Search
Toby Poston comments: Recent coverage around the Government’s Net Zero targets has put the future trajectory of the UK’s electric vehicle transition firmly back in the spotlight. The speculation has been widely reported, including by BBC News, and appears to point towards a potential consultation on changes to the Zero Emission Vehicle mandate.
This is not an abstract policy debate. It is about the real-world conditions required to maintain investment, support demand and keep the transition moving. It’s footprint and influence are immense.
The BVRLA has long supported the move to cleaner, greener road transport. Our members have been, and remain, central to delivering it. They have registered around 1.3 million of the 2 million battery electric cars now on UK roads and have already remarketed an estimated 550,000 of them into the used market. Leasing has been the primary channel through which the UK has electrified.
That leadership comes with significant exposure. BVRLA members currently hold 750,000 electric vehicles on their balance sheets, representing more than £36 billion of investment. This is one of the largest and most sustained investments in decarbonising the UK economy.
The operating environment is tough. The residual value collapse on used electric vehicles is costing the UK leasing and rental sector an estimated £1.3 billion every year. Used EV prices have fallen by more than 50% from their January 2023 peak. Since 2022, UK BEV prices have declined four times more than petrol or diesel cars and are now £3,375 worse off, on average. That decline is 66% worse than Germany and 100% worse than Italy. No major European used BEV market has fallen harder or faster than the UK.
Demand is also uneven. Around 50% of all new car leasing additions are electric, but less than 8% of van transactions are for eVans. In rental, close to 10% of car demand is for BEVs, while less than 2% of van demand is for electric commercial vehicles.
That gap between ambition and market reality is where policy has to work harder. The proposed eVED regime is a clear example. By 2028, it would cost the rental and leasing sector £260 million a year in compliance alone. That is an operational cost of around 44 pence for every £1 of tax collected. It also risks creating an electric vehicle postcode penalty, where a rural driver in Caithness could pay three times the annual road tax of a driver in central London.
The facts speak for themselves. Government needs to deliver a policy environment that matches this investment, acknowledges this risk and encourages more motorists and businesses to make the transition.
The BVRLA is already on it. We have completed extensive research with members and are ready to respond quickly and comprehensively to any consultation. Our programme of engagement with industry stakeholders and politicians is active and ongoing.
The road ahead will not be without challenge. Get this right, and the sector can continue doing what it has already done at scale: invest in cleaner vehicles, support a functioning used market and help businesses and drivers make the switch with confidence.
