Budget announcement confirms Government’s commitment to accelerating electrification of van fleets

Specialist refrigerated vehicle converter Celsius has welcomed chancellor Rachel Reeves’ commitment to electric vans by extending incentives for fleet operators to purchase electric vans. 

In her recent autumn statement, the Chancellor extended the Plug-in Electric Van Grant (PiVG) for a further 12 months and announced more funding for local authorities to install additional charging points. 

The PiVG currently provides up to £2,500 discounts on small vans (under 2500kg) and up to £5,000 on larger vans (2500kg to 4250kg) but was due to end on March 31, 2025. Reeves extended the cut-off point for another 12 months to March 2026 – giving fleet operators more time and financial support to prepare for the transition to electric vans. 

Sales of electric vans in the UK have stalled in the last 12 months as transport and logistics fleet operators wrestle with the operational challenges of switching to electric vans – which can cost more than their diesel equivalents and have significantly lower ranges. 

However, prices of electric vans have fallen significantly over the last six months, with a new generation of more affordable vehicles poised to arrive on the UK market. 

Celsius has been at the forefront of electric fridge van development since 2018, when the Lancashire-based converter produced its first working prototype electric fridge van. 

Since then, Celsius has worked with the University of Warwick and Europe’s leading refrigeration specialists to develop super-efficient chiller units and lighter, more sustainable insulation solutions which deliver significant efficiency gains with diesel vans and are especially well suited for electric van conversions. 

The construction sector has rapidly accelerated its adoption of electric vehicles over the last 18 months and the chilled distribution sector is expected to follow suit because of the prevalence of food deliveries into city centres, where local authorities are expected to introduce more restrictions on diesel vehicles in the medium term. 

Celsius Conversions manager Sam Hargreaves said: “It’s encouraging to see greater clarity on the direction of travel from the Government. Whilst many fleet professionals have justified reservations about the cost and suitability of electric vans for some high-mileage roles, within the urban setting, electric vehicles are almost certainly the future-proof solution for city centre deliveries. 

“Adoption of electric vans has so far lagged the company car market, but with the first full cycle of EVs now being replaced, it’s clear that even essential user fleets are working out how to embrace electrification to lock in the cost and emissions advantages. 

“We feel that Rachel Reeves’ Budget announcement brings a tipping point closer and we would advise refrigerated transport fleets who are considering making the transition in the next 12-18 months to contact us to talk through the options.” 

Celsius’ new insulation system scooped the Refrigerated Panel Van of the Year Award at the Temperature Controlled Storage and Distribution Show in recognition of its ground-breaking new vehicle insulation system.  

Celsius’ newly patented lining system has been completely redesigned from the ground up to eliminate the use of fibreglass, instead utilising a 100 per cent recycled plastic material that is also fully recyclable at the end of its life.   

The company is currently evaluating the next generation of electric vans and developing new electric fridge van prototypes based on these more affordable models from both the established manufacturers and relative newcomers such as BYD and SAIC.