Paul Barker grabs a cuppa and a chat with one of fleet’s most influential figures – new Nissan GB Fleet Director, Peter McDonald
Having moved from heading Seat’s fleet department to the role of Nissan fleet director late last year, Peter McDonald has shifted focus to an electric-dominated outlook as he settles into the new job.
QHow important do you think this year is going to be for electric vehicles, with the BIK change and the general momentum. It feels like we’re at a tipping point with EVs, if we haven’t gone past it already?
There are so many positives to taking electric vehicles, the Benefit-in-Kind, for instance, makes it much cheaper. And the infrastructure is still relatively in its infancy but growing really quickly, so that’s changed a lot in the past couple of years. There’s lots more infrastructure and a big incentive to buy them from a tax perspective, and increasing supply in the market, so availability is better.
But we still think it’s quite a complex decision for fleets to get their head around exactly what they should follow. Should they be advocating EVs onto their fleet and if so to which drivers? There are lots of ingredients, and it is a really good time to buy an electric vehicle, but we also appreciate that, for most fleets, it’s going to be the first time they do it. So how do we support them in that process. And when I talk about us, it’s not just us, it’s the leasing companies, the dealers, the entire ecosystem. And how do you make it really simple?
LEADING THE WAY ON LEAD TIMES
Nissan fleet boss Peter McDonald is keen to dispel the myth that all electric vehicles have long lead times, pushing the fact that the brand’s Leaf model is available to deliver within weeks.
Talking about how he is looking to “manage and support” fleets through the transition to electric, McDonald said: “Two big things we’ve done are reduce the price of Leaf, and also increase availability. We know that some competitors have six, maybe even 12-18-month lead times, and that is stopping customers making the move.
“You can see brands that are being advertised, but you’re looking to the detail and it’s at least 12 months away before you can even think of getting one,” he continued. “I think that perception is clouding buyer behaviour. So while I may want an EV, I’m not willing to wait that long. It’s just another barrier; I buy into having an electric vehicle, I get the concept. I like what it does for my tax. I’ve got my head around how I’m going to charge it. But if the lead time is even further away, it leads people to maintaining their current policy. We would love to get the message out that we’ve got product available and it’s available now.”
QSo what can you do as a manufacturer to ease that transition?
We can do a lot, and we have been doing a lot on the basis that we’re one of the very few brands that has heritage in electric vehicles. So we do have electric vehicles available today, but we’ve been in the market for almost 10 years with Leaf, and with vans – the e-NV200 is one of the very few electric vans in the market today.
So, not only have we been selling them for that period of time but obviously our dealer network has been servicing them, managing them, our dealers have been selling them as used cars, they’ve been doing electric vehicle health checks on them, there’s lots of inherent capability, because we’ve been selling and managing them for so long. So we’ve got more experience, and I think that helps.
QFrom a supply point of view is it helpful to have the cars built in your UK plant in Sunderland?
It certainly helps to have them built here. The UK is the largest market for Nissan in Europe. And since Leaf is built in the UK, that means we are a little bit higher up the pecking order in terms of supply. We said there’s a big market opportunity and we want to help customers in that transition, so we’ve asked for more supply and we’ve also reduced the price. We still think price is, to a degree, a hurdle.
I know lots of fleets are allowing employees to pay a personal-use contribution, and changing from a lease-rate model to a whole-life-cost model. Because at the moment, electric vehicles are more expensive on list price. They typically also have a lower incentive for discount behind them because they cost that much more to build. So when they sit on a typical user chooser policy or fleet policy of some sort, typically they look expensive. We’re trying to work with leasing companies to do one of two different things. Rather than have a lease rate calculation, make it a pence-per-mile calculation, which then allows things like fuel and national insurance costs to be incorporated; those two things make the relative cost of an electric vehicle lower.
Or the other space at some are going into is allowing employees to have a personal-use contribution; it might be I’m getting a lease rate and here’s my grade of cars I can get within that lease rate and an electric vehicle isn’t in there. But if I can pay, out of my wages, maybe a hundred pounds a month more, I might move to a different grade and get access to electric vehicle, but in doing so my employer gets the National Insurance benefit, and I’m getting a Benefit-in-Kind benefit.
QAnd is that actually happening in the marketplace?
It is. The important thing is there are some fleets that are desperate to get electric vehicles, because they want to be carbon-neutral. I think others certainly want to make EV’s accessible to their employee base, so people can make a conscious decision about it. But the only way they can make a conscious decision is if an EV is on their grade policy and it’s accessible. We know, Tesla for instance, has been very successful at taking director grades on a policy, but then you find that apart from the director grade who else can access an EV and because of that dilemma of lease rates being higher.
QAt the same time, is the whole cost argument coming towards electric vehicles, because there’s been a steady rise in residual values?
It’s a crystal ball isn’t it, and there are so many different factors around supply, around government legislation. But there are a few things we know are going to happen. Infrastructure should, will, get better, so there will be more and more charging options available. We do know that some cities in the UK will be clean-air zones. But we don’t know what they’re going to adopt and what they’re going to charge for. And is it trucks, is it cars, is it no diesel, and these things can have different incentives around them. Banning diesels means people might switch to petrol as opposed to an electric vehicle, so it’s a little bit unknown. But what I think we can say is certainly EVs are going to be more dominant in future.
And it may not be right for everyone, but I think it’s really nuanced, so I don’t think you can just say for low mileage drivers, EVs work. Let’s say you drive 50 miles to work and 50 miles back home again. then actually, almost any of the EVs in the market can work for you.
The decisions of whether an EV is right for me or not are really nuanced, And that means anyone should consider it.
QWhat drew you to Nissan? Why was this a good step for you?
It was Nissan’s ambition in the market. The brand clearly wants to grow, and wants to make the UK a success and evidently by having manufacturing base here, it can and will make the UK a success.
QDo you think there is a big opportunity for growth with Nissan?
Nissan has all the core ingredients to grow further. It has huge levels of brand awareness, really high levels of consideration. So the general mass public are aware of the Nissan brand, then there is much larger scale of infrastructure in the facts that we build cars here, and we have 179 dealers.
Plus there is this desire to lead the market on electric vehicles and make them work. So you’ve got these ingredients of high awareness and consideration, big scale in the UK, wanting to be a leader in EVs and a good range of products.
QAnother big thing for you is the new Juke coming through now. How important is that for you, and what are your goals and areas of opportunity?
Juke is really core to marketplaces like public sector. We know that people have been migrating out of typical hatch product into SUVs, and that includes smaller SUVs, and we think that product really works for corporate fleets and public sector fleets.
Juke pioneered that segment, and effectively built a segment that then lots of other people emulated and came in too. We were really successful with the outgoing car, and have similar aspirations for the new one.
QHow important is it that the Government’s electric vehicle grant is maintained, and how influential is that in terms of driving EV sales?
At the moment, given the lease rates are higher, cost is a hurdle. The more there are incentives in place the easier it is for people to make that jump and transition into an electric vehicle.
The reallocation appeal of EV’s
You might be able to take a little bit more of a risk on EVs, as a fleet manager. If I had to reallocate a vehicle, an electric vehicle is probably an easy thing to reallocate. Would you like to try an EV and pay zero Benefit-in-Kind? I’d probably put my hand up for that. So if it wasn’t right for someone, that reallocation’s probably easy.