Alternative fuels: Now and next

Petrol: The rise of low-capacity turbos

What is it?

Once the fuel of choice across the board, petrol has lost ground to diesel in recent years as drivers have defected to the black pump in search of greater efficiency. It’s got plenty of life left in it yet, though, especially with the threat of significantly more expensive diesel engines looming in 2014 with the arrival of Euro6 emissions regulations.

Why is it interesting?

New small-capacity petrol engines, often with turbo and/or superchargers to boost power, are the thing of the moment – they’re clean, punchy and work particularly well in smaller cars.

Who’s leading it and with which vehicles?

Fiat‘s Twinair two-cylinder units fit in with this philosophy and they’re currently found in the 500 city car and are soon to be seen in the next generation Panda. The VW?Group is prominent, as is Ford with its Ecoboost engines, which have made their way into models including the Focus, Mondeo and S-max.

Tax incentives

Engines like the Ecoboost units offer the equivalent power of larger engines (e.g. a 1.6 Ecoboost is as potent as a conventional 2.0-litre), with lower emissions and running costs, so they’re closing in on diesels and hybrids for power and efficiency. They have a 3% lower BIK rating than diesels of the same CO2 output, too.

Plus

. Lower P11D price

. 3% lower BIK charge than diesel

. Growing and improving the choice of petrol engines

Minus

. Buyers need re-educating to the capabilities of new, smaller turbo petrol engines

. Less well-suited to larger cars

. Generally not as economical as diesels

“Company car drivers can get more power at less cost with engines such as Ford’s turbocharged Ecoboost petrol. The 1.6-litre Ecoboost produces 160PS of power with 240Nm of torque, meaning it does not run out of puff like a normally aspirated petrol engine. The result is a car that is more fun to drive, quieter and with reduced noise, vibration and harshness levels.

“Responsiveness and a broad spread of power at low revs with reduced size and weight mean more exhilarating driving with improved fuel economy and emissions. There are financial benefits for both fleet operators and company car drivers; according to KwikCarcost, acquisition, depreciation, service, maintenance and repair are lower than for a 2.0-litre diesel.

“Company car drivers avoid the 3% diesel car taxation penalty on the 1.6 Mondeo and pay monthly benefit-in-kind figures of £55 for a 20% tax payer (versus £74 for a 2.0-litre diesel) and £111 for a 40% tax payer (compared with £148).”

Russ McGill is fleet development director at Ford of Britain

Diesel: Fleet favourite with plenty still to give

What is it?

Formerly very much the alternative fuel and now very much the default fleet option, diesel engines have come a long way from their clattery, industrial beginnings to become some of the most refined and powerful options on the market.

Why is it interesting?

Huge advances in refinement have secured their reputation as not only the more economical choice of engine, but in many cases the smoother, more powerful and more desirable option.

Who’s leading it and with which vehicles?

Every major player in the UK car industry now has a comprehensive range of such engines in its stable, be that their own or borrowed from an affiliated firm. However, BMW has consistently been at the forefront of diesel development, largely due to its Efficient Dynamics sub-brand, which has produced some of the cleanest and most refined engines on the market.

Tax incentives

Generally, but not always, a clean diesel will cost less to run in every respect than an equivalent petrol, but higher NOx and particulate emissions mean they’re subject to a 3% benefit-in-kind increase over a petrol with the same CO2 rating.

Plus

. Cleaner, smoother and more efficient than ever

. Mainstream, so has strong residual values

. Often more desirable than a petrol

Minus

. Higher P11D prices than equivalent petrols

. Additional 3% BIK charge

. Urban air quality issues blot diesel’s future

“Advances in diesel technology have meant that greater performance can be gained from smaller-capacity engines, while ensuring emissions are reduced.

“This has led to a reduction in ownership costs and is in turn better for the environment. The higher mpg delivered by diesel-powered vehicles means that despite fuel prices having risen by 25% (in real terms) since 2005, diesel-powered vehicles now offer more than 26% more miles per gallon, making ownership more affordable.

“From a business perspective, lower taxes on fuel-efficient cars lighten a business’s tax burden, from more favourable write-down allowances to lower BIK bills. Diesel-powered vehicles typically emit less CO2 than their petrol counterparts, which puts them into lower BIK bands and offers a higher write-down allowance, making them a natural draw for fleets. While diesel-powered vehicles might cost slightly more than their petrol equivalents, they also return higher residual values while lowering their whole-life costs.”

Stephen Chater is corporate operations manager at BMW UK

Hybrid: Strong green image and available now

What is it?

Once dubbed the future of alternative fuel and now seen more as a halfway house, hybrids combine a conventional internal combustion engine with an electric motor, which reduces fuel consumption and emissions and is able to power the car independently up to limited speeds.

Why is it interesting?

It isn’t new technology – mass-market versions have existed since 1997 when the first-generation Toyota Prius arrived, but an arguably overrated squeaky-clean image and running costs on par with the most economical petrol and diesel equivalents has given them a strong foothold in the marketplace. For those who do most of their mileage in urban areas, hybrids make a lot of sense, as they make the best of their electric-only power in town.

Who’s leading it and with which vehicles?

