Fleet Finance Associations

The nine biggest challenges for fleets in 2025

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In the latest ‘State of the Nation’ article by the Association of Fleet Professionals (AFP), Chair Paul Hollick outlines the pressing issues confronting vehicle operators in 2025.

As the industry faces unprecedented change, these nine challenges highlight the critical areas that require attention to ensure the sustainable and efficient management of fleets.

1. Maintaining momentum in the EV revolution

The electrification of company cars has been a remarkable success story in recent years, with electric vehicles (EVs) becoming the default choice for many. Despite this progress, key challenges remain. Lower-cost EV options and a broader range of models, such as electric pick-ups and off-road 4x4s, are essential for continued adoption. While the £20,000–£30,000 EV market is expected to expand in 2025, fleets catering to utilities and similar sectors are still struggling to find practical zero-emission alternatives.

2. Clarifying the future of the ZEV Mandate

The Zero Emission Vehicle (ZEV) Mandate, while ambitious, has created a disconnect between supply and demand—particularly in the van market, where adoption rates have stagnated. The government’s current consultation may result in much-needed revisions, such as reconsidering the role of hybrids and addressing regulatory bottlenecks. The AFP is actively contributing to these discussions, recognizing their potential to shape fleet strategies for the next decade.

3. Rethinking zero-emission solutions for vans

The adoption of electric vans is split: large corporate fleets are embracing them despite operational challenges, while smaller operators remain cautious. With the ZEV Mandate requiring over one-third of van sales to be zero-emission by 2027, urgent solutions are needed. Hydrogen-powered vans, like the upcoming Vauxhall model, offer promise with rapid refuelling and extended range, but require significant investment in infrastructure and affordability. A comprehensive rethink at the governmental level, including addressing the 4.25-tonne weight limit for electric vans, is essential.

4. Accelerating on-street charging infrastructure

Despite a record 20,000 public chargers installed in 2024, on-street charging in areas like terraced housing and apartments remains inadequate. This lack of accessible, affordable charging not only impacts fleet operators but also excludes many individuals from the EV market. The AFP is revamping its national mapping initiative to highlight areas of high demand, urging local governments and providers to expand on-street charging infrastructure rapidly.

5. Advancing shared charging solutions

The AFP’s shared charging initiative, launched in 2024, aims to facilitate the sharing of charging resources between fleets. An online platform under development will enable fleets to register spare capacity, set pricing (capped at 40p/kWh), and manage bookings. While this model isn’t a universal solution, it represents a practical step forward in addressing charging infrastructure gaps and supporting fleet electrification.

6. Tackling fleet budget challenges

Although inflation rates have eased, fleets continue to face escalating costs, from vehicle acquisition to insurance and maintenance. With limited options to mitigate these pressures, many fleet managers in 2025 are focusing on cost containment strategies. The AFP’s forums and resources play a crucial role in fostering collaboration and sharing solutions within the industry.

7. Building a robust used EV market

A healthy used EV market is vital for fleet electrification. Recent volatility in residual values (RVs) has stabilised somewhat, but levels remain lower than desirable. Key to improving buyer confidence is a standardised battery health check, which could provide reassurance about the long-term viability of second-hand EVs. Progress on this front is expected at both the UK and international levels in 2025.

8. Navigating new market entrants

The UK market has seen an influx of new manufacturers, especially from China, offering mid-size electric SUVs at competitive prices. While fleets are cautiously exploring these options, the sheer volume of entrants and potential security concerns make it challenging to differentiate reliable long-term players. Over time, a few manufacturers are expected to emerge as trusted partners, but fleets must tread carefully to avoid stranded assets.

9. Addressing the fleet skills gap

Fleets are grappling with a dual skills shortage: experienced fleet managers are nearing retirement, and the pool of trained replacements remains insufficient. The AFP’s Fleet Academy and efforts to introduce a fleet apprenticeship program are steps in the right direction, but further progress is essential. Additionally, a lack of skilled technicians for EV maintenance exacerbates vehicle downtime, posing daily operational challenges for fleets.

These nine challenges underscore the dynamic landscape fleets must navigate in 2025. As Paul Hollick emphasises, collaboration, innovation, and proactive policy changes are key to overcoming these hurdles and ensuring the sector’s continued evolution.