The varied trajectories seen in electric vehicle adoption continue to go in opposite directions, creating concerns about the long-term success of the drive to decarbonise. That is according to the latest Leasing Outlook report from the BVRLA, which shows a growing divide between company-provided cars and private motorists when it comes to EV demand.
Across all fuel types, business contract hire (BCH) is up 7.5% year on year, while personal contract hire (PCH) has dropped by 11.3%. Largely sitting between the traditional company-provided car and a private registration, Salary Sacrifice is up 63% year on year, with the overwhelming majority of those registrations involving electric cars.
The successes of BCH and Salary Sacrifice have seen the BVRLA’s leasing fleet grow for the fifth consecutive quarter. The positivity of the 3.6% growth in the last 12 months is being offset by the divergence between corporate and personal demand. As the leasing fleet becomes more heavily weighted towards electric vehicles, demand for EVs in the used market needs to keep pace to avoid residual values spiralling.
Toby Poston, BVRLA Director of Corporate Affairs, said: “The current trajectory of the transition to EVs is increasingly one of the haves and the have-nots. Phase-out targets and sales mandates are beginning to force the industry’s hand but will not succeed in isolation. Where incentives have been present, registrations have followed. The sectors currently benefitting from such support cannot bear the weight of the full transition alone. As the divergence between corporate and new and used private demand grows, the financial risk associated with bearing that risk becomes unsustainable.”
One way in which the leasing sector is adapting to a volatile market for second-hand electric vehicles is through used car leasing. Demand there is up 7.7% in the last quarter alone as more drivers are drawn to accessing a used EV via lease, where they are not personally taking the risk on the residual value.
The BVRLA’s Leasing Outlook report is produced quarterly, with the latest version containing data to end of Q1 2024. The statistics and analysis are bolstered by commentary from Fleet Assist (SMR trends and impact of AI), Cap HPI (Impact of ZEV mandate) and Auto Trader (Trends in new and used demand). The full report can be read on the BVRLA website.
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