Toyota and sister company Lexus have been and remain champions of the hybrid movement. Lexus is heading toward becoming a hybrid-only firm specialising in large, prestige models such as the GS saloon and the RX 4×4, while Toyota occupies the more affordable end of the spectrum with the Prius and the Auris HSD (short for Hybrid Synergy Drive). Honda has also worked hard on the technology, while diesel hybrids are also starting to appear, courtesy of Peugeot and Citroen.

Tax incentives

The incentive lies in having lower running costs with the equivalent power of a larger engine. Hybrids are also available now, so there’s no waiting around for any future tech to break through, and the emissions rival or beat those of diesels without the 3% BIK penalty.

Plus

. Lower emissions and consumption

. Green image

. Electric-only power at low to medium speeds

Minus

. No significant financial incentives

. Not as economical as diesels at high speeds

. Not ideal for high-mileage drivers

“The big benefit is that hybrid is here now and on sale. Unlike diesel engines, hybrids aren’t penalised by Government because of their particulate emissions – all Toyota’s hybrids are 10% BIK or less – and there are environmental issues with diesel’s NOx emissions, which do not have a positive impact on air quality.

“There are no issues with range anxiety as there are with an EV and there is no problem with the infrastructure as there is with hydrogen. When compared with diesel cars, hybrid servicing and maintenance costs are extremely competitive.

“The Auris Hybrid and the Prius are both exempt from the London Congestion Charge, and company car drivers minimise their personal tax liability with BIK of just 10%, while both qualify for 100% capital write-down allowance.

“Hybrids offer the best balance of range and ability next to conventional petrols, diesels and EVs. There’s also the practicality element next to EVs, which are generally smaller. The Prius is an upper medium model and a decent rep’s car, and it has the comfort and space a business user needs, so it’s the most applicable technology to go mainstream for fleets. We see plug-in hybrids as the next logical step, but the extra cost doesn’t yet make them useful for everybody, especially long-distance drivers.”

Andrew Jago is product manager fleet and LCV at Toyota GB

Range-extender hybrid: The logical next step for fleets

What is it?

Also known as plug-in hybrids, range-extenders utilise similar technology to standard hybrid cars, but they can be plugged in and charged up in the same vein as a fully electric model. This allows them to run on electric power alone for much longer than a conventional hybrid. The presence of an internal combustion engine means you don’t have to worry about running out of power with no access to a socket or charging point, either.

Why is it interesting?

In essence, they’re a compromise between a normal hybrid and a fully electric car, in that on a full charge they can be run solely on electricity for the first 35-50 miles or so. Then there’s always the reassurance of a petrol engine and a tank of fuel, which effectively vanquishes the so-called range anxiety issues that come with electric vehicle ownership.

Who’s leading it and with which vehicles?

Vauxhall‘s Ampera and Chevrolet‘s all-but-identical Volt will be the first and foremost range extenders to hit the market in March 2012, with Toyota’s Prius Plug-In hot on their heels. BMW has also revealed its i3 range-extender city car, which is expected to reach full production in 2013.

Tax incentives

The existence of an internal combustion engine means that there are still tailpipe emissions, but they’re low enough to keep cars like the Ampera within the new 5% benefit-in-kind bracket – the Vauxhall, Toyota and Chevrolet emit less than 50g/km. Plug-in hybrids are also eligible for the Government’s £5000 electric car bursary.

Plus

. Compromise between electric and internal combustion power

. Overcomes range anxiety

. Run on electric power alone for long periods

Minus

. Prices per car are still higher than petrol or diesel rivals

. Needs regular recharging for maximum benefits

. Taxation incentives not on par with a fully electric car

“Electric propulsion provides vast amounts of power and torque from the word go. But, despite considerable advances in battery technology, pure EV cars continue to be compromised by their small range. Vauxhall’s solution is to provide the electric Ampera with its own compact and purpose-built ‘power station’, or range-extender. Before its lithium-ion batteries can be depleted, the onboard generator springs into action. It feeds the powerful electric drive unit with all the current it needs to keep on driving and driving – for up to 360 miles.

“The batteries can be recharged quickly and easily from a home domestic socket. If this is carried out during off-peak periods – overnight, for instance – the total recharging cost can be less than £1. With fully charged batteries the Ampera produces zero tailpipe CO2 for up to 50 miles (depending on how it’s driven). For most drivers that kind of distance is enough to take care of the daily commute.

“The latest figures show that the Ampera will emit just 27g/km (combined) CO2, and when it’s driven on the battery there is zero CO2 being emitted from the tailpipe. For fleets especially, this allows the Ampera to qualify for many incentives such as the £5000 plug-in car grant, first-year capital allowances, 50% BIK taxation discount (5% rather than 10%), £0 VED and exemption from the London Congestion Charge.”

Ian Allen is manager environmental strategy & Ampera at Vauxhall

Electric: Viable alternative for low-mileage drivers

What is it?

Battery packs and motors are no longer the preserve of milk floats and G-wiz owners. Electric cars have now reached the mainstream and the ones on the market are no less user-friendly than conventional automatic models. The formula is simple enough – energy is stored up in a battery pack, which then drives a motor.

