reliant on pick-ups.

Mike Hawes, Chief Executive of the SMMT, cautioned that this policy shift could delay fleet investments, leading to older, more polluting vehicles staying on the roads longer. “This not only hampers progress towards decarbonisation but could also reduce tax revenues,” he noted.

The BEV Challenge: Growth, but Not Enough

While BEVs did manage a modest increase in registrations (up 3.3% to 22,155 units), their market share plateaued at 6.3%. This is significantly below the UK government’s Zero Emission Vehicle (ZEV) mandate target of 10%, posing a significant challenge as the 2025 mandate deadline approaches.

Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), voiced her concerns: “BEVs accounted for just 6.3% of the market, far below the ZEV mandate target. This is troubling as fines for non-compliant vans will double to £18,000 in 2025, alongside a 16% target increase.”

The roadblocks for BEV adoption are clear. Unlike many car owners, van drivers often lack access to home charging. The on-street infrastructure, crucial for this sector, remains inadequate, leaving fleet operators in a difficult position. “Greater attention must be given to supporting van operators with reliable and accessible charging solutions,” Robinson added.

Charging Infrastructure and Regulatory Realities

The transition to zero-emission LCVs hinges on robust charging infrastructure and pragmatic regulations. Mike Hawes pointed out that “Vans, 4x4s, and pick-ups keep businesses moving, making this sector a barometer of the UK economy. Buyer confidence will inevitably be undermined when charging infrastructure does not meet fleet needs.”

The disparities in charging accessibility for vans remain a critical hurdle. Many operators need on-site charging at depots or strategically located rapid chargers to keep fleets operational. Without these, the uptake of BEVs is unlikely to meet ambitious targets.

Encouraging Signs: Lightweight Vans Surge

Amidst these challenges, there was a bright spot in the market for lightweight vans (up to 2.0 tonnes), saw a remarkable 44.5% growth. These vehicles are often used as service vans, reflecting growing confidence in certain sectors of the economy. As businesses expand and adapt to evolving demands, lightweight LCVs are proving to be a popular choice.

Looking Ahead: Addressing Key Challenges

For the UK to achieve its net-zero ambitions, targeted action is necessary. Key measures include:

• Increased investment in charging infrastructure: Expanding and modernising charging networks to meet the needs of commercial fleets.
• Regulatory flexibility: Ensuring ZEV mandates align with market realities to avoid penalising businesses struggling with the transition.
• Incentives for zero-emission vehicles: Providing financial support to encourage businesses to invest in greener technologies.

The SMMT’s and NFDA’s calls for a review of EV regulations and additional support for BEV adoption highlight the urgent need for a collaborative approach. Only with coordinated efforts can the LCV sector continue to grow while contributing to the UK’s net-zero goals.

The Future of the LCV Sector

The 2024 LCV market’s growth underscores its resilience and importance to the UK economy. However, challenges surrounding BEV adoption, charging infrastructure, and regulatory hurdles threaten to stall progress toward decarbonisation. Addressing these issues promptly is not just a matter of meeting government targets – it is vital for the sustainability of businesses and the environment.