Fleet Costs Will Continue to Escalate
Fleet costs have been increasing across the board due to several market factors. Some of which include:
– Higher acquisition costs
o Fixed costs are increasing as acquisition costs escalate. Fleets are losing negations power with manufacturers.
– Lower incentives
o Demand is exceeding supply, manufacturer need for incentives have diminished.
– Higher fuel prices
o Crude oil prices due to inflation, overall global demand, and the invasion of Ukraine continues to financially hit consumers and fleet operators alike.
– Higher maintenance costs
o Fleets are having to hang onto vehicles longer increasing maintenance and repair costs. Coupled with supply chain issues, parts shortages, and labor increases fleets are increasing overall price increases .
o Supply chain and geopolitical turmoil continues upward pressure on inflation.
– Transition to EVs
o Under current market conditions, EV TCOs are favoring the I.C.E. counterparts.