Why is it interesting?

The allure lies in a total lack of tailpipe emissions, hugely diminished running costs and ultimate refinement because of their near-silent operation. The planned expansion of public charging points in urban areas is yet another incentive, especially for drivers who cover short distances in town.

Who’s leading it and with which vehicles?

Plenty of brands have jumped on the bandwagon, and there are more than a few others with mooted versions in the pipeline. In the UK, Nissan and Renault have made the most pioneering efforts with the former’s Leaf and the latter’s electric Twizy, Zoe, Kangoo van and the Fluence. Ford and VW are among those soon to join the party.

Tax incentives

The benefits to fleets are theoretically enormous due to the near absence of fuel bills, eligibility for the Government’s £5000 electric car bursary and the fact drivers are exempt from BIK. The downside is their limited range, lack of available plug-in points, and expense next to conventional internal combustion engine vehicles. It’s also a given that electricity costs will go up, whether the vehicles are charged from drivers’ homes or a workplace, but the subsequent cost is far outweighed by pricier petrol and diesel bills.

Plus

. Zero tailpipe emissions

. Huge fuel savings

. £5000 Government incentive

Minus

. Expensive purchase price and/or battery leasing programmes

. Severely limited range, especially on major roads

. Current charging infrastructure is inadequate for most

“A range of 100 miles is significantly less than that of a diesel-engined vehicle and it is clear that EVs will not suit every usage profile.

“However, data proves their relevance: 32% of superminis will never make journeys longer than 93 miles (150km) and 90% of car journeys in London are less than 10 miles.

“Delivery vans and commuters are obvious targets, and early field trials show that as drivers quickly overcome their ‘range anxiety’ they become accustomed to specificities of an EV, and start enjoying the inimitable driving experience. The financial benefits for fleet customers are obvious with SMR costs typically 20% less than the equivalent diesel model, 100% first-year capital allowances, zero BIK and London Congestion Charge exemptions making the EV an attractive proposition.

“With many of the major car manufacturers either already offering electric vehicles in the UK or planning to launch such products in the next couple of years, significant growth is forecast in the electric vehicle sector, with Renault among the most bullish, predicting that it will take about 10% of the market by 2020. For corporate customers with a strong CSR or low-carbon agenda, careful consideration should be given to how EVs can be introduced into at least part of their fleet.”

Andy Heiron is head of Electric Vehicle Programme at Renault UK

Hydrogen: The most realistic long-term fuel of the future?

What is it?

Tipped as the most viable long-term alternative to internal combustion, hydrogen-fuelled cars are powered by a stack of cells that run on hydrogen, which itself is stored in a large tank. They’re a way off from mass production yet, mainly due to the lack of a suitable infrastructure and a huge cost per vehicle at present, but a good bet in the long run – around 15 years from now.

Why is it interesting?

Were a suitable number of filling stations in place, you’d be able to run, drive and refuel a hydrogen car in almost exactly the same fashion as you would a petrol or diesel. The range is usually far superior to an all-electric vehicle and there are no harmful emissions whatsoever, giving them the edge over electric cars, which create emissions during the charging process.

Who’s leading it and with which vehicles?

Honda has been the main advocate so far, having built the FCX and FCX Clarity, but it’s the only manufacturer to make anything close to being production ready. Plenty of other firms have dabbled with concept hydrogen-powered models including Mazda, and even Lotus has produced a fuel cell taxi, a small fleet of which is mooted to be operational for the start of next year’s Olympics.

Tax incentives

Mass-production hydrogen vehicles are too far ahead to know how a government could treat them under tax legislation, but it’s a safe bet that they’ll be looked at in a similar positive manner to electric vehicles today, as and when they become available. If emissions-based taxation is still in place, they may not be subject to any charges at all.

Plus

. Most realistic long-term alternative fuel

. No harmful emissions

. Conventional operation

Minus

. Huge cost per car

. Lack of suitable fuelling infrastructure

. Around 15 years away

“Hydrogen fuel cell vehicles are the ultimate solution to zero-emission mobility in the long term. As well as emitting no harmful exhaust gases, fuel cell electric vehicles offer good driving range (270 miles, FCX Clarity), short refuelling time (four minutes, FCX Clarity) and a flexible layout and design. They offer the best, clean equivalent of what most of us drive today.

“Put simply, a fuel cell vehicle has a hydrogen tank instead of a petrol tank, and in the fuel cell stack, hydrogen is combined with atmospheric oxygen to generate electricity. The fuel cell stack is really a tiny electric power station, and generates its own electricity onboard rather than through the likes of a plug-in system. The beauty of this is that the car can create the electricity on demand, which is a huge advantage over a battery electric vehicle, which has to store electricity in a battery. As electricity is a relatively difficult thing to store, especially in large amounts, this poses its own challenges in terms of weight and range.

“We don’t believe that any one technology will ultimately win and become the single clean motoring technology. It’s likely that in future, hydrogen fuel cell cars will run alongside battery electric vehicles and other technologies, too. But we’re confident that fuel cell cars are the most viable option.”

Kate Saxton is government affairs and environment manager at Honda